US SEC approved conversion of the Bitwise crypto index fund — then hit pause

The U.S. Securities and Exchange Commission approved the conversion of Bitwise's cryptocurrency index fund, but then quickly hit pause.

The SEC's Division of Trading and Markets granted an "accelerated approval" of the Bitwise 10 Crypto Index ETF on Tuesday, according to a filing. However, the SEC's Assistant Secretary Sherry R. Haywood later stayed the action and said the commission would review it.

"This letter is to notify you that, pursuant to Rule 431 of the Commission’s Rules of Practice, 17 CFR 201.431, the Commission will review the delegated action," Haywood said on Tuesday. "In accordance with Rule 431(e), the July 22, 2025 order is stayed until the Commission orders otherwise."

Bitwise did not immediately respond to a request for comment. An SEC spokesperson said they declined to comment on any individual company or filing. 

The Bitwise 10 Crypto Index Fund, which trades under the ticker “BITW,” currently consists of exposure to BTC, ETH, XRP, SOL, Polkadot, among others, on a market cap-weighted basis, according to its website.

The SEC's pause on Bitwise's proposals mirrors a similar move it made for deciding on whether to convert the Grayscale Digital Large Cap Fund LLC earlier this month. The fund trades over the counter for accredited investors and is composed primarily of Bitcoin at almost 80% and ETH at about 11%. Solana, Cardano, and XRP are also represented with single-digit percentages, according to its website.

The SEC approved Grayscale's proposal to convert another one of its closed-end funds into an ETF on an "accelerated basis," but a day later said it was staying the order.

Grayscale has said it "remains committed" to continue trying to list.

This comes as the SEC is also considering a wide array of crypto ETFs, from ones that track SOL to DOGE in the face of a friendlier regulatory environment for crypto following President Donald Trump's inauguration in January. 

Scott Johnsson, general partner at Van Buren Capital, and Bloomberg Intelligence ETF analyst James Seyffart opined on X on why the SEC issued the stays. 

Johnsson said it's possible that the SEC approved the conversion knowing that Democratic Caroline Crenshaw, who has been critical of crypto, would "throw another wrench" or that they were planned as part of both proposals' deadlines. 

"Both explanations are the kind of funny business that shouldn't really be happening under [SEC Chair Paul] Atkins," Johnsson said in a post on X. 

Seyffart said he agreed with Johnsson in a post on X, adding that the SEC may be stalling until the agency comes up with a framework. The SEC is looking into creating a listing standard for crypto ETFs, which would expedite the process for listing those funds. Under current rules, exchanges must file a 19b-4 form, triggering a review period of up to 240 days. The proposed framework would reduce that timeline, a source told The Block earlier this month. 

Updated at 10:20 p.m. UTC on July 22 to include additional comments