SEC Suspends Bitwise Crypto ETF's Accelerated Approval via Rule 431 Review

The U.S. Securities and Exchange Commission (SEC) has suspended its accelerated approval for Bitwise Asset Management’s proposed conversion of the Bitwise 10 Crypto Index Fund into an exchange-traded fund (ETF), signaling ongoing regulatory caution in the crypto space [1]. The initial approval, issued by the SEC’s Division of Trading and Markets on July 22, 2025, was swiftly withdrawn, with Assistant Secretary Sherry R. Haywood announcing that the matter would be reviewed by the full Commission [1]. In a statement, the SEC cited Rule 431, allowing the agency to pause decisions pending a comprehensive review, while declining to comment further [1]. Bitwise has not yet responded to requests for clarification.

The Bitwise 10 fund, which previously traded over-the-counter under the ticker BITW, is designed to track a basket of cryptocurrencies weighted by market capitalization, including Bitcoin, Ethereum, XRP, Solana, and Polkadot [1]. Its proposed ETF structure had drawn significant industry attention, as demand for crypto-focused investment vehicles has surged in recent months. However, the SEC’s abrupt reversal echoes a similar pattern with the Grayscale Digital Large Cap Fund, which also received accelerated approval before the agency suspended its ETF conversion request. Grayscale has since indicated it may pursue legal action to resolve the matter [1].

Analysts have speculated on the motivations behind the SEC’s actions. Van Buren Capital General Partner Scott Johnson suggested the initial approvals may have been strategic, aimed at enabling deeper scrutiny or intervention by Commissioner Caroline Crenshaw, a known crypto skeptic [1]. Johnson also highlighted potential internal shifts within the SEC as a factor in delayed decisions. Bloomberg Intelligence analyst Eric Balchunas added that the agency appears to be working toward a standardized framework for crypto ETFs, possibly replacing the current 19b-4 filing process with a more streamlined review mechanism [1].

The uncertainty has left market participants in limbo, with the future of crypto ETF listings—and their broader implications for financial markets—remaining unclear. While the SEC has not publicly explained the suspensions, the recurring pattern underscores the agency’s cautious approach to regulating digital assets, balancing innovation with investor protection.

Source: [1] [title: SEC Puts Brakes on Bitwise Crypto ETF Approval Amid Industry Uncertainty] [url: https://coinmarketcap.com/community/articles/68818a3b30ae1d2233474a3c/]