On the final day for comments, August 31, Grayscale submitted its official position to the U.S. Securities and Exchange Commission (SEC), urging the regulator to abandon changes to existing rules for cryptocurrency exchange-traded funds (ETFs). The company warns that new restrictions would only increase costs for investors without offering any real benefits in return.
The SEC initiated a review of the regulatory framework on June 30, putting 27 questions up for discussion, among which cryptocurrency was included as one of seven asset classes requiring special attention. The agency's chairman, Paul Atkins, highlighted the scale of the issue: assets under management in ETFs have tripled since 2019, forcing a number of management companies to freeze the launch of new products until the situation becomes clearer.
The core of the dispute: what counts as an ETF?
The key question directly affecting Grayscale's interests is whether the definition of "ETF" should be limited exclusively to funds registered under the Investment Company Act of 1940. Grayscale categorically opposes such an approach. Their crypto products, including the upcoming Zcash ETF, are structured as commodity trusts rather than classic investment funds. The company has used this model since 2013, and its Chief Legal Officer, Craig Salm, expressed it with absolute clarity:
"The term ETF accurately reflects the economic essence of exchange-traded commodity trusts. If it is reserved only for investment companies, it will merely confuse investors."
81 days of waiting: the Grayscale precedent
The company also opposed revising Rule 6c-11, adopted in 2019, which allows ETFs to launch without individual approval for each application. Grayscale cites its own experience: the SEC approved the listing of its multi-asset crypto fund on NYSE Arca on June 30, 2025, but then suspended its own decision. The fund only hit the exchange on September 19 — after 81 days of waiting.
Grayscale proposes introducing a closed pre-filing stage during which the SEC would be required to respond within 45 days. In their view, any portfolio limits or restrictions on asset classes would only lead to higher fees, which would ultimately fall on the shoulders of fund shareholders.
The 1940 Act has been in effect for more than eight decades, and SEC decisions under it shape the rules of the game for all crypto funds awaiting approval. The outcome of this dispute will determine not only Grayscale's fate but also that of the entire digital asset market in the United States.
My analysis: Grayscale's position appears rational — the attempt to force crypto ETFs into the Procrustean bed of legislation from the 1940s fails to account for the specifics of digital assets. However, the SEC's delays may not be accidental but rather part of a broader strategy to slow institutional adoption of cryptocurrencies. Investors should prepare for prolonged uncertainty on this matter.