XRP News Today: Grayscale Appeals SEC Halt on Multi-Crypto ETF Trading

Grayscale Investments, a prominent cryptocurrency asset manager, has formally appealed the decision by the US Securities and Exchange Commission (SEC) to halt the trading of its exchange-traded fund (ETF) that includes XRP, Solana, Bitcoin, Ethereum, and Cardano. The company has expressed that this delay is detrimental to its investors and has urged the regulator to expedite the process of opening the fund for public trading.

In a letter addressed to the SEC, Grayscale emphasized that the delay in the commencement of public trading for the fund is causing harm to both the exchange and the existing investors. The company has also hinted at the possibility of taking legal action if necessary to compel the SEC to allow the fund to commence trading.

The SEC initially approved the Grayscale Digital Large Cap Fund (GDLC) ETF on July 1, but subsequently halted trading the same week. The regulator cited the need for further scrutiny of the product as the reason for the delay. Grayscale, however, argued that this move contravenes the timeframes established by Congress, stating that the Commission's internal regulatory rules cannot be used to circumvent a law established by Congress.

The GDLC fund, which would trade on NYSE Arca under the ticker symbol “GDLC,” holds a diverse portfolio of cryptocurrencies. According to SEC filings, 80% of the GDLC fund is comprised of Bitcoin, with Ethereum making up 11% of the holdings. Solana and XRP follow, with 2.8% and 4.8% respectively, while Cardano makes up 0.8% of the fund. The inclusion of these additional cryptocurrencies is seen as a strategic move by Grayscale to offer investors broader exposure to the digital asset market.

Grayscale's legal team has contended that the SEC's stay order on the GDLC ETF conversion is unlawful. They assert that the SEC does not have the authority to impose such a suspension and that the delay is causing harm to investors who are eager to gain access to the fund. The firm has emphasized the strategic importance of the GDLC ETF, highlighting its potential to provide investors with a more diversified and comprehensive investment vehicle in the cryptocurrency space.

The letter sent by Grayscale to the SEC underscores the ongoing tension between the regulatory body and the cryptocurrency industry. The SEC has been cautious in its approach to approving cryptocurrency-related financial products, often citing concerns over market volatility and investor protection. Grayscale, on the other hand, has been proactive in pushing for the approval of its multi-crypto fund, arguing that it offers a valuable investment opportunity for those seeking exposure to the digital asset market.

The outcome of this legal challenge could have significant implications for the cryptocurrency industry. If the SEC's stay order is lifted, it could pave the way for other multi-crypto funds to gain approval, providing investors with more options for diversifying their portfolios. Conversely, if the SEC maintains its position, it could signal a continued cautious approach to cryptocurrency-related financial products, potentially limiting investment opportunities in the space.