The U.S. Securities and Exchange Commission (SEC) has acknowledged a proposal from NYSE Arca to list and trade shares of the Grayscale Cardano Trust as a spot Cardano exchange-traded fund (ETF).
This acknowledgment, made on Feb. 24, is the first step in the approval process. It does not mean the ETF has been approved, but it marks the beginning of the SEC’s review period. The regulator will now evaluate the proposal before making a final decision.
The trust will monitor daily ADA prices based on data from major cryptocurrency exchanges, including Coinbase, Crypto.com, Bitfinex, and Kraken. These exchanges were selected because they comply with U.S. federal and state regulations. However, Bitfinex was included despite not having U.S. licenses, as it met the minimum liquidity requirement necessary for the ETF’s price tracking.
Major Financial Institutions to Oversee Fund Operations
If approved, key financial institutions will manage the Grayscale Cardano Trust ETF. Coinbase Custody Trust Company will act as the custodian for the fund, meaning it will be responsible for securely holding the digital assets backing the ETF.
BNY Mellon Asset Servicing will act as the transfer agent and administrator of the ETF. Its role will involve managing investor transactions, processing fund transfers, and ensuring compliance with regulatory standards.
According to the official filing, investors in the ETF will not own Cardano directly. Instead, the ETF will provide a cost-effective and convenient way to gain investment exposure to ADA without dealing with cryptocurrency exchanges or wallets.
SEC Sees Surge in Crypto ETF Applications
The SEC’s acknowledgment of the Grayscale Cardano ETF comes as the agency reviews a growing number of cryptocurrency-based ETFs. Over the past few weeks, several major financial firms have submitted proposals for new crypto-related funds.
One of the most notable filings includes Grayscale’s spot XRP and Dogecoin ETFs, which aim to provide similar investment opportunities for these digital assets. Another proposal, filed by Cboe, seeks to launch an XRP ETF.
In addition to Grayscale’s filings, Nasdaq has also submitted an application to introduce Bitcoin ETF options tied to BlackRock’s iShares Bitcoin Trust (IBIT). These options would allow traders to speculate on Bitcoin price movements within a regulated framework.
On Feb. 24, Nasdaq submitted another request to list an ETF that would track the price of Hedera’s (HBAR) token. Just days earlier, on Feb. 19 and 20, the SEC acknowledged multiple ETF proposals related to staking, options trading, in-kind redemptions, and new types of altcoin investments.
Pro-Crypto Policies Fuel Institutional Interest in ETFs
The rise in crypto ETF applications follows the President Donald Trump winning U.S. election. Trump has expressed a more favorable stance toward cryptocurrency. His administration’s position on crypto regulation appears to encourage financial institutions to push for more regulated investment products in the crypto space.
