SEC Acknowledges Grayscale's Cardano ETF Proposal

The United States Securities and Exchange Commission (SEC) has officially acknowledged NYSE Arca’s filing for a spot Cardano exchange-traded fund (ETF).

In a notice dated February 24, the regulator confirmed that it has begun reviewing the proposal to list and trade the Grayscale Cardano Trust shares under NYSE Arca Rule 8.201-E. This marks the beginning of a formal evaluation process, during which the SEC will decide whether to approve or reject the ETF.

Following this acknowledgement, a 240-day review window will begin once the filing is published in the Federal Register, a step that typically occurs within a few days. This timeline sets the stage for a prolonged regulatory assessment before making any final decision.

NYSE Arca initially submitted the proposal earlier this month via a 19b-4 form, making it the 60th crypto ETF filing of the year. The 19b-4 filing serves as a formal request for a rule change, but approval of an S-1 registration statement will also be required before trading can commence.

If approved, the Grayscale Cardano Trust would expose investors to Cardano (ADA) without requiring them to hold the asset directly. Instead, investors would purchase the trust’s shares, with its value tied to an index tracking ADA’s price across major exchanges such as Coinbase, Kraken, Crypto.com, and Bitfinex. Despite lacking U.S. licenses, Bitfinex was included in the index, as it met the necessary liquidity requirements.

For asset security, Coinbase Custody Trust Company would oversee the safekeeping of the fund’s assets, while BNY Mellon would serve as the transfer agent and administrator, ensuring smooth operational management.

The SEC is actively engaging with crypto-related ETF filings, having acknowledged several proposals in February. Notably, the commission has accepted Grayscale Investments’ updated application for a spot Solana ETF, indicating a shift in the regulator’s approach to crypto-focused investment products.

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