The SEC swiftly stops Bitwise's crypto index fund approval process

The US Securities and Exchange Commission (SEC) had earlier approved Bitwise’s crypto index fund changes it had submitted. However, the federal agency swiftly stopped the process before it could be completed.

In a Tuesday, July 22 filing, the SEC’s Division of Trading and Markets took the Bitwise 10 Crypto Index ETF through the approval process. 

However, after several considerations, a US SEC Assistant Secretary, Sherry R. Haywood, stopped the process, pointing out that the commission would reconsider.

The SEC swiftly stops Bitwise’s crypto index fund approval process 

In a letter, Haywood stated that, based on Rule 431 of the Commission’s Rules of Practice, 17 CFR 201.431, the federal agency would reconsider Bitwise’s crypto index fund approval process. She then concluded that, following Rule 431(e), the order from July 22, 2025, is paused until the SEC decides differently.

On its website, the Bitwise 10 Crypto Index Fund revealed significant investments in cryptocurrencies such as  Bitcoin, Ethereum, XRP, Solana, Polkadot, and others. Its investments in the digital assets are based on their market capitalization. Notably, the fund is trading with the ticker “BITW.”

In the meantime, the SEC’s pause on its decision is not the first time this month. A similar scenario occurred when the commission decided whether to change the Grayscale Digital Large Cap Fund LLC. 

Like Bitwise’s fund, this fund has also made significant investments in cryptocurrencies. It operates over the counter for qualified investors, with Bitcoin taking up around 80% of its total assets followed by Ethereum accounting for roughly 11%.

In addition to the two cryptocurrencies, the Grayscale Digital Large Cap Fund has invested in others, including SOL, ADA, and XRP, but at a very small percentage.

Concerning the SEC’s decision on the Grayscale Digital Large Cap Fund LLC, the commission agreed to Grayscale’s request to convert another of its closed-end funds into an ETF on an accelerated basis. Still, a day later it placed the order on hold. Grayscale has stated it continues to work with regulators to list.

This occurs during Trump’s crypto stance as the SEC examines several crypto ETF proposals, including those that follow SOL and DOGE.

Neither the Bitwise representative nor the SEC representative responded to a comment request.

SEC’s recent delays in its decision have sparked controversy among individuals

Scott Johnsson, a general partner at Van Buren Capital, and an ETF analyst, James Seyffart shared their thoughts in an X post on why the SEC implemented the halts.

Based on Johnsson’s argument, the SEC was aware that Democratic Caroline Crenshaw, who has doubts about cryptocurrencies, could further complicate things, or these issues would be added to the deadlines for both proposals.

He then shared an X post referring to both explanations as nonsense, arguing that they should not occur under SEC Chair Paul Atkins.

Seyffart fully supported Johnsson’s argument. In an X post, he anticipated that the SEC would continue delaying things until they devised a suitable plan.  Seyffart sparked hope that the SEC is considering establishing a listing standard for crypto ETFs, which would speed up the process of getting those funds listed.

Under current rules, exchanges must file a 19b-4 form that initiates a review period that can take up to 240 days. However, reliable sources reveal that the suggested framework would shorten that timeline. 

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