In an unexpected turn of events, the U.S. Securities and Exchange Commission (SEC) first approved and then swiftly halted the launch of a major crypto ETF — one that includes prominent digital assets like Bitcoin (BTC), Ethereum (ETH), and XRP. This abrupt move has left investors and industry experts puzzled, with some calling it a “strange situation” that raises fresh questions about the SEC’s internal decision-making process.
SEC Greenlights, Then Pauses Bitwise Crypto ETF Approval
On July 22, 2025, the SEC’s Division of Trading and Markets granted fast-track approval to a proposed rule change that would allow NYSE Arca to list and trade shares of the Bitwise 10 Crypto Index ETF. The fund is designed to track the Bitwise 10 Large Cap Crypto Index, a multi-asset benchmark that includes the most valuable cryptocurrencies weighted by their free-float market capitalization.
In its official release, the SEC cited authority under Section 19(b)(2) of the Securities Exchange Act, stating:
“Accordingly, the proposed rule change… is hereby approved on an accelerated basis.”
The ETF portfolio, as of June 30, 2025, includes the following asset allocation:
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Bitcoin (BTC): 78.72%
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Ethereum (ETH): 11.10%
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XRP (XRP): 4.97%
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Solana (SOL): 3.03%
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Cardano (ADA): 0.78%
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Sui (SUI): 0.35%
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Chainlink (LINK): 0.32%
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Avalanche (AVAX): 0.28%
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Litecoin (LTC): 0.24%
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Polkadot (DOT): 0.19%
The ETF structure mandates that at least 85% of its holdings must consist of digital assets that are approved as reference assets for exchange-traded products. The remaining 15% is allowed to include other cryptocurrencies.
Coinbase Custody Trust is set to act as the digital asset custodian, while BNY Mellon will handle the cash and administrative operations. The fund’s Net Asset Value (NAV) will be calculated daily using pricing data from CF Benchmarks Ltd., which aggregates information from major crypto exchanges.
SEC’s Office of the Secretary Issues Sudden Suspension
Shockingly, just hours later on the same day — July 22 — the SEC’s Office of the Secretary issued a letter under Rule 431 of the Commission’s Rules of Practice to suspend the approval for further internal review:
“This letter notifies you that, pursuant to Rule 431 of the Commission’s Rules of Practice, 17 CFR 201.431, the Commission will review the delegated action. Pursuant to Rule 431(e), the July 22, 2025 order is stayed until the Commission orders otherwise.”
The abrupt reversal has left the market in limbo. Investors and analysts are now questioning why such a swift change was made and whether internal disagreement or political pressure might be influencing regulatory decisions at the highest levels.
Not the First: Grayscale Faced Similar SEC Treatment
Interestingly, this is not an isolated incident. A nearly identical scenario unfolded recently with Grayscale Investments, which had sought approval to list its Digital Large Cap Fund ETF under the same modified NYSE Arca Rule 8.500-E. That application was also initially approved by the Division of Trading and Markets — only to be immediately stayed for further review by the full Commission.
Nate Geraci, President of Novadius Wealth Management, took to social media platform X (formerly Twitter) to express his concern:
“The SEC’s Division of Trading & Markets approved the Bitwise 10 Crypto Index ETF… But just like the Grayscale Digital Large Cap ETF, the approval was instantly stayed. In my opinion, both of these ETFs should be allowed to convert/list ASAP. Strange situation.”
What Comes Next?
The SEC has not provided any public explanation for the sudden reversal. The agency’s silence leaves market participants to speculate about potential internal conflicts, legal concerns, or political sensitivities surrounding certain assets like XRP, which has been at the center of regulatory controversy for years.
Until the full Commission reaches a final decision, the fate of the Bitwise 10 ETF — and similar crypto ETFs — remains uncertain. This episode adds yet another layer of unpredictability to the already volatile world of cryptocurrency regulation in the U.S.
Conclusion:
This “approve-then-pause” pattern by the SEC, especially when involving major crypto products with XRP exposure, suggests a deeper regulatory struggle behind the scenes. With growing institutional interest in digital assets, the demand for clarity and consistency in crypto ETF approvals is becoming more urgent than ever.
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