- SEC’s sudden ETF pause highlights internal conflicts in crypto fund regulations
- Discrepancies in XRP’s allocation raise transparency concerns in Bitwise’s fund
- Surging ETF applications signal mounting pressure on SEC’s regulatory framework
In a surprising turn of events, the U.S. Securities and Exchange Commission (SEC) approved Bitwise’s proposal to convert its Bitwise 10 Crypto Index Fund (BITW) into a spot exchange-traded fund (ETF), only to pause the approval moments later.
This abrupt move has left the market puzzled. And now, the focus is turning to the fund’s asset allocation, especially its reported weight of XRP, which some experts argue may not be accurate.
Dispute emerges over the fund’s XRP weight
On paper, the fund’s structure seems clear. About 90% of its weight is in Bitcoin and Ethereum. The remaining 10% is divided among eight other major altcoins, including Solana, Cardano, and XRP.
An internal source close to the matter reportedly confirmed XRP’s weight in the fund at 6.7%. But not everyone is convinced. Questions began to surface online when observers, including legal analyst Bill Morgan, expressed doubts about that percentage. They suggest XRP’s true allocation might be even higher, pointing to possible discrepancies in fund disclosures.
This is the SEC’s second “approve and pause” this month
The pause in the Bitwise approval is not an isolated incident. A similar scenario recently unfolded with Grayscale’s Digital Large Cap Fund, which also received a green light before the SEC stepped back to reassess.
Related: XRP Escrow Is Bullish, Not a Dump; and the SEC’s Own Words Prove It
Both cases seem to underscore a larger issue: the SEC’s struggle to apply consistent standards to crypto ETFs, especially for assets like XRP and ADA that don’t yet have their own standalone products.
The Commission’s decision to review its own staff’s action also signals either internal conflict or extreme regulatory caution. This indecision adds another layer of uncertainty to an already complex environment for crypto in the U.S.
Related: “They Already Paid in Cash. Sorry.”: Ex-SEC Official Debunks XRP Rumors
Crowded and Complicated ETF Pipeline
Meanwhile, the SEC continues to work through a growing pipeline of crypto ETF filings. On the same day the Bitwise pause occurred, applications from Franklin Templeton, Fidelity, and Invesco Galaxy also surfaced.
These proposals seek amendments to Bitcoin and Ethereum ETF mechanics. Additionally, filings for ETFs tied to lesser-known tokens like SUI and ONDO were either reviewed or delayed.
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