SEC Reverses Bitwise ETF Approval Pending Full Commission Review Amid Crypto Industry Uncertainty

The U.S. Securities and Exchange Commission (SEC) has reversed its accelerated approval of the Bitwise 10 Crypto Index Fund’s conversion to an exchange-traded fund (ETF), raising questions about the regulatory body’s approach to crypto-related products amid ongoing industry uncertainty. The initial decision, announced by the SEC’s Division of Trading and Markets on July 22, 2025, was swiftly rescinded. Assistant Secretary Sherry R. Haywood later stated the matter would be reviewed by the full Commission, citing Rule 431, which permits agencies to suspend decisions pending further scrutiny. The SEC has declined to elaborate on the review process, adhering to its policy of non-comment on ongoing deliberations, while Bitwise has not responded to requests for clarification [1].

The Bitwise 10 fund, trading under the ticker BITW, is a market-capitalization-weighted index comprising major cryptocurrencies such as Bitcoin, Ethereum, XRP, Solana, and Polkadot. Previously accessible only over-the-counter, its transition to an ETF format had been widely anticipated as demand for crypto fund conversions surged. This reversal mirrors a similar outcome involving the Grayscale Digital Large Cap Fund, whose ETF application also initially received accelerated approval before being suspended. Grayscale has publicly signaled its intention to pursue legal action if necessary to finalize its listing [1].

Analysts have proposed multiple theories to explain the SEC’s abrupt actions. Van Buren Capital’s General Partner Scott Johnson suggested the initial approvals may have been strategic moves to facilitate internal review or intervention by Commissioner Caroline Crenshaw, a known skeptic of cryptocurrencies. Johnson also highlighted potential political shifts within the SEC as a contributing factor [1]. Separately, Bloomberg Intelligence’s Eric Balchunas posited that the agency is likely delaying decisions to establish a standardized framework for crypto ETF approvals. He speculated the SEC aims to replace the current 19b-4 filing process with a streamlined mechanism to address regulatory inconsistencies [1].

The lack of transparency surrounding the suspensions has intensified speculation about the SEC’s broader strategy. While the agency has not officially stated its rationale, the pattern of rapid reversals suggests a reevaluation of risk management protocols. This uncertainty has left industry participants and investors in limbo, as the regulatory environment for crypto ETFs remains undefined. The delayed clarity could impact market dynamics, particularly as institutional demand for crypto exposure continues to grow.

The SEC’s actions underscore the challenges of integrating crypto assets into traditional financial frameworks. With competing perspectives on investor protection, market integrity, and innovation, the agency’s decisions could shape the trajectory of the crypto sector for years to come. As the full Commission deliberates, stakeholders await guidance on whether and how the SEC will normalize crypto ETF listings, a move that could either catalyze mainstream adoption or further entrench regulatory ambiguity [1].

Source: [1] [title] [url] https://coinmarketcap.com/community/articles/68818a3b30ae1d2233474a3c/