Grayscale Battles SEC Over Future of Crypto ETFs: “Don’t Break What Works”
Grayscale advised the US Securities and Exchange Commission (SEC) to go away crypto exchange-traded fund (ETF) guidelines alone. New limits would value buyers cash and purchase them nothing.
The asset supervisor filed on Aug. 31, the final day of the remark window. The SEC is weighing whether or not these funds want their very own rulebook.
Grayscale Draws a Line on Crypto ETF Rules
The SEC opened the evaluation on June 30 with 27 questions. Crypto is one of seven asset varieties within the body.
Chairman Paul Atkins pointed to scale. ETF property have tripled since 2019. Some sponsors have already parked new launches whereas the evaluation runs.
One query cuts closest to Grayscale. Should the phrase “ETF” belong solely to funds registered underneath the Investment Company Act of 1940?
Grayscale stated no. Its spot crypto merchandise, together with the pending Zcash ETF, are commodity trusts as a substitute. It has run them that method since 2013.
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Chief Legal Officer Craig Salm went additional.
“The time period ETF precisely describes the financial actuality of exchange-traded commodity trusts, and limiting its use to registered funding corporations would create investor confusion moderately than resolve it,” read an excerpt within the remark letter.
The 81-Day Delay Behind the Argument
Grayscale additionally opposed rewriting Rule 6c-11. That 2019 rule lets ETFs launch with out case-by-case approval.
Adding portfolio limits or asset-class bans would push up charges, the agency stated. Shareholders pay that invoice.
Its sharpest proof is its personal document. SEC employees cleared a NYSE Arca itemizing rule for Grayscale’s five-asset crypto fund on June 30, 2025. The Commission then stayed the choice.
The fund didn’t commerce on the trade till Sept. 19, a wait of 81 days. Grayscale now desires a confidential pre-filing course of with a 45-day employees reply window.
The window has closed. Crypto ETF demand has cooled because the launch growth.
The 1940 regulation on the heart of this combat turns 86 this 12 months. What the SEC does with it units the tempo for each crypto fund nonetheless in line.
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