The Securities and Exchange Commission is officially reviewing an application for converting Grayscale Investments’ Digital Large Cap Fund (GDLC) into an exchange traded fund (ETF) after the former filed the application in the Federal Register.
The official start of the SEC’s evaluation of a filing filed by NYSE Arca seeking to list and trade GDLC shares through an ETF, NYSE Arca announced on Nov. 4, added Grayscale. NYSE Arca filed Form 19b4 – proposing a rule change to expand the SEC’s definition of exchange-traded products to include digital assets beyond Bitcoin and Ethereum.
If bona fide, this adjustment would be necessary to enable national securities exchanges to trade on multi-asset funds such as GDLC which holds 5 tokens (Bitcoin, Ethereum, Solana, XRP and Avalanche).
SEC’s 240-Day Review Could Approve Grayscale’s Multi-Token ETF
That would take the SEC’s mandated review process of up to 240 days. From a private placement in February 2018 to public trading on the over the counter (OTC) markets in November 2019, GDLC’s journey began.
Last month, the fund became a reporting entity with the SEC, increasing its levels of transparency and regulatory oversight. At that time, in November 1st, 2024, GDLC had over $530 million of assets under management.
If successful the Grayscale fund would become the first multi token ETF to be used at a U.S. national securities exchange, potentially opening up new doors for investors seeking an exposure to digital assets.
As one of the industry’s most notable crypto asset managers, Grayscale has long played in a sweet spot of helping blur the lines between traditional finance and the so-called markets for digital assets.
For digital asset ETFs in the U.S., the SEC’s decision will be watched closely given this is a major moment for regulatory involvement with investments in digital asset ETFs. This would be a major step towards broader acceptance and accessibility of digital assets in financial markets.
