Grayscale Digital Large Cap Fund Faces SEC Review Amid NYSE Arca Listing Bid

TL;DR

**GDLC's stalled NYSE Arca listing due to SEC review means continued NAV deviation and regulatory limbo, making it a risky bet for short-term traders.**

AI Summary

Grayscale Digital Large Cap Fund LLC (GDLC) filed its 10-K for the fiscal year ended June 30, 2025, reporting an aggregate market value of shares held by non-affiliates of $609,362,101 as of December 31, 2024, with 15,867,400 shares outstanding as of September 2, 2025. The Fund's investment objective is to reflect the value of its digital asset holdings, primarily the top digital assets by market capitalization. A significant development occurred on July 1, 2025, when the SEC approved GDLC's application to list on NYSE Arca, Inc., though this approval was subsequently stayed for review. The Fund currently trades on OTCQX under the ticker GDLC, but lacks an active redemption program, which has historically led to substantial premiums or discounts to its Net Asset Value (NAV) per Share. Management of the Fund underwent a reorganization on January 1, 2025, with Grayscale Investments Sponsors, LLC (GSIS) becoming the sole manager effective May 3, 2025, following the withdrawal of Grayscale Operating, LLC (GSO). The Fund's digital asset components were based on the CoinDesk Large Cap Select Index (DLCS) from July 1, 2022, to June 5, 2025, with specific criteria for inclusion, such as being in the top 250 in the DACS report and having Coinbase Custody services available.

Why It Matters

This 10-K reveals Grayscale Digital Large Cap Fund's ongoing efforts to transition from OTCQX to NYSE Arca, a move that could significantly enhance liquidity and investor access, potentially narrowing the historical premium/discount to NAV. The SEC's stay on the NYSE Arca listing approval introduces regulatory uncertainty, impacting investor confidence and the Fund's competitive positioning against other digital asset investment vehicles. For employees and customers, a successful listing could mean greater market stability and growth, while a prolonged regulatory battle could hinder expansion. The broader market watches closely as this case sets precedents for digital asset product listings, influencing the competitive landscape for firms like BlackRock and Fidelity in the burgeoning crypto ETF space.

Risk Assessment

Risk Level: high — The risk level is high due to the extreme volatility of digital assets, as explicitly stated in the filing, and the largely unregulated nature of Digital Asset Trading Platforms. Furthermore, the SEC's stay on the NYSE Arca listing approval on July 1, 2025, introduces significant regulatory uncertainty, directly impacting the Fund's ability to improve liquidity and potentially narrow its historical trading premium/discount to NAV, which has been substantial.

Analyst Insight

Investors should exercise extreme caution and closely monitor regulatory developments regarding the NYSE Arca listing. Given the lack of a redemption program and historical NAV deviations, new investors should wait for greater regulatory clarity and a potential narrowing of the premium/discount before considering an investment.

Financial Highlights

debt To Equity

N/A

revenue

$609,362,101

operating Margin

N/A

total Assets

N/A

total Debt

N/A

net Income

N/A

eps

N/A

gross Margin

N/A

cash Position

N/A

revenue Growth

N/A

Key Numbers

• $609,362,101 — Aggregate market value of non-affiliate shares (As of December 31, 2024, indicating significant public interest.)
• 15,867,400 — Shares outstanding (As of September 2, 2025, representing the total tradable units.)
• July 1, 2025 — Date of SEC approval for NYSE Arca listing (Crucial date for potential market access, subsequently stayed.)
• January 1, 2025 — Date of Manager Reorganization (Grayscale Investments Sponsors, LLC and Grayscale Operating, LLC became Co-Managers.)
• May 3, 2025 — Date GSIS became sole Manager (Grayscale Investments Sponsors, LLC became the sole remaining manager.)
• June 30, 2025 — Fiscal year end (Reporting period for this 10-K filing.)
• 100 — Shares per Basket (Minimum unit for private placement share creation.)
• 6 months — Minimum holding period for restricted shares (Under Rule 144, impacting liquidity for private placement investors.)
• July 21, 2020 — Date of Cayman Islands Monetary Authority registration (Fund registered as a private fund under the Private Funds Act.)
• 250 — Top rank for DLCS Index inclusion (Digital assets must be ranked in the top 250 in CoinDesk's DACS report.)

