The U.S. Securities and Exchange Commission (SEC) approved Bitwise’s plan to convert its crypto index fund (BITW) into a spot exchange-traded fund on Tuesday, then immediately pressed pause on the decision.

Federal prosecutors have closed a two-year investigation into Kraken founder Jesse Powell and returned dozens of electronic devices seized during a 2023 FBI raid.

Polymarket is returning to the U.S. after agreeing to buy QCX, a newly licensed derivatives exchange, for $112 million. The crypto-based prediction platform had been operating offshore since settling with the CFTC in 2022 over unregistered trading activity.

Top stories in the Crypto Roundup today:

• SEC Approves, Then Freezes Bitwise’s Crypto Index Fund ETF Conversion
• FBI Ends Probe of Kraken Founder Jesse Powell, Returns Seized Devices
• Polymarket to Reenter U.S. With $112M Deal for Regulated Exchange QCX

SEC Approves, Then Freezes Bitwise’s Crypto Index Fund ETF Conversion

The U.S. Securities and Exchange Commission (SEC) approved Bitwise’s plan to convert its crypto index fund (BITW) into a spot exchange-traded fund on Tuesday, then immediately pressed pause on the decision.

A similar pattern played out earlier this year with Grayscale’s multi-asset fund, which was also initially cleared before being halted.

BITW, launched in 2017, manages $1.68 billion and holds 90% of its assets in bitcoin and ether. The rest is spread across solana, XRP, cardano, avalanche, chainlink, bitcoin cash, uniswap and polkadot. 

It rebalances monthly and charges a 2.5% management fee, a figure that’s steep for ETFs but common in crypto-focused products.

FBI Ends Probe of Kraken Founder Jesse Powell, Returns Seized Devices

Federal prosecutors have closed a two-year investigation into Kraken founder Jesse Powell and returned dozens of electronic devices seized during a 2023 FBI raid.

The case centered on Powell’s dispute with Verge Center for the Arts, a Sacramento nonprofit he founded in 2008. The Justice Department had investigated claims Powell hacked or cyber-stalked the organization, but Powell says the conflict was over account access and internal power struggles, not criminal behavior.

In a statement, Powell said the raid was “devastating” and based on “baseless accusations.” He continues to pursue a civil defamation lawsuit against Verge board members and alleges they withheld evidence during discovery.

Powell’s attorney received a DOJ declination letter confirming the case is closed. The Justice Department declined to comment. Kraken, the exchange Powell founded, is expected to go public soon.

Polymarket to Reenter U.S. With $112M Deal for Regulated Exchange QCX

Polymarket is returning to the U.S. after agreeing to buy QCX, a newly licensed derivatives exchange, for $112 million. The crypto-based prediction platform had been operating offshore since settling with the CFTC in 2022 over unregistered trading activity.

The move follows the recent closure of investigations by both the CFTC and the Justice Department, clearing the way for Polymarket’s legal return. QCX received CFTC approval to operate on July 9.

Polymarket rose to prominence during the 2024 U.S. election, drawing millions in bets and public attention. With the acquisition, it will now compete with licensed rivals like Kalshi and Crypto.com.

The deal also coincides with a likely leadership change at the CFTC, as crypto-friendly Brian Quintenz awaits Senate confirmation to head the agency.

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