 
 
The U.S. Securities and Exchange Commission approved the conversion of Bitwise’s cryptocurrency index fund into a fully-fledged exchange-traded fund (ETF), but then quickly hit pause. This marks the second time this month that the regulator has intervened to block a staff-level greenlight.
Bitwise’s Crypto Index Fund Conversion In Limbo As SEC Halts Approval
The Securities and Exchange Commission’s Division of Trading and Markets granted an “accelerated approval” to convert the Bitwise 10 Crypto Index Fund (BITW) into a spot exchange-traded fund (ETF) on Tuesday, as per a filing. The fund would have allowed investors to gain exposure to a diversified basket of digital assets, including Bitcoin, Ethereum, Ripple’s XRP, Solana (SOL), and Cardano (ADA).
However, the commission’s Assistant Secretary Sherry R. Haywood said in a letter the same day that the “order is stayed until the Commission orders otherwise,” and the “Commission will review the delegated action.”
Once invoked, the rule automatically blocks the approval until the Commission decides whether to affirm, revise, or overturn it. No timeline is required, and the SEC is not obligated to explain its decision to the public.
A similar product, Grayscale’s Digital Large Cap Fund (GDLC), which tracks BTC, ETH, XRP, SOL, and ADA, also received initial SEC approval before the agency stayed the action days later, pausing the fund’s conversion into a spot ETF.
 
Grayscale responded a week later by asserting that the delay had investors “suffering harm” and hinted at the possibility of legal action.
“Both of these should be allowed to convert/uplist ASAP.” Nate Geraci, co-founder of The ETF Institute, stated in a post on X, describing the move as a “bizarre situation.”
Funny Business Happening At The SEC?
Scott Johnsson, a general partner at investment management company Van Buren Capital, suggested on social media that the Bitwise ETF was given the nod “under delegated authority” as the SEC likely assumed that its sole Democrat commissioner, Caroline Crenshaw, would try to disrupt the approval process.
Alternatively, Johnsson reckoned the pause might be a plan by the Securities and Exchange Commission, now helmed by pro-crypto chairman Paul Atkins, to circumvent the 240-day statutory period for final approval.
“Both explanations are the kind of funny business that shouldn’t really be happening under Atkins,” the pundit added.
Source: https://zycrypto.com/bizarre-sec-approves-then-pauses-bitwises-bid-to-convert-etf-holding-bitcoin-ether-and-xrp/