The U.S. Securities and Exchange Commission (SEC) initially approved Bitwise's request to convert its crypto index fund into an ETF — only to shock the market shortly after by suspending the process. The regulator claims it wants to “reconsider everything.”

✍️ Approval That Didn’t Last Long

On Tuesday, July 22, the SEC’s Division of Trading and Markets greenlit the Bitwise 10 Crypto Index Fund ETF, which tracks the top cryptocurrencies by market cap — including Bitcoin, Ethereum, XRP, Solana, and Polkadot.

However, shortly after, Sherry R. Haywood, SEC Associate Director, issued a formal notice under Rule 431 that suspended the decision until the Commission makes a final ruling.

💼 What’s Behind the SEC’s U-Turn?

The Bitwise fund (ticker: BITW) isn’t the only one facing this kind of regulatory whiplash. A similar pattern occurred with the Grayscale Digital Large Cap Fund LLC, where the SEC first approved the ETF conversion request — only to revoke it the next day.

Both Bitwise and Grayscale have major exposure to Bitcoin, Ethereum, and other altcoins like SOL, ADA, and XRP. They are traded over-the-counter and target qualified investors.

Experts believe the SEC might be working on a unified regulatory framework for crypto ETFs to avoid confusion and bring clarity to the listing process.

🗣️ Experts React: Confusion and Frustration

The crypto community quickly responded on X:

🔹 Scott Johnsson of Van Buren Capital suggested that the sudden reversal may be politically motivated, pointing to Democratic Commissioner Caroline Crenshaw, known for her crypto skepticism.

🔹 James Seyffart, an ETF analyst, agreed with Johnsson and added that the SEC’s delay tactic is nothing new. However, he remains hopeful that the agency is working on a standardized process to allow crypto ETFs to be listed smoothly.

🧾 Approval Process Can Take Up to 240 Days

Under current rules, exchanges must file Form 19b-4, initiating a review process that can last up to 240 days. However, insiders say that the proposed framework could shorten that window significantly, accelerating ETF listings.

🗳️ Politics and Crypto Collide

Adding to the uncertainty is a tense political climate. The SEC is currently reviewing multiple crypto ETF proposals — including ones tied to Solana (SOL) and Dogecoin (DOGE) — while navigating Trump’s evolving stance on crypto regulation.

Representatives from Bitwise and the SEC have not responded to requests for comment.


#SEC , #crypto , #etf , #CryptoInvesting , #Regulation

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