In a sudden turn of events, the US Securities and Exchange Commission has put Grayscale's plans to convert its Digital Large Cap Fund into an exchange-traded fund on hold, pending a review by the agency's top officials. This development comes just a day after the SEC's staff had given the green light for the conversion. The fund in question, which holds over $755 million in assets including bitcoin, Ethereum, XRP, Solana, and Cardano, was set to be uplisted on the New York Stock Exchange. However, the SEC's commissioners have now intervened, citing the need for a review under Rule 431 of the Commission's Rules of Practice.
As a result, the July 1 order approving the conversion has been stayed until further notice. The SEC has not disclosed which commissioner or commissioners requested the review, but it has stated that it will notify the NYSE of any relevant actions taken. The fund's sponsor, Grayscale, has expressed its commitment to pursuing the listing of the fund as an exchange-traded product and is working closely with stakeholders to meet all necessary requirements.
The SEC's decision has been met with surprise, but Grayscale remains optimistic about the outcome of the review.