Notice2025-09970
Self-Regulatory Organizations; NYSE Arca, Inc.; Order Instituting Proceedings To Determine Whether To Approve or Disapprove a Proposed Rule Change, as Modified by Amendment No. 2, To List and Trade Shares of the Grayscale Cardano Trust (ADA) Under NYSE Arca Rule 8.201-E, Commodity-Based Trust Shares
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
June 3, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 105 (Tuesday, June 3, 2025)</title>
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[Federal Register Volume 90, Number 105 (Tuesday, June 3, 2025)]
[Notices]
[Pages 23589-23590]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-09970]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-103138; File No. SR-NYSEARCA-2025-12]
Self-Regulatory Organizations; NYSE Arca, Inc.; Order Instituting
Proceedings To Determine Whether To Approve or Disapprove a Proposed
Rule Change, as Modified by Amendment No. 2, To List and Trade Shares
of the Grayscale Cardano Trust (ADA) Under NYSE Arca Rule 8.201-E,
Commodity-Based Trust Shares
May 28, 2025.
I. Introduction
On February 10, 2025, NYSE Arca, Inc. (``NYSE Arca'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission''), pursuant to Section 19(b)(1) of the Securities
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a
proposed rule change to list and trade shares (``Shares'') of the
Grayscale Cardano Trust (ADA) (``Trust'') under NYSE Arca Rule 8.201-E,
Commodity-Based Trust Shares. On February 20, 2025, the Exchange filed
Amendment No. 2 to the proposed rule change, which replaced and
superseded the original filing in its entirety.\3\ The proposed rule
change, as modified by Amendment No. 2, was published for comment in
the Federal Register on February 28, 2025.\4\
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ On February 19, 2025, the Exchange filed Amendment No. 1 to
the proposed rule change and on February 20, 2025, the Exchange
withdrew Amendment No. 1.
\4\ See Securities Exchange Act Release No. 102475 (Feb. 24,
2025), 90 FR 10964 (``Notice''). Comments received on the proposed
rule change are available at: <a href="https://www.sec.gov/comments/sr-nysearca-2025-12/srnysearca202512.htm">https://www.sec.gov/comments/sr-nysearca-2025-12/srnysearca202512.htm</a>.
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On March 11, 2025, pursuant to Section 19(b)(2) of the Act,\5\ the
Commission designated a longer period within which to approve the
proposed rule change, disapprove the proposed rule change, or institute
proceedings to determine whether to disapprove the proposed rule
change.\6\ This order institutes proceedings under Section 19(b)(2)(B)
of the Act \7\ to determine whether to approve or disapprove the
proposed rule change, as modified by Amendment No. 2.
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\5\ 15 U.S.C. 78s(b)(2).
\6\ See Securities Exchange Act Release No. 102591, 90 FR 12387
(Mar. 17, 2025). The Commission designated May 29, 2025, as the date
by which the Commission shall approve or disapprove, or institute
proceedings to determine whether to disapprove, the proposed rule
change, as modified by Amendment No. 2.
\7\ 15 U.S.C. 78s(b)(2)(B).
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II. Summary of the Proposal, as Modified by Amendment No. 2
As described in more detail in the Notice,\8\ the Exchange proposes
to list and trade the Shares of the Trust under NYSE Arca Rule 8.201-E,
which governs the listing and trading of Commodity-Based Trust Shares
on the Exchange.
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\8\ See Notice, supra note 4.
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According to the Exchange, the investment objective of the Trust is
for the value of the Shares to reflect the value of the Cardano
(``ADA'') held by the Trust,\9\ determined by reference to the ``Index
Price,'' less the Trust's expenses and other liabilities.\10\ The
``Index Price'' is the U.S. dollar value of a ADA derived from the
``Digital Asset Trading Platforms'' \11\ that are reflected in the
CoinDesk Cardano Price Index (ADX) (``Index''), calculated at 4:00
p.m., New York time, on each business day.\12\ The Trust's assets will
consist solely of ADA.\13\ The Trust will create and redeem Shares in
cash with authorized participants on an ongoing basis in one or more
blocks of 10,000 Shares.\14\
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\9\ The Exchange states that ADA is a digital asset that is
created and transmitted through the operations of the peer-to-peer
Cardano network, a decentralized network of computers that operates
on cryptographic protocols. See id. at 10966.
