# SEC Halts Approval of Bitwise 10 Crypto Index ETF Shortly After Initial Nod

In a surprising turn of events, the U.S. Securities and Exchange Commission (SEC) has decided to temporarily suspend its earlier approval of Bitwise’s cryptocurrency index fund ETF conversion. This sudden reversal raises questions about the SEC’s regulatory approach and whether underlying political factors may be at play.

On July 22, as per multiple sources, the SEC’s Division of Trading and Markets gave the green light to Bitwise’s Bitwise 10 Crypto Index ETF conversion. However, mere hours later, Sherry R. Haywood, an associate director at the SEC, announced that the decision had been put on hold to allow the full Commission to conduct a detailed review.

In her statement, Haywood explained, “The Commission will review the action in accordance with Rule 431 of its procedures, effectively suspending the approval order issued on July 22.”

Bitwise has not yet issued an official comment, and requests for clarification have gone unanswered. Additionally, an SEC spokesperson declined to provide statements regarding specific companies or applications.

# Insights Into the Bitwise 10 Crypto Index ETF

The Bitwise 10 Crypto Index ETF, trading under the ticker BITW in the over-the-counter (OTC) market, tracks a market-capitalization-weighted portfolio of top cryptocurrencies. Its holdings include flagship digital assets such as Bitcoin (BTC), Ethereum (ETH), XRP (XRP), Solana (SOL), and Polkadot (DOT).

This sudden regulatory maneuver by the SEC bears a striking resemblance to a prior case involving Grayscale’s Digital Large Cap Fund. Grayscale’s fund, which primarily consists of approximately 80% Bitcoin and 11% Ethereum, alongside smaller allocations in Solana, Cardano (ADA), and XRP, experienced a similar “approve-and-halt” scenario when the SEC revoked its approval shortly after granting it.

# Experts Share Perspectives on the SEC Decision

Industry analysts are speculating about the motivations behind the SEC’s “approve-then-pause” strategy, citing a mix of procedural and political factors. Scott Johnsson, a partner at Van Buren Capital, observed, “It’s possible that the SEC anticipated dissent from Commissioner Caroline Crenshaw, a Democrat known for her critical stance on cryptocurrencies, leading them to reconsider.”

James Seyffart, an ETF analyst at Bloomberg Intelligence, suggested the move might be linked to the SEC’s broader regulatory agenda. “This could simply reflect the agency’s reluctance to commit until a comprehensive framework for crypto ETFs is finalized,” he noted.

Market participants and investors are closely following these events as they add to the growing uncertainty surrounding the SEC's handling of cryptocurrency ETFs. The temporary suspension has once again highlighted the complex and evolving dynamics between the regulatory body and the fast-growing crypto industry.