In the future, this would allow – according to the company – to have “a more robust product platform.”
James Seyffart, an ETF specialist, believes the change has to do with the “competitive landscape.”
Truth Social, the social media platform managed by Trump Media & Technology Group (United States President Donald Trump’s company), reported on May 19, 2026 the withdrawal of its applications for the creation of spot bitcoin exchange-traded funds (ETFs).
The company solicitous before the United States Securities and Exchange Commission (SEC) to void the registration statement on Form S-1 for the Truth Social Bitcoin ETF and the Truth Social Bitcoin & Ethereum ETF, which had originally been filed in June 2025.
This reversal is based, according to official documents, on the firm’s conviction that the Investment Company Act of 1940 (“Act 40”) “represents the optimal path” for its financial plans. Yorkville America, sponsor and investment advisor of Truth Social funds, indicated that the withdrawal It aimed to “offer increasingly innovative investment strategies.”
The initial proposals had been structured in accordance with the Securities Act of 1933 (“Act 33”). While this 1933 regulatory framework focuses narrowly on overseeing how assets are issued and sold to the public for the first time, the 1940 regulations directly oversee the internal functioning and administration of the funds.
In this sense, the company argued that the “1940 Act provides a structure to offer the differentiated and rules-based investment strategies that the firm continues to develop for its growing investor base.” According to the corporate version, the regulatory change will allow them to structure “a more solid product platform” in the future.
Despite the technical justifications presented by Trump’s firm, the decision generated reaction from James Seyffart and Eric Balchunas, analysts at Bloomberg Intelligence, who contradict the institutional position and indicated that the true reasons for the cancellation are commercial and not regulatory.
Seyffart stated thatIn his opinion, the change “has more to do with the competitive landscape for bitcoin ETFs. Particularly with the bitcoin ETF managed by Morgan Stanley that charges a 14 basis point fee. As reported by CriptoNoticias, the American bank Morgan Stanley launched said fund on May 8 with the lowest commission in the entire market. This today allows you to have 232 million of dollars of capital inflows.
Given this scenario of high-level competition, Balchunas commented that the Trump company’s ETFs “either entered with a fee below 14 basis points or they had better forget about it, because no one would buy it, and it could be embarrassing.” The analyst suggested that the company’s board of directors preferred to step aside arguing legal reasons before operating at a loss.