Grayscale Urges SEC to Keep Current Crypto ETF Rules
Grayscale told the SEC on Aug. 31 to preserve existing crypto ETF rules, arguing new limits would raise investor costs and opposing changes to Rule 6c-11 and ETF terminology.
Grayscale urged the U.S. Securities and Exchange Commission on Aug. 31 to keep current rules that govern crypto exchange-traded funds and filed its comment on the final day of the SEC’s public comment period for a review of novel ETF rules.
The submission responded to an SEC review opened June 30 that posed 27 questions about how to treat several novel asset types, including crypto. Grayscale urged the agency to build on current practices and provide clearer guidance for issuers rather than impose new portfolio limits or asset-class bans, warning that restrictions would raise fees paid by shareholders.
The firm opposed a proposal to limit the use of the term “ETF” to funds registered under the Investment Company Act of 1940. Grayscale said its spot crypto offerings, including a pending Zcash product, are structured as commodity trusts and have operated that way since 2013. Grayscale Chief Legal Officer Craig Salm wrote in the comment letter, “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.”
Grayscale also objected to reopening Rule 6c-11, the 2019 rule that allows ETFs to begin trading without case-by-case SEC approval. The company argued that adding new restrictions to the rule would increase compliance costs and slow product launches.
As an example, Grayscale cited SEC staff action on a NYSE Arca listing rule for its five-asset crypto fund. Staff cleared the listing rule on June 30, 2025, but the Commission later stayed the decision; the fund did not begin trading on the exchange until Sept. 19, a gap of 81 days. To address such delays, Grayscale proposed a confidential pre-filing process with a 45-day staff response window.
The SEC review comes as ETF assets have grown: Chairman Paul Atkins noted ETF assets have roughly tripled since 2019. Some fund sponsors have paused new launches while the agency considers whether novel ETFs should follow a separate regulatory framework.
The public comment window closed Aug. 31. The SEC must now decide whether to revise guidance or preserve the existing framework that has governed ETFs and exchange-traded commodity trusts. The Investment Company Act of 1940 is in its 86th year; the agency’s decision will affect crypto funds still awaiting approval.
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