SEC considers Grayscale's Litecoin ETF amid ETF surge

The U.S. Securities and Exchange Commission (SEC) is reviewing Grayscale's proposal to convert its Litecoin Trust into an exchange-traded product (ETP), seeking public comments on the matter.

NYSE Arca submitted the 19b-4 filing for the Grayscale Litecoin Trust, as well as for a "Grayscale Solana Trust."

The public has 21 days from the proposal's publication in the Federal Register to submit their comments.

The SEC will then decide to approve, disapprove, or initiate further proceedings.

Grayscale's Litecoin Trust has approximately $215.4 million in assets under management, making it the largest Litecoin (CRYPTO:LTC) investment vehicle.

Grayscale argues that the trust, in its current form, does not accurately track the value of the underlying Litecoin holdings.

Converting the trust into an ETF would provide investors with a more secure and regulated way to invest in LTC.

Following the approval of spot Bitcoin ETFs in early January 2024, there has been a surge in applications for crypto ETFs, including those based on altcoins like Dogecoin (CRYPTO:DOGE), Solana (CRYPTO:SOL), and XRP (CRYPTO:XRP).

Firms like Bitwise, Tuttle Capital, and 21Shares have also submitted proposals for various crypto ETFs.

The rise in filings coincides with a leadership transition at the SEC.

The SEC will assess market risk, investor protection, and compliance with securities laws before making a final decision.