XRP News Today: SEC Halts Grayscale ETF Approval Amid Regulatory Scrutiny

The United States Securities and Exchange Commission (SEC) has put a hold on the approval of the Grayscale Digital Large Cap (GDLC) cryptocurrency exchange-traded fund (ETF), which was previously approved by staff delegation on July 1, 2025. This decision has indefinitely suspended the order’s execution, causing uncertainty over plans to list the fund, which bundles five major cryptocurrencies (BTC, ETH, SOL, XRP, ADA) into a single basket. A Grayscale spokesperson described the delay as unexpected but assured that the company remains committed to its goals. Market observers view this delay as part of the SEC’s efforts to establish regulatory standards for similar cryptocurrency-based applications.

The initial approval was issued by lower-level staff under “delegated authority” from the Commission; however, the file has now been escalated to an open vote by all five commissioners. This procedural change aims to centralize ultimate responsibility for cryptocurrency-based securities within the SEC’s upper management. Analysts highlight that delegation decisions are open to disputes, causing the administrative process to slow down until permanent guidelines are developed.

Bloomberg analyst James Seyffart notes that launching multi-asset ETFs could be premature, especially given the absence of independent ETF approvals for XRP and ADA. According to Seyffart, the GDLC may eventually obtain a listing, provided the Commission does not identify any structural issues, although the timeline remains uncertain.

The suspension of the GDLC ETF approval has tempered expectations for multi-asset cryptocurrency ETFs but has also increased the likelihood of regulatory clarity for the sector. The inclusion of controversial assets alongside Bitcoin and Ethereum highlights the SEC’s deeper risk assessment strategies. Experts anticipate the new listing criteria to be publicly outlined soon.

Grayscale continues to update its documents and engage in stakeholder consultations to move forward. According to Eric Balchunas, the delay is not permanent, and the GDLC will reemerge as an agenda item once SEC guidelines are released.

The SEC’s decision to halt Grayscale’s ETF conversion comes at a time when the Bitcoin ecosystem has been experiencing significant growth, driven largely by the adoption of Bitcoin as a treasury asset by corporations. This trend, which began with MicroStrategy in 2020, has gained momentum in recent years, particularly after a major update to the accounting standards for Bitcoin by the Financial Accounting Standards Board (FASB) in 2023. The update has made it more feasible for companies to hold Bitcoin on their balance sheets, leading to a surge in corporate interest.

The rise of corporate Bitcoin treasury strategies has been fueled by several factors. Firstly, there is a significant amount of managed capital with strict mandates that can only invest in specific types of assets, such as stocks or bonds. Bitcoin treasury companies provide these funds with a way to gain exposure to Bitcoin without violating their investment mandates. Secondly, corporations have access to better types of leverage than hedge funds and other capital pools. They can issue corporate bonds with multi-year durations, which allows them to hold Bitcoin through periods of volatility without the risk of margin calls. This makes corporate Bitcoin holdings a more stable and long-term investment compared to leveraged ETFs, which reset their leverage daily and are more susceptible to volatility.

The SEC’s decision to halt Grayscale’s ETF conversion has raised questions about the regulatory environment for Bitcoin and other cryptocurrencies. While the SEC has not provided a specific reason for the stay order, it is clear that the regulatory body is taking a cautious approach to the approval of new cryptocurrency-related financial products. This decision comes at a time when the Bitcoin ecosystem is evolving rapidly, with new use cases and investment opportunities emerging constantly.

The impact of the SEC’s decision on the broader Bitcoin ecosystem remains to be seen. On one hand, the halt could be seen as a setback for the industry, as it delays the launch of a potentially significant new investment vehicle. On the other hand, it could also be seen as a sign that the SEC is taking a more careful and considered approach to the regulation of cryptocurrencies, which could ultimately benefit the industry in the long run. The SEC’s decision to put Grayscale’s ETF on hold is a reminder that the regulatory environment for cryptocurrencies is still evolving, and that investors and industry participants must remain vigilant and adaptable in the face of changing regulatory landscapes.