XRP News Today: Grayscale Challenges SEC Delay on Crypto Fund Launch

Grayscale, a leading asset management firm, has strongly opposed the US Securities and Exchange Commission's (SEC) decision to pause the launch of its large-cap fund, which includes prominent cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), Ripple’s XRP, Solana (SOL), and Cardano (ADA). The company contends that this unexpected delay is causing significant harm to its investors.

In response to the SEC's action, Grayscale has submitted a formal letter challenging the regulator's decision to delay the transformation of the Grayscale Digital Large Cap Fund (GDLC) into a spot ETF. The GDLC is primarily composed of Bitcoin, which constitutes 80% of its underlying assets. Ethereum makes up 11%, while Solana, XRP, and Cardano represent 2.8%, 4.8%, and 0.8% of the fund, respectively.

Grayscale's legal team, in the letter, underscored the necessity for the SEC to adhere to the rules set by Congress, which establish deadlines for the approval of investment vehicles like the GDLC. The SEC had initially approved the conversion on July 1, but the following day, the regulator issued a stay order to review the approval due to an ongoing internal review. Grayscale argues that the fund's approval should be considered automatically valid since the SEC missed its legal deadline to act on the proposal.

The asset manager is now contemplating filing a petition to compel the regulator to allow the fund to commence trading without further delay. "Grayscale and the Exchange are therefore considering whether to file a petition requesting the Commission to lift the stay imposed by Rule 431(e) while the Commission reviews the action taken by delegated authority, so that the Fund may promptly launch while that review proceeds," the letter stated.

This move is part of Grayscale's broader strategy to introduce more crypto products to mainstream financial markets. The successful launch of its spot BTC ETF earlier in 2024 has set the stage for this initiative. Meanwhile, other asset managers have submitted numerous applications to the SEC for ETF proposals tracking various cryptocurrencies, including meme coins and other altcoins, reflecting a more favorable regulatory environment in the United States.