Trump Media & Technology Group’s social media platform, Truth Social, has officially withdrawn its applications for cryptocurrency exchange-traded funds (ETFs). The company submitted requests to the Securities and Exchange Commission (SEC) to withdraw its Form S-1 registration statements for the proposed Truth Social Bitcoin ETF and the Truth Social Bitcoin & Ethereum ETF, which were initially filed in June 2025.
Key Takeaways
- Truth Social has withdrawn its applications for spot Bitcoin and Bitcoin & Ethereum ETFs.
- The withdrawal is described as a strategic decision to pursue a more advantageous ETF structure.
- The company aims to leverage the Investment Company Act of 1940 (’40 Act) instead of the Securities Act of 1933 (’33 Act).
- This move occurs amidst a highly competitive spot Bitcoin ETF market in the U.S.
- The SEC has previously approved and overseen a significant number of spot Bitcoin ETF applications.
In a filing made public on Monday, the company stated its determination “to withdraw the Registration Statement and not to pursue the public offering at this time.” This action suggests a reevaluation of the strategy behind launching these crypto-linked investment products.
Yorkville America, identified as the sponsor and investment advisor for the planned Truth Social funds, issued a statement clarifying the rationale behind the withdrawal. Steve Neamtz, president of Yorkville America, indicated that the shift is intended to enable the development of more “differentiated investment strategies” that are better supported by the structure provided under the Investment Company Act of 1940 (’40 Act). He contrasted this with the framework of the Securities Act of 1933 (’33 Act), suggesting the former offers greater flexibility and benefits for investors.
The ’33 Act primarily governs the initial issuance and sale of securities to the public, establishing disclosure requirements. In contrast, the ’40 Act regulates investment companies, including mutual funds and ETFs, dictating their structure, operations, and governance. Yorkville America highlighted potential advantages of the ’40 Act framework, such as enhanced investor protections, improved accessibility, greater tax efficiency, and increased transparency compared to the ’33 Act approach for these specific offerings.
Regulatory Precedent and Market Dynamics
The decision by Truth Social to withdraw its ETF applications is taking place within a dynamic and increasingly competitive U.S. spot Bitcoin ETF market. James Seyffart, a Bloomberg Research Analyst, commented that the competitive landscape, particularly with the recent launch of Morgan Stanley’s Bitcoin ETF (MSBT) at a low fee of 14 basis points, may have influenced this strategic shift. MSBT has rapidly gained traction since its introduction, attracting substantial inflows and surpassing the net assets of established Bitcoin funds.
The SEC approved the first spot Bitcoin ETFs in the United States in January 2024. Since their inception, these approved funds have collectively garnered over $57.7 billion in inflows, marking one of the most successful ETF launch categories on record. Truth Social’s own ETF applications had encountered delays with the SEC prior to this withdrawal. The potential approval of such a fund would have aligned with other crypto-related ventures associated with former President Trump, including his engagement with memecoins and the DeFi project World Liberty Financial.
Original article : www.theblock.co