Truth Social Withdraws Spot Bitcoin ETF Filing Amid Fee War

Yorkville America withdrew the S-1 registration for a Truth Social‑branded spot Bitcoin ETF on May 19, stating it will not pursue the public offering “at this time” and will concentrate product development on funds under the Investment Company Act of 1940, known as ’40 Act products.

The SEC’s withdrawal letter confirms Yorkville’s filing was voluntary. The SEC has informed investors that recent U.S. spot Bitcoin and Ethereum exchange‑traded products launched earlier this year are structured as ’33 Act commodity trusts rather than ’40 Act investment companies.

Market observers point to fee compression from low‑cost issuers as the main economic barrier for late entrants to plain‑vanilla spot Bitcoin ETFs. Morgan Stanley filed a proposed Bitcoin trust with a fee of 14 basis points (0.14%). BlackRock’s IBIT has a 25 basis point (0.25%) fee and reported about $62.65 billion in assets under management.

Basic revenue math used by industry participants highlights the scale needed to support low fees. At 14 basis points, an issuer would need roughly $7.1 billion in assets to generate $10 million in gross annual revenue. At 25 basis points, the same $10 million in revenue requires about $4 billion. A fund charging 95 basis points (0.95%) would need around $1.05 billion to reach $10 million in revenue.

Before planned acquisitions, Yorkville managed five Truth Social‑branded ETFs with combined assets under $50 million. A spot fund that simply holds Bitcoin through a custodian delivers the same return regardless of issuer branding, so competition for plain spot wrappers focuses on fees, liquidity and distribution networks.

Yorkville’s other pending filings indicate a shift toward differentiated ’40 Act crypto products. The proposed Crypto Blue Chip ETF would allocate about 70% to Bitcoin, 15% to Ethereum and the remainder to smaller tokens, with staking for eligible assets. Yorkville’s Cronos Yield Maximizer ETF and certain Bitcoin and Ethereum filings list total annual fund operating expenses near 0.95%.

Industry activity includes proposals that pair Bitcoin exposure with options‑based income or multi‑asset constructions. Such structures are presented as ways to justify higher fees than a plain spot wrapper.

Yorkville has identified broader distribution and investor protections under the ’40 Act as reasons for its product focus. The firm has not announced a timetable for refiling a spot Bitcoin product or for launching its ’40 Act funds. The withdrawal reallocates regulatory effort away from a plain spot Bitcoin ETF filing; future filings and capital or distribution arrangements will determine the firm’s next public offerings.