The U.S. Securities and Exchange Commission (SEC) has sparked debate after initially approving and then pausing the conversion of Bitwise’s 10 Crypto Index Fund (BITW) into a spot exchange-traded fund (ETF). The decision, made on July 22, involved a reversal that left the crypto community questioning the regulator’s rationale. Initially, the SEC’s Division of Trading and Markets approved the ETF’s listing on NYSE Arca under Rule 8.500-E, positioning it as the first diversified crypto ETF for U.S. investors. The fund includes Bitcoin, Ethereum, XRP, Cardano (ADA), Solana (SOL), and other major altcoins [1].

However, hours later, the SEC’s Office of the Secretary invoked Rule 431(e) to halt the approval, triggering a full…