The proposed ETF is the first tied to a US president's business interests, which raised many ethical concerns among lawmakers about potential conflicts of interest. Senators Elizabeth Warren and Jeff Merkley even flagged past Trump-affiliated crypto deals as possible corruption risks. The SEC also postponed decisions on other crypto funds, including Grayscale’s Solana Trust and Canary Capital’s Litecoin ETF.
SEC Slows Down Trump ETF Plan
The US Securities and Exchange Commission (SEC) postponed its decision on the Truth Social Bitcoin exchange-traded fund (ETF), which is backed by the Trump Media and Technology Group. This means the regulator extended the review deadline from Aug. 4 to Sept. 18.
(Source: SEC)
The ETF seeks approval to list on NYSE Arca under the SEC’s commodity-based trust share rules, joining a growing roster of digital asset funds under review. The SEC explained that the extension is to allow more time for evaluation, a common move given the agency's statutory ability to take up to 270 days to make a final determination on ETF applications.
The Truth Social Bitcoin ETF is unique for its ties to President Donald Trump, which makes it the first proposed crypto ETF connected to a sitting or former US president’s business interests. While no formal objections have been raised so far by the SEC, Trump’s increasing involvement in the crypto industry has caused some serious ethical concerns.
In particular, Democrats questioned whether Trump could benefit personally from regulatory decisions affecting crypto markets or firms affiliated with his ventures. This concern is amplified by previous deals involving Trump-linked companies like World Liberty Financial, Binance, and a UAE firm, which were flagged by Senators Elizabeth Warren and Jeff Merkley as potential channels for foreign corruption and conflicts of interest.
Markley and Warren questioning Trump’s crypto ties (Source: US Committee on Banking, Housing, and Urban Affairs)
The SEC also delayed decisions on Grayscale’s Solana Trust and Canary Capital’s proposed Litecoin ETF, and extended their deadlines to Oct. 10. Commissioner Hester Peirce, who is very well known for her pro-crypto views, recently urged market participants to stay patient, due to ongoing litigation and internal complexities. Despite this, the pace of current ETF decisions is still quick when compared to historical norms. In fact, it took over a decade for the SEC to approve the first spot Bitcoin ETF in January of 2024.
Trump has been highly active in crypto policy. On July 18, he signed the GENIUS Act into law, establishing the first comprehensive US regulatory framework for stablecoins. Weeks earlier, on June 25, his appointee to the Federal Housing Finance Administration, William J. Pulte, issued a directive that could allow Fannie Mae and Freddie Mac to treat unconverted crypto assets as eligible for mortgage underwriting.
