Why Does the SEC Keep Pausing ETFs That Hold XRP? A Look at the Bitwise Case

Key Points

1. The SEC approved Bitwise's proposal to convert its Bitwise 10 Crypto Index Fund into a spot ETF but later paused the approval, causing market confusion.

2. Disputes arose over the reported 6.7% weight of XRP in the fund, with analysts questioning its accuracy.

3. This is the second instance this month where the SEC approved and then paused a crypto ETF, following a similar case with Grayscale's Digital Large Cap Fund.

4. The SEC faces challenges in applying consistent standards to crypto ETFs, especially for assets like XRP and ADA that lack standalone products.

5. The SEC is dealing with a growing pipeline of crypto ETF filings, including proposals from Franklin Templeton, Fidelity, and Invesco Galaxy, alongside delays for lesser-known tokens.