The U.S. Securities and Exchange Commission (SEC) has delayed its decision regarding the approval of several cryptocurrency-related Exchange Traded Funds (ETFs), including the proposed Truth Social Bitcoin ETF. The decision, which was initially expected soon, has been pushed back to September 18, giving the SEC more time to evaluate the proposed rule changes and related issues.
This delay impacts the Truth Social Bitcoin ETF, which was filed in June by Trump Media & Technology Group, the company behind the Truth Social platform. If approved, this ETF would mark a significant entry into the crypto space for entities linked to former President Donald Trump. Trump has recently increased his involvement in digital assets, supporting a DeFi project called World Liberty Financial and attending events related to his namesake memecoin. The Truth Social Bitcoin ETF is not the only crypto fund facing delays. The SEC also postponed decisions on Grayscale's Solana Trust, with a new deadline of October 10, and Canary Capital's proposed Litecoin ETF. Additionally, VanEck's AVAX ETF is facing a possible further delay.
The Truth Social Bitcoin ETF aims to track the performance of five major tokens: Bitcoin, Ether, Solana, Cronos, and XRP. Bitcoin would constitute 70% of the portfolio, followed by 15% in Ether, 8% in Solana, 5% in Cronos, and 2% in XRP. Structured as a Nevada business trust, the ETF is being launched in partnership with Yorkville America Digital and plans to list on NYSE Arca. The ETF will issue and redeem shares in blocks of 10,000 through authorized broker-dealers, helping to keep the fund's market price aligned with its crypto holdings.
The SEC's decision to extend the review period reflects the complexities of assessing the potential impacts and compliance aspects of these offerings. The agency stated that the extension would allow sufficient time to consider the proposed rule change and the issues raised. Hester Peirce, an SEC commissioner known for her pro-crypto stance, has urged industry stakeholders to anticipate slower approvals, citing ongoing litigation and other considerations.
These delays are not unusual for the SEC, especially given the increase in ETF proposals since Trump's return to the White House in January. The new administration has adopted a more favorable stance toward digital assets, appointing Paul Atkins, a former SEC Commissioner known for his crypto-friendly views, to lead the agency. Trump has also pledged to make the U.S. "the crypto capital of the world".
The SEC's caution is evident, as it took over a decade from the first spot Bitcoin ETF application in 2013 to the eventual approval in January 2024. Since then, the 12 listed funds have attracted over $54 billion in inflows, making them some of the best-performing new ETFs on record. While Ethereum ETFs have also been approved, decisions on funds tied to altcoins like Solana and Dogecoin remain uncertain. The approval of a Bitcoin ETF by Truth Social would mark a notable intersection of political influence and financial innovation, given it is the first crypto fund linked to a sitting U.S. president's business ventures.
