SEC Reverses Course on Bitwise Crypto ETF Approval, Citing Unresolved Policy Issues

In a surprising turn of events, the U.S. Securities and Exchange Commission (SEC) has halted the launch of Bitwise’s proposed cryptocurrency exchange-traded fund (ETF) — just hours after initially granting approval. The fund, based on the Bitwise 10 Crypto Index, was intended to provide investors with broad exposure to major cryptocurrencies through a regulated investment vehicle.

Source: Chatgpt

Earlier this week, the SEC’s Division of Trading and Markets authorized the fund’s conversion into an ETF. However, later the same day, SEC Assistant Secretary Sherry Haywood issued an "indefinite stay" on the approval, effectively freezing the fund's launch indefinitely. The sudden reversal highlights ongoing uncertainty surrounding regulatory oversight of digital asset products. Legal experts say the SEC’s move reveals deeper tensions within the agency regarding crypto regulation. Adam Gana, a partner at Gana Weinstein LLP, described the situation as symptomatic of “internal disarray,” warning that such inconsistencies risk eroding public trust and deterring institutional participation.

James Seyffart, an ETF analyst at Bloomberg Intelligence, suggested that the SEC may be delaying ETF conversions until a comprehensive framework or listing standards for crypto-based exchange-traded products (ETPs) are finalized. Another possibility is that an individual commissioner has exercised their right to pause the process for further internal review.

Bitwise, whose ETF would have traded under the ticker BITW, said it is evaluating the SEC’s latest decision. A company spokesperson stated:

“We appreciate the constructive dialogue with the SEC under the current administration and remain committed to expanding regulated access to crypto markets.”

The fund is structured to track a market-cap-weighted index that includes top digital assets like Bitcoin (BTC), Ethereum (ETH), XRP, and Polkadot (DOT), with monthly rebalancing to maintain alignment with the broader market.

This development arrives at a time when several high-profile crypto ETF proposals — including submissions from Grayscale Investments and Ark Invest, led by Cathie Wood — remain under SEC review. The regulatory body continues to struggle with how to integrate decentralized assets into the traditional financial system while ensuring investor protection.

One of the more politically charged filings comes from Trump Media & Technology Group Corp., which recently proposed launching the Truth Social Crypto Blue Chip ETF, designed to include assets such as Bitcoin, Ether, Solana, XRP, and Cronos. The company is partially owned by former President Donald Trump, adding further visibility — and controversy — to the crypto ETF conversation.

Analysts believe the current pause is temporary but signals that the SEC is not yet ready to open the floodgates to multi-asset crypto ETFs without clearly defined guardrails.

The SEC declined to issue a public statement on the matter. Disclaimer:

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