The post SEC faces legal action after stay decision on Bitwise ETF despite approval appeared on BitcoinEthereumNews.com.

The US Securities and Exchange Commission (SEC) has approved the conversion of Bitwise 10 Crypto Index into an exchange-traded fund. The SEC’s Division of Trading and Markets approval follows a similar decision on the Grayscale Digital Large Cap fund. Similar to the Grayscale’s approval, the SEC has also ordered a stay on the conversion, which effectively pauses the listing of the index fund as an ETF until the stay is lifted. The accelerated approval from the Division of Trading and the stay order from the SEC  assistant secretary Sherry Haywood came within a few hours of each other. Haywood’s letter stated: “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. In accordance with Rule 431(e), the July 22, 2025 order is stayed until the Commission orders otherwise.” Unsurprisingly, the stay has raised several eyebrows in the crypto and ETF space, with ETF Foundation President Nate Geraci describing it as a “bizarre situation.” In his opinion, the SEC should allow Grayscale and Bitwise to convert their multi-asset funds to ETFs immediately. Grayscale pushes back as speculation grows about SEC’s stay decision Meanwhile, the SEC decision has reignited discussions about why the regulator would not allow the firms to convert despite approving the conversion. There are speculations that one or more SEC commissioners might be responsible for the order. Finance lawyer Scott Johnsson noted that the fact that this is happening again with Bitwise suggests that some “funny business” might be going on. He explained his theories, stating: “Either (1) they again approved under delegated authority knowing Crenshaw would throw another wrench — perhaps so GDLC wasn’t penalized by the first wrench or (2) this (and GDLC) was planned by the Commission as an…

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Filed under: News - @ July 23, 2025 12:29 pm