The United States SEC postpones the decision on converting Bitwise's crypto fund to an ETF to explore potential implications and ensure investor protection.
Bitwise Fund Overview
The Bitwise 10 Crypto Index Fund, established in 2017, invests in the top ten cryptocurrencies by market cap, including Bitcoin and Ethereum. The company is valued at $1.4 billion, with major allocations to Bitcoin and Ethereum.
SEC’s Cautious Approach
The SEC stated the need for additional time to deliberate on the fund conversion proposal and associated matters. The regulator is particularly concerned about market manipulation, liquidity, and investor protection. James Seyffart, a Bloomberg analyst, remarked: "As expected, the SEC has delayed the decision on Bitwise's application again."
Precedents and Implications
This isn't the first time the SEC has deferred similar decisions. It previously postponed verdicts on Ethereum spot ETFs by Bitwise and Grayscale. Subsequently, combination ETFs by Hashdex and Franklin Templeton were approved. Other companies like Osprey Funds are also facing hurdles in converting to ETFs due to regulatory delays.
The delay in Bitwise's application decision underscores the complexity and caution with which the SEC addresses crypto ETF issues due to numerous regulatory risks.
