TruthSocial, a social media platform operated by Trump Media & Technology Group (a company of US President Donald Trump), reported on May 19, 2026 that it has withdrawn its application to create a Spot Bitcoin Exchange Traded Fund (ETF).
The company has filed a petition with the U.S. Securities and Exchange Commission (SEC) to invalidate the Form S-1 registration statements for the Truth Social Bitcoin ETF and the Truth Social Bitcoin & Ethereum ETF, which were originally filed in June 2025.
The change in direction is based on the company’s belief that the Investment Company Act of 1940 (“Act 40”) “provides the optimal path forward” for the company’s financial planning, according to official documents. Yorkville America, Truth Social Fund’s sponsor and investment advisor, said the exit was aimed at “enabling increasingly innovative investment strategies.”
The original offer was structured pursuant to the Securities Act of 1933 (“Act 33”). While this 1933 regulatory framework has a narrow focus on overseeing how assets are issued and sold to the public for the first time, the 1940 regulations directly oversee the internal functioning and management of funds.
In this sense, the company asserted that “the 1940 Act provides a structure for delivering differentiated, rules-based investment strategies that the company continues to develop for its growing investor base.” According to the company, the regulatory changes will allow it to build a “more robust product platform” in the future.
Despite the technical justification provided by Trump’s office, the decision prompted a reaction from Bloomberg Intelligence analysts James Seifert and Eric Balciunas. Those who contradicted the organizational position and suggested that the real reason for the cancellation was commercial. And it’s not a regulation.
In Seifert’s opinion, the change has “more to do with the competitive environment for Bitcoin ETFs. In particular, the Bitcoin ETF managed by Morgan Stanley charges a fee of 14 basis points. As reported by CriptoNoticias, American bank Morgan Stanley launched the fund on May 8th with the lowest fees in the entire market, which has now enabled capital inflows of $232 million.”
Faced with this high-level competition scenario, Balciunas commented that the Trump Company’s ETF “either enters with interest rates below 14 basis points or forget about it, because no one will buy it and it could be embarrassing.” Analysts said the company’s board of directors: Prefers to put aside discussion of legal reasons before operating at a loss.
(Tag Translation)Bitcoin (BTC)