Key Players & Entities

• Grayscale Digital Large Cap Fund LLC (company) — Registrant
• Grayscale Investments Sponsors, LLC (company) — Sole Manager of the Fund since May 3, 2025
• Digital Currency Group, Inc. (company) — Parent company of the Manager
• The Bank of New York Mellon (company) — Administrator of the Fund
• Coinbase Custody Trust Company, LLC (company) — Custodian of the Fund
• U.S. Securities and Exchange Commission (regulator) — Approved and then stayed NYSE Arca listing
• NYSE Arca, Inc. (company) — Target exchange for listing
• CoinDesk Indices, Inc. (company) — Index Provider for DLCS
• Cayman Islands Monetary Authority (regulator) — Registered and regulated the Fund as a private fund
• Grayscale Operating, LLC (company) — Co-Manager from Jan 1, 2025 to May 3, 2025

FAQ

Risk Factors

• Regulatory Uncertainty and Evolving Landscape [high — regulatory]: The digital asset industry faces significant and evolving regulatory scrutiny globally. Changes in regulations, including those related to digital asset trading, custody, and fund management, could materially impact the Fund's operations, investment strategy, and the value of its holdings. The SEC's stay on GDLC's NYSE Arca listing approval highlights this ongoing uncertainty.
• Volatility of Digital Asset Holdings [high — market]: The Fund's performance is directly tied to the price volatility of its underlying digital assets, which are subject to rapid and substantial fluctuations. As of December 31, 2024, the aggregate market value of non-affiliate shares was $609,362,101, reflecting the market's current valuation of these volatile assets.
• Lack of Active Redemption Program [high — market]: The absence of an active redemption program for GDLC shares has historically led to significant premiums or discounts to its Net Asset Value (NAV) per Share. This disconnect between market price and underlying asset value can create substantial investment risk for shareholders.
• Dependence on Third-Party Custodians [medium — operational]: The Fund relies on third-party custodians, such as Coinbase Custody, for the secure storage of its digital assets. Any failure, security breach, or operational issue with these custodians could result in the loss of Fund assets.
• Management Reorganization and Sole Manager Transition [medium — operational]: The management structure underwent a reorganization, with Grayscale Investments Sponsors, LLC (GSIS) becoming the sole manager effective May 3, 2025. While intended to streamline operations, such transitions can introduce operational complexities and potential disruptions.
• Valuation of Digital Assets [medium — financial]: Accurately valuing digital assets, especially those with less liquid markets, can be challenging. The Fund's NAV is based on market prices, which may not always reflect the true underlying value or be readily achievable in a liquidation scenario.
• Rule 144 Restrictions on Private Placements [low — legal]: Shares issued via private placement are subject to a minimum holding period of 6 months under Rule 144. This restriction impacts the liquidity of these shares and can affect the overall trading dynamics of the Fund.
• Cayman Islands Monetary Authority Registration [low — regulatory]: The Fund is registered as a private fund under the Private Funds Act in the Cayman Islands as of July 21, 2020. Compliance with these regulations is essential, and any changes or enforcement actions could impact the Fund.

Industry Context

The digital asset fund industry continues to navigate a complex and evolving regulatory landscape, with significant global scrutiny. Competition is fierce, with numerous funds vying for investor capital. Trends include the ongoing debate around spot ETF approvals, the increasing institutional adoption of digital assets, and the development of more sophisticated index methodologies for tracking the market.

Regulatory Implications

The SEC's actions, including the stay on GDLC's NYSE Arca listing, underscore the significant regulatory uncertainty surrounding digital asset investment products. Compliance with evolving global regulations, particularly concerning custody, trading, and investor protection, remains a paramount concern for funds like GDLC.

