Trump-Backed Truth Social Withdraws Crypto ETF Plans
Joerg Hiller May 21, 2026 17:04
Yorkville America, Truth Social’s ETF partner, withdraws crypto ETF filings to shift toward regulated '40 Act products, citing strategy changes.
Yorkville America, the ETF issuer partnered with Donald Trump’s Truth Social, has withdrawn multiple crypto ETF filings, including the proposed Truth Social Bitcoin ETF. The move marks a strategic pivot toward products governed by the Investment Company Act of 1940 ('40 Act), which offers stricter investor protections and tax efficiencies compared to the Securities Act of 1933 ('33 Act) framework.
The firm confirmed on May 19, 2026, that it is exiting the '33 Act structure to focus on '40 Act funds, describing the shift as a means to deliver "differentiated, rules-based investment strategies" for its investor base. Products affected include the Truth Social Bitcoin & Ethereum ETF and the Truth Social Crypto Blue Chip ETF, both of which were withdrawn from SEC consideration. Notably, Yorkville has not indicated plans to pursue crypto ETFs under the '40 Act framework.
Yorkville America, also the investment adviser for the Trump Media & Technology Group (TMTG), has been an active player in "America First"-themed financial products. The firm's decision to pivot aligns with a broader strategy to expand its offerings under the '40 Act, which is generally favored for its streamlined regulatory process and suitability for institutional investors.
Market Context: Crypto ETFs Struggle in 2026
The withdrawal comes as demand for crypto ETFs has weakened in 2026 amid a broader market slowdown. Net inflows into U.S. spot Bitcoin ETFs have reached just $790 million year-to-date, a stark contrast to the $25 billion inflows seen in 2025. Spot Ether ETFs have fared even worse, with $640 million in net outflows this year. Altcoin ETFs have similarly failed to gain traction, reflecting a diminished appetite for new crypto-linked investment products.
Bloomberg ETF analyst James Seyffart suggested Yorkville’s decision may also be tied to increased competition in the Bitcoin ETF market. The Morgan Stanley Bitcoin Trust, launched earlier this year, has drawn significant investor interest with fees as low as 0.14%, potentially squeezing smaller players like Yorkville out of the market.
Strategic Implications for Yorkville
This strategic move follows a series of announcements by Yorkville and TMTG earlier this year, including the launch of Truth Social-branded Separately Managed Accounts (SMAs) and a proposed acquisition of the Point Bridge America First ETF (Ticker: MAGA). Shifting to the '40 Act framework allows Yorkville to enhance credibility with institutional investors, streamline regulatory approval processes, and potentially accelerate product rollouts. It also aligns with SEC Rule 6c-11, which modernized the U.S. ETF landscape by simplifying compliance requirements for '40 Act funds.
However, the decision could limit Yorkville’s ability to participate in the high-risk, high-reward crypto ETF space. While '40 Act products are synonymous with traditional mutual funds and diversified ETFs, they may not accommodate the speculative nature of single-asset crypto funds, which typically fall under the '33 Act umbrella.
Political and Regulatory Headwinds
The withdrawal also comes amid heightened scrutiny of Trump’s financial ties to the crypto industry. Since returning to the presidency in January 2025, Democratic lawmakers have raised concerns about potential conflicts of interest stemming from Trump Media’s involvement in digital asset ventures, including the World Liberty Financial crypto platform. These factors may have influenced Yorkville’s decision to dial back its high-profile crypto ETF plans.
For now, Yorkville America appears focused on repositioning itself within the regulated ETF space. Whether this pivot will allow the firm to maintain relevance in a fiercely competitive and evolving market remains to be seen.
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