XRP Lawsuit News: SEC Halts Grayscale ETF—What It Means for XRP and Future ETFs

The U.S. Securities and Exchange Commission (SEC) has stunned the crypto market once again, this time by suspending the trading of Grayscale’s Digital Large Cap (GDLC) ETF—a multi-asset fund that includes XRP and Solana.

The move has not only triggered confusion but has reignited conversations around the legal and regulatory path ahead for Ripple, XRP, and broader crypto ETF approvals.

SEC Puts Brakes on Grayscale’s ETF

On July 3, the SEC halted the launch of the GDLC ETF just days after approving it for trading on NYSE Arca. The ETF, managed by Grayscale, is composed primarily of Bitcoin and Ethereum but also allocates 4.8% to XRP and 2.8% to Solana. While the fund had received a green light under delegated authority, the SEC invoked Rule 431 to initiate an internal review, effectively pausing its debut.

The SEC has suspended Grayscale’s plan to convert its Digital Large Cap Fund into a spot ETF, citing the inclusion of BTC, ETH, SOL, XRP, and ADA. Source: CryptoMutant via X

Grayscale called the SEC’s reversal “unexpected,” stating in an email to Decrypt, “While this development was unexpected, it reflects the dynamic and evolving nature of the regulatory landscape surrounding a first-of-its-kind digital asset product like GDLC.”

This sudden suspension has raised eyebrows across the industry, particularly among those following the XRP lawsuit and Ripple’s ongoing legal battle with the regulator.

XRP and Solana in the Crosshairs

Though the SEC didn’t provide a detailed explanation, experts believe the presence of altcoins like XRP and Solana—which do not yet have approved standalone ETFs—played a central role in the pause. James Seyffart, ETF analyst at Bloomberg, noted that the move is likely a precautionary measure. “The SEC seems to be signaling that it wants to finalize a robust regulatory framework before allowing ETFs with altcoin exposure to proceed,” he said.

This action has brought further uncertainty around XRP ETF news and whether XRP coin can break through regulatory resistance in the near term. While XRP price today remains relatively stable around $2.23, the market sentiment is cautiously watching for further SEC moves.

Ripple vs SEC: Implications Beyond One Fund

The suspension in this instance has wider consequences, most notably if one takes the Ripple vs SEC case into consideration. Although Ripple achieved a partial win in 2023 when a court ruled that XRP is not a security when sold on secondary markets, the regulator continues to be interested in examining Ripple Labs, most notably institutional sales.

Coinbase CLO Paul Grewal says the SEC should pause and acknowledge its crypto regulations are not working. Source: Bloomberg Crypto via X

This hiatus on GDLC appears to be part of a broader plan by the SEC—one that balances access to markets against prudence. It has been seen as a stalling tactic, allowing the agency time to gauge investor reaction and establish legal underpinnings.

Today, this is not a clear-cut rejection but a wink that the regulatory pathway to XRP crypto ETFs remains under active consideration. Until the SEC provides clear guidance, assets like XRP may continue facing these abrupt regulatory obstacles.

Market Reaction and XRP Price Forecast

Despite the regulatory fog, market analysts remain optimistic about XRP’s long-term potential. As noted in recent XRP price prediction discussions, many believe that a final resolution in the lawsuit, coupled with eventual ETF approvals, could trigger substantial institutional inflows.

XRP was trading at around $2.23, down 2.66% in the last 24 hours at press time. Source: XRP Liquid Index (XRPLX) via Brave New Coin

If a fully compliant XRP ETF is greenlit in the future, it could be a major catalyst for price action. Some XRP predictions estimate short-term targets around $3.50, with more bullish forecasts placing the XRP price prediction 2025 above $10—should Ripple succeed in securing further regulatory wins.

That said, the XRP price forecast 2025 remains tightly linked to the outcome of ongoing legal and regulatory developments.

What Comes Next for XRP ETFs?

The SEC’s actions underscore the complexity of bringing altcoin-focused ETFs to the market. While Bitcoin and Ethereum have already made their ETF debuts—with Bitcoin ETFs attracting over $50 billion in assets—altcoins like XRP face a longer road.

Bloomberg has raised the approval odds for a spot XRP ETF to 95%. Source: STEPH IS CRYPTO via X

Still, Grayscale remains committed to launching the fund. “We are working closely with key stakeholders to meet all necessary requirements,” the firm stated. Furthermore, the XRP lawsuit news update and the rest of the Ripple SEC news will keep driving the future direction for XRP-based financial products.

For now, XRP cryptocurrency news is a mixture of optimism and skepticism, as investors await clearer indications from regulators and the markets. Whether this delay is a short-term detour or a long-term hiatus is at least partially in the hands of how quickly the SEC generates a final regulatory framework.

Final Thoughts

The SEC’s sudden halt of Grayscale’s ETF is not just significant for XRP—it sends a broader message about where altcoin ETFs stand in America. XRP sits in a state of legal limbo, its fate shaped as much by court decisions as by economic trends, until there is more defined regulation.