Grayscale Blames SEC for Delaying Digital Fund ETF Listing

Grayscale’s lawyers have called out the U.S. Securities and Exchange Commission (SEC) for delaying the approval of a digital asset ETF

Grayscale Challenges SEC Delaying ETF Listing

Grayscale has publicly blamed the SEC for delaying the approval of its Digital fund. The complaint reflects growing frustration in the crypto world over slow decisions and unclear rules from the SEC.

In a letter, Grayscale’s attorneys said that the SEC’s Division of Trading and Markets had already approved the ETF proposal, but the SEC’s Office of the Secretary stepped in and paused the process by launching a review.

Grayscale argues that this action violates the SEC’s own rules, which require a clear approval or disapproval within a set timeframe. According to the letter, missing that timeframe means the proposal should be automatically approved under Section 19(b)(2)(D). 

The delay, they added, is causing harm to Grayscale, the exchange, and current investors by holding back the fund’s launch.

The company also emphasized that turning its crypto trusts into ETFs is a step forward for the industry, helping digital assets reach more traditional investors. Grayscale says the SEC’s delay is not only unfair, but also blocks progress in making crypto more accessible.

SEC Plans Easier ETF Approvals

The SEC, along with stock exchanges and fund managers, is working on a plan to make it easier to approve certain crypto ETFs. 

According to  Eleanor Terrett, a crypto journalist, the new process would speed things up by automating parts of the current application system and could allow some ETF issuers to skip the usual 19b-4 filings.

SEC Chair Paul Atkins said the agency wants to support innovation by making rules clearer and moving away from strict enforcement. He told CNBC that his goal is to create a transparent system that allows people to build and launch new products.

If the process is simplified, it could lead to a wave of new crypto investment options, like altcoin ETFs, tokenized funds, and tokenized stocks. This could also bring more money into the crypto market and push prices higher.