Abrupt Reversal: Former President's Company Drops Bid for Crypto Investment Product, Sparking Curiosity Over Motivations

Table of Contents Trump Media & Technology Group, the parent entity operating the Truth Social platform, has rescinded its filings for two cryptocurrency exchange-traded funds with the U.S. Securities and Exchange Commission. 🚨JUST IN: Trump's Truth Social has filed to withdraw its Bitcoin $BTC ETF application with the SEC. pic.twitter.com/R3L4qzz8HV — Coin Bureau (@coinbureau) May 20, 2026 The organization submitted withdrawal notices for both its Truth Social Bitcoin ETF and its Truth Social Bitcoin & Ethereum ETF. These applications were initially submitted in June 2025 utilizing Form S-1 under the Securities Act of 1933. According to the withdrawal documentation, the company explained it “has determined to withdraw the Registration Statement and not to pursue the public offering at this time.” The SEC had not approved either fund for launch. No investor shares were distributed for either proposed product. Yorkville America, serving as both sponsor and investment advisor for the planned funds, characterized the withdrawal as a deliberate strategic maneuver. The organization intends to resubmit applications under the Investment Company Act of 1940 (commonly referenced as the ’40 Act) instead of the ’33 Act framework initially selected. Steve Neamtz, who serves as president of Yorkville America, explained that the ’40 Act “allows us to bring more differentiated investment strategies to our investors that are not possible under the ’33 Act framework.” The ’40 Act establishes regulations for investment company structure and operations, whereas the ’33 Act primarily addresses initial public securities offerings. Yorkville maintains that the ’40 Act framework provides enhanced investor safeguards, superior tax advantages, and increased operational transparency. James Seyffart, a Bloomberg Research Analyst specializing in ETF markets, suggested an alternative explanation for the withdrawal. He highlighted the escalating fee competition within the U.S. spot Bitcoin ETF marketplace. Morgan Stanley introduced its Bitcoin ETF in recent weeks with an expense ratio of merely 14 basis points — establishing a new low among all U.S. Bitcoin ETF offerings. This competitively priced fund has captured over $230 million in investor capital, surpassing both Hashdex and WisdomTree’s Bitcoin funds in total assets under management. The SEC granted initial approval for spot Bitcoin ETFs in January 2024. Subsequently, these investment vehicles have collectively attracted more than $57.7 billion in total inflows. The application withdrawal occurred during the same week that U.S. spot Bitcoin ETFs experienced a dramatic reversal in institutional investment flows. On May 18, 2025, spot Bitcoin ETFs collectively registered $648.6 million in net capital outflows within a 24-hour period. BlackRock’s Bitcoin fund experienced the most substantial outflow, with $448.4 million departing the investment vehicle. Fidelity’s offering shed $63.4 million. ARK Invest’s Bitcoin ETF witnessed $109.6 million in redemptions. Bitwise, VanEck, Invesco, and Franklin Templeton similarly reported capital withdrawals on that date. WisdomTree and Valkyrie registered neither inflows nor outflows. Every significant Bitcoin ETF product documented either capital outflows or neutral activity on May 18.