Crypto ETF Rollercoaster: Why the SEC Keeps Pushing Pause After Giving the Green Light

The crypto market is buzzing, but not always with good news. The U.S. Securities and Exchange Commission (SEC) is drawing criticism for a peculiar pattern. They are granting initial approval for new crypto Exchange-Traded Funds (ETFs) only to hit the pause button shortly after. This baffling "approve-and-stall" tactic has legal experts scrambling for answers. The latest instance saw the SEC issue a stay order on Bitwise’s application to convert its $1.68 billion 10 Crypto Index Fund (BITW) into a spot ETF. This happened mere hours after its initial accelerated approval. This echoes a similar move earlier this month. Grayscale’s Digital Large Cap Fund (GDLC) faced an identical post-approval delay. This prompted Grayscale to challenge the SEC's authority to reverse an effectively "passed into law" decision. So, what's behind these eleventh-hour halts? Bloomberg ETF analyst James Seyffart suggests the SEC might be strategically delaying. Their goal could be to finalize a comprehensive digital assets ETF framework. This framework would establish clear listing standards. It would streamline future approvals and remove the need for individual rule-change requests. However, finance attorney Scott Johnsson offers an alternative view. He speculates the regulator could be using delegated authority. This might be to avoid penalizing applicants or circumvent the statutory 240-day review period. Regardless of the motive, this uncertainty is causing ripples. The crypto community hopes for clarity before October. That's when several other high-profile ETF applications are due for final decisions. This could potentially end this puzzling regulatory limbo.