What Investors Should Do

1. Monitor SEC developments regarding digital asset ETFs and fund approvals, as these could significantly impact GDLC's market access and competitive position.
2. Evaluate the persistent premium/discount to NAV, as the lack of an active redemption program creates potential for significant price divergence from underlying asset value.
3. Assess the impact of the management reorganization on operational efficiency and future strategic decisions by the sole manager, GSIS.
4. Understand the liquidity constraints associated with private placement shares due to Rule 144 holding periods, especially if considering large transactions.
5. Stay informed about the performance and volatility of the underlying digital assets comprising the Fund's portfolio, as these directly drive returns.

Key Dates

• 2025-07-01: SEC approval for NYSE Arca listing — Indicated potential for broader market access and improved liquidity, though subsequently stayed.
• 2025-05-03: Grayscale Investments Sponsors, LLC became sole manager — Consolidated management responsibility under GSIS following reorganization.
• 2025-01-01: Management Reorganization — GSIS and GSO became Co-Managers, preceding GSIS's sole management.
• 2025-12-31: Aggregate market value of non-affiliate shares reported — $609,362,101 reflects the market's valuation of the Fund's holdings at a specific point.
• 2025-09-02: Shares outstanding reported — 15,867,400 shares outstanding represent the total units available for trading.
• 2025-06-05: Transition from DLCS Index — The Fund's digital asset components shifted from the CoinDesk Large Cap Select Index.

Glossary

Net Asset Value (NAV) per Share

The value of a fund's assets minus its liabilities, divided by the number of outstanding shares. (Crucial for understanding the intrinsic value of the Fund's holdings, often compared to its market trading price.)

CoinDesk Large Cap Select Index (DLCS)

An index designed to track the performance of large-cap digital assets, used by GDLC as a benchmark until June 5, 2025. (Defined the Fund's investment universe and methodology for asset selection prior to the index change.)

Rule 144

A Securities and Exchange Commission (SEC) rule that provides a safe harbor for the resale of restricted securities of public companies. (Imposes a minimum 6-month holding period on shares acquired through private placement, affecting liquidity.)

OTC

Over-the-Counter, a decentralized market where securities are traded directly between two parties without a central exchange. (GDLC currently trades on OTCQX, indicating its trading venue and potential liquidity characteristics.)

SEC

Securities and Exchange Commission, the U.S. government agency responsible for regulating the securities industry. (Plays a critical role in approving or denying listing applications and overseeing fund operations.)

Private Fund

A type of investment fund that is not registered with the SEC and is typically offered to a limited number of sophisticated investors. (GDLC is registered as a private fund in the Cayman Islands, indicating its regulatory framework.)

Basket

A unit of creation or redemption for certain investment funds, often comprising a specific set of underlying assets. (GDLC requires 100 shares per basket for private placement share creation, defining minimum transaction sizes.)

DACS Report

Digital Asset Classification Standard report by CoinDesk, used for ranking digital assets. (Inclusion criteria for the DLCS Index required assets to be ranked within the top 250 in this report.)

Year-Over-Year Comparison

This analysis is based on the fiscal year ended June 30, 2025. Direct comparison to the previous year's 10-K is not possible without access to that filing. However, the reported aggregate market value of non-affiliate shares ($609,362,101 as of December 31, 2024) and the significant event of the SEC's NYSE Arca listing approval (though stayed) indicate substantial market activity and evolving regulatory engagement compared to prior periods.

Filing Documents

• gdlc-20250630.htm (10-K) — 5305KB
• gdlc-ex31_1.htm (EX-31.1) — 25KB
• gdlc-ex31_2.htm (EX-31.2) — 25KB
• gdlc-ex32_1.htm (EX-32.1) — 9KB
• gdlc-ex32_2.htm (EX-32.2) — 9KB
• img243241469_0.jpg (GRAPHIC) — 1028KB
• img243241469_1.jpg (GRAPHIC) — 896KB
• img243241469_2.jpg (GRAPHIC) — 563KB
• 0001729997-25-000006.txt ( ) — 18386KB
• gdlc-20250630.xsd (EX-101.SCH) — 522KB
• gdlc-20250630_htm.xml (XML) — 2518KB

