SEC Acknowledges Filing for Grayscale’s Spot Cardano ETF, Marking Key Step in Crypto ETF Approval Process

The U.S. Securities and Exchange Commission (SEC) has officially acknowledged a proposal from NYSE Arca, on behalf of Grayscale, to list and trade shares of the Grayscale Cardano Trust as a spot exchange-traded fund (ETF). This marks a crucial first step in the SEC’s review process, setting the stage for the agency to either approve or reject the proposed ETF in the coming months.

A Significant Step for Grayscale’s Cardano ETF Proposal

On February 24, the SEC acknowledged the filing for the Grayscale Cardano Trust, signaling the start of the clock for the agency’s decision-making process. While this is only the initial step in what could be a lengthy approval timeline, it is a significant milestone for Grayscale, a prominent crypto asset manager, as it seeks to bring a Cardano-focused ETF to the market.

This move comes amid an increasing number of crypto ETF filings and acknowledgments by the SEC under its new leadership. These filings include other high-profile applications, such as Cboe’s proposed XRP ETF, Grayscale’s spot XRP and Dogecoin ETFs, and Nasdaq’s filing concerning BlackRock’s iShares Bitcoin Trust (IBIT).

The Structure of the Grayscale Cardano ETF

Grayscale’s proposed Cardano ETF would track the price of Cardano (ADA) through an index that monitors the price of ADA across various major crypto exchanges, including Coinbase, Crypto.com, Bitfinex, and Kraken. These exchanges were selected for inclusion in the index due to their "material compliance with applicable U.S. federal and state licensing requirements."

Importantly, the proposed ETF would not allow investors to directly hold Cardano (ADA) tokens. Instead, they would invest in shares of the trust, which is designed to provide a convenient and cost-effective way for investors to gain exposure to ADA. The filing specifically notes that “an investment in the Shares is not a direct investment in ADA.”

The proposed custodian for the ETF is Coinbase Custody Trust Company, while BNY Mellon Asset Servicing would serve as the transfer agent and administrator. Despite Bitfinex not holding any licenses or registrations in the U.S., the exchange was included in the index due to its compliance with the “minimum liquidity requirement.”

A Surge in Crypto ETF Proposals

The acknowledgment of Grayscale’s Cardano ETF proposal comes amid a flurry of activity in the crypto ETF space, with a growing number of filings being submitted to the SEC. The influx of ETF applications follows the inauguration of U.S. President Donald Trump, whose administration has been seen as more crypto-friendly.

On February 24, Nasdaq also sought approval to list an ETF holding the native token of the Hedera Network (HBAR), continuing the trend of new crypto ETF proposals.

In addition, between February 19 and 20, the SEC acknowledged multiple filings related to cryptocurrency ETFs, including those focused on staking, options, in-kind redemptions, and new altcoin funds. This rapid expansion of crypto-themed ETFs further underscores the growing interest in cryptocurrency investment vehicles and the increasing efforts by asset managers to meet the demand for regulated, accessible products.

Conclusion

Grayscale’s Cardano ETF proposal is an important development in the broader landscape of crypto ETFs, signaling the growing maturation of the cryptocurrency investment market. With the SEC now formally acknowledging the filing, the clock is ticking on the agency’s decision, and the industry will be closely watching to see whether the SEC moves toward approval.

As the regulatory landscape for crypto assets evolves, the surge in ETF filings reflects a broader trend of institutional and retail interest in crypto-focused investment products. For now, the crypto community eagerly awaits the SEC’s next steps, which could pave the way for further advancements in the market for digital asset ETFs.