The U.S. Securities and Exchange Commission (SEC) unexpectedly halted the approval process for Bitwise’s proposed spot 10 Crypto Index Fund (ETF) shortly after its staff granted initial clearance.
This reversal leveraged Rule 431, which empowers the full Commission to review and pause a staff-level decision. The rule imposes no mandated timeline for resolution, introducing significant uncertainty.
The action follows a similar recent pause placed on the Grayscale Digital Large Cap Fund (GDLC). Regulatory observers interpret this as indicating persistent internal resistance within the SEC, particularly concerning multi-asset crypto ETFs.
Market participants and analysts have criticized the abrupt delays. They point to the repeated use of Rule 431 as undermining issuer confidence and complicating strategic planning, while calling explicitly for clearer regulatory guidelines tailored to crypto ETFs.
The SEC’s caution underscores ongoing regulatory ambiguity surrounding crypto investment products. This approach suggests potential delays for similar multi-asset crypto ETF applications in the near term.
Overall, the incident highlights the complex regulatory pathway facing crypto ETFs despite apparent progress at the staff level.