A spokesperson for Bitwise said the company was evaluating the development.
A key US regulator halted the approval process for a new cryptocurrency exchange-traded fund just hours after initially signing off, in a setback for digital-asset proponents hoping for easy-to-trade funds that expand access to more tokens.
On Tuesday, the Securities and Exchange Commission’s Division of Trading and Markets green-lit the Bitwise 10 Crypto Index Fund conversion to an ETF, according to a public filing. But later the same day, SEC Assistant Secretary Sherry Haywood issued an “indefinite stay,” which effectively suspended the launch of the fund seeking to offer regulated, one-click exposure to a diversified basket of cryptocurrencies.
The episode showcases the continued regulatory ambiguity for these new offerings as SEC Chair Paul Atkins eyes friendlier rules for the industry. Allowing such funds to hit the market would be a big deal for investors who currently do not have easy access to many crypto tokens in a low-cost ETF wrapper.
A spokesperson for Bitwise said the company was evaluating the development.
“We’ve been encouraged by the constructive engagement with the SEC under the new administration and remain committed to working productively to expand access to crypto,” the spokesperson said.
Bitwise’s fund, which would trade under the ticker BITW, is designed to track a market-cap-weighted index of some of the major digital assets including Bitcoin, Ether, XRP and Polkadot, rebalanced monthly. A growing number of similar filings — including Cathie Wood’s Ark crypto active ETF and a new potential crypto ETF from Grayscale Investments — remain in limbo as the SEC grapples with how to oversee products that straddle both traditional finance and decentralized technologies.
Read More: Grayscale Stymied on New Crypto ETF Even as SEC Backs Industry
“This reflects the internal disarray at the SEC around digital-asset policy,” said Adam Gana, an attorney at law firm Gana Weinstein LLP. “The public sees conflicting actions — approvals followed by sudden reversals — which creates confusion and undermines market confidence.”
Typically, the agency can approve financial products through a vote by the full commission or via delegated authority exercised by SEC staff. However, if a product is approved at the staff level, any one of the commissioners can intervene and place a hold on that approval by requesting a formal review.
The SEC declined to comment.
Approval for both the multi-token ETFs from Grayscale and Bitwise stands to open the field to other firms, including one linked to President Donald Trump.
Trump Media & Technology Group Corp., which counts the president as its largest shareholder, recently filed to launch the Truth Social Crypto Blue Chip ETF with exposure to Bitcoin, Ether, Solana, XRP and Cronos.
“My guess is that the SEC wants to finalize some sort of framework or generic listing standards for crypto asset ETPs before they allow these products to convert to ETFs,” said James Seyffart, ETF analyst at Bloomberg Intelligence. “The other theory here is that one commissioner is slowing things down.”