Forward-Looking Statements

Forward-Looking Statements This Annual Report on Form 10-K contains "forward-looking statements" with respect to the financial conditions, results of operations, plans, objectives, future performance and business of Grayscale Digital Large Cap Fund LLC (the "Fund"). Statements preceded by, followed by or that include words such as "may," "might," "will," "should," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential" or "continue," the negative of these terms and other similar expressions are intended to identify some of the forward-looking statements. All statements (other than statements of historical fact) included in this Annual Report that address activities, events or developments that will or may occur in the future, including such matters as changes in market prices and conditions, the Fund's operations, the plans of Grayscale Investments, LLC ("GSI"), the manager of the Fund before January 1, 2025, Grayscale Operating, LLC ("GSO"), the co-manager of the Fund from January 1, 2025 to May 3, 2025, and Grayscale Investments Sponsors, LLC ("GSIS"), the co-manager of the Fund from January 1, 2025 to May 3, 2025 and the sole remaining manager thereafter (each of GSI, GSO and GSIS, the "Manager", as the context may require, and GSO and GSIS, together, the "Co-Managers"), and references to the Fund's future success and other similar matters are forward-looking statements. These statements are only predictions. Actual events or results may differ materially from such statements. These statements are based upon certain assumptions and analyses the Manager made based on its perception of historical trends, current conditions and expected future developments, as well as other factors appropriate in the circumstances. Whether or not actual results and developments will conform to the Manager's expectations and predictions, however, is subject to a number of risks and uncertainties, including, but not limited to, those described in "Part I, Item

Business

Business 1 Item 1A.

Risk Factors

Risk Factors 64 Item 1B. Unresolved Staff Comments 104 Item 1C. Cybersecurity 104 Item 2.

Properties

Properties 105 Item 3.

Legal Proceedings

Legal Proceedings 105 Item 4. Mine Safety Disclosures 105 PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 106 Item 6. [Reserved] 107 Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 108 Item 7A.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 122 Item 8.

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data 123 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 123 Item 9A.

Controls and Procedures

Controls and Procedures 123 Item 9B. Other Information 123 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 124 PART III Item 10. Directors, Executive Officers and Corporate Governance 125 Item 11.

Executive Compensation

Executive Compensation 126 Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 126 Item 13. Certain Relationships and Related Transactions and Director Independence 127 Item 14. Principal Accountant Fees and Services 128 PART IV Item 15. Exhibits and Financial Statement Schedules 130 Item 16. Form 10-K Summary 131 Glossary of Defined Terms 132 v PART I

B usiness

Item 1. B usiness Overview of the Fund and the Shares The Fund is a Cayman Islands limited liability company that was formed and registered on January 25, 2018. The Fund's purpose is to hold the top digital assets by market capitalization that meet certain criteria set by the Fund. The Fund issues Shares, which represent equal, fractional undivided interests in the profits, losses, distributions, capital and assets of, and ownership of, the Fund, on a periodic basis to certain "accredited investors" within the meaning of Rule 501(a) of Regulation D under the Securities Act of 1933, as amended (the "Securities Act"). The Fund issues Shares only in one or more whole Baskets. A Basket equals 100 Shares. See "—Description of Creation of Shares." On July 1, 2025, the U.S. Securities and Exchange Commission (the "SEC"), through its Division of Trading and Markets acting pursuant to delegated authority, approved the application to list Grayscale Digital Large Cap Fund LLC (the "Fund") on NYSE Arca, Inc. ("NYSE Arca"). Shortly thereafter, the Commission issued a notice indicating that it would review the approval order, and imposed a stay on such order during its review. Grayscale Investments Sponsors, LLC, the manager of the Fund, remains committed to pursuing the listing of the Fund on NYSE Arca and continues to work closely with key stakeholders to obtain approval of the application. Shares purchased in the private placement are restricted securities that may not be resold except in transactions exempt from registration under the Securities Act and state securities laws, and any such transaction must be approved in advance by the Manager. In determining whether to grant approval, the Manager will specifically look at whether the conditions of Rule 144 under the Securities Act, including the requisite holding period thereunder, and any other applicable laws have been met. Any attempt to sell Shares without the approval of the Manager in its sole discretion will be v