24.07.2025 22:12
The Securities and Exchange Commission (SEC) made a stunning about-face regarding Bitwise Asset Management's application to convert its 10 Crypto Index Fund into an exchange-traded fund (ETF). Initially greenlighting the conversion under an accelerated approval process on July 23rd, the SEC swiftly reversed course hours later, placing the approval on hold. This unexpected turnabout has prompted widespread scrutiny of the agency's internal procedures and raised serious questions about its handling of crypto-related applications.
The abrupt halt, communicated via a letter from SEC Assistant Secretary Sherry Haywood, indefinitely delayed the conversion of Bitwise's fund (ticker symbol: BITW). Haywood's letter explicitly stated the order was "stayed until the Commission orders otherwise," leaving the fund, which holds a diverse portfolio of cryptocurrencies including Bitcoin, Ethereum, XRP, Solana, and Cardano, in regulatory limbo. This action, undertaken while the fund's application was under a fast-track review, has fueled speculation about the SEC's motivations and triggered significant criticism.
Online commentary, including posts on X (formerly Twitter), suggests the SEC's actions are potentially strategic. Some users theorize the SEC approved, then immediately halted, the conversion due to the fund's inclusion of XRP and ADA, potentially to prevent the emergence of standalone ETFs for those specific cryptocurrencies. This hypothesis raises concerns about whether the SEC's review process is truly impartial or influenced by political considerations, questioning the fairness and transparency of its decision-making.
Bloomberg ETF analyst James Seyffart confirmed the SEC's stay prevents Bitwise from proceeding with the ETF conversion. He clarified on X that the delay stems from a commissioner or commissioners halting the process, indicating further review is necessary before a final decision can be reached. Seyffart anticipates a resolution no sooner than next week. Echoing the widespread perplexity, Nate Geraci, president of NovaDius Wealth Management, described the situation as "bizarre," highlighting the unexpected nature and the lack of immediate clarity surrounding the SEC's actions. The incident underscores the ongoing uncertainty and challenges facing the cryptocurrency industry as it navigates the complexities of US regulatory oversight.
