Grayscale told the US Securities and Exchange Commission (SEC) to leave crypto exchange-traded fund (ETF) rules alone. New limits would cost investors money and buy them nothing.
The asset manager filed on Aug. 31, the last day of the comment window. The SEC is weighing whether these funds need their own rulebook.
Grayscale Draws a Line on Crypto ETF Rules
The SEC opened the review on June 30 with 27 questions. Crypto is one of seven asset types in the frame.
Chairman Paul Atkins pointed to scale. ETF assets have tripled since 2019. Some sponsors have already parked new launches while the review runs.
One question cuts closest to Grayscale. Should the word “ETF” belong only to funds registered under the Investment Company Act of 1940?
Grayscale said no. Its spot crypto products, including the pending Zcash ETF, are commodity trusts instead. It has run them that way since 2013.
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Chief Legal Officer Craig Salm went further.
“The term ETF accurately describes the economic reality of exchange-traded commodity trusts, and restricting its use to registered investment companies would create investor confusion rather than resolve it,” read an excerpt in the comment letter.
The 81-Day Delay Behind the Argument
Grayscale also opposed rewriting Rule 6c-11. That 2019 rule lets ETFs launch without case-by-case approval.
Adding portfolio limits or asset-class bans would push up fees, the firm said. Shareholders pay that bill.
Its sharpest evidence is its own record. SEC staff cleared a NYSE Arca listing rule for Grayscale’s five-asset crypto fund on June 30, 2025. The Commission then stayed the decision.
The fund did not trade on the exchange until Sept. 19, a wait of 81 days. Grayscale now wants a confidential pre-filing process with a 45-day staff reply window.
The window has closed. Crypto ETF demand has cooled since the launch boom.
The 1940 law at the center of this fight turns 86 this year. What the SEC does with it sets the pace for every crypto fund still in line.