Grayscale Challenges SEC’s Authority in GDLC ETF Conversion Suspension

On July 11, Bloomberg analyst James Seyffart reported that Grayscale and its legal team formally challenged the U.S. Securities and Exchange Commission’s (SEC) decision to impose a “stay” on the conversion of the Digital Large Cap Fund (GDLC) into an exchange-traded fund (ETF). The letter contends that the SEC lacks the jurisdiction to enforce such a suspension. Previously, the SEC had halted Grayscale’s initiative to transition the GDLC into an ETF, placing the proposal under intensified regulatory scrutiny. This development underscores the ongoing regulatory complexities surrounding cryptocurrency-based ETFs and highlights the legal pushback from asset managers seeking to expand crypto investment vehicles within traditional financial markets.