\10\ See id. at 10965. Grayscale Operating, LLC and Grayscale
Investments Sponsors, LLC are the sponsors of the Trust and are
indirect wholly owned subsidiaries of Digital Currency Group, Inc.
The Exchange states that as of May 3, 2025, Grayscale Operating, LLC
will cease to act as sponsor of the Trust and Grayscale Investment
Sponsors, LLC will be sole sponsor of the Trust.. Delaware Trust
Company is the trustee of the Trust and Coinbase Custody Trust
Company, LLC is the custodian for the Trust's ADA. See id. at 10964.
\11\ According to the Exchange, a ``Digital Asset Trading
Platform'' is an electronic marketplace where trading participants
may trade, buy and sell ADA based on bid-ask trading. See id. at
10965 n.12.
\12\ See id. at 10965 n.9. The index provider for the Trust is
CoinDesk Indices, Inc. See id. at 10964-65.
\13\ See id. at 10965.
\14\ See id. at 10975.
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III. Proceedings To Determine Whether To Approve or Disapprove SR-
NYSEARCA-2025-12 and Grounds for Disapproval Under Consideration
The Commission is instituting proceedings pursuant to Section
19(b)(2)(B) of the Act \15\ to determine whether the proposed rule
change, as modified by Amendment No. 2, should be approved or
disapproved. Institution of proceedings is appropriate at this time in
view of the legal and policy issues raised by the proposed rule change.
Institution of proceedings does not indicate that the Commission has
reached any conclusions with respect to any of the issues involved.
Rather, the Commission seeks and encourages interested persons to
provide comments on the proposed rule change.
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\15\ 15 U.S.C. 78s(b)(2)(B).
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Pursuant to Section 19(b)(2)(B) of the Act,\16\ the Commission is
providing notice of the grounds for disapproval under consideration.
The Commission is instituting proceedings to allow for additional
analysis of the proposed rule change's consistency with Section 6(b)(5)
of the Act, which requires, among other things, that the rules of a
national securities exchange be ``designed to prevent fraudulent and
manipulative acts and practices'' and ``to protect investors and the
public interest.'' \17\
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\16\ Id.
\17\ 15 U.S.C. 78f(b)(5).
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The Commission asks that commenters address the sufficiency of the
Exchange's statements in support of the proposal, which are set forth
in the Notice, in addition to any other comments they may wish to
submit about the proposed rule change. In particular, the Commission
seeks comment on whether the proposal to list and trade Shares of the
Trust, which would hold ADA, is designed to prevent fraudulent and
manipulative acts and practices or raises any new or novel concerns not
previously contemplated by the Commission.
IV. Procedure: Request for Written Comments
The Commission requests that interested persons provide written
[[Page 23590]]
submissions of their views, data, and arguments with respect to the
issues identified above, as well as any other concerns they may have
with the proposal. In particular, the Commission invites the written
views of interested persons concerning whether the proposal, as
modified by Amendment No. 2, is consistent with Section 6(b)(5) or any
other provision of the Act, and the rules and regulations thereunder.
Although there do not appear to be any issues relevant to approval or
disapproval that would be facilitated by an oral presentation of views,
data, and arguments, the Commission will consider, pursuant to Rule
19b-4, any request for an opportunity to make an oral presentation.\18\
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\18\ Section 19(b)(2) of the Act, as amended by the Securities
Acts Amendments of 1975, Pub. L. 94-29 (June 4, 1975), grants the
Commission flexibility to determine what type of proceeding--either
oral or notice and opportunity for written comments--is appropriate
for consideration of a particular proposal by a self-regulatory
organization. See Securities Acts Amendments of 1975, Senate Comm.
on Banking, Housing & Urban Affairs, S. Rep. No. 75, 94th Cong., 1st
Sess. 30 (1975).
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Interested persons are invited to submit written data, views, and
arguments regarding whether the proposed rule change, as modified by
Amendment No. 2, should be approved or disapproved by June 24, 2025.
Any person who wishes to file a rebuttal to any other person's
submission must file that rebuttal by July 8, 2025.
Comments may be submitted by any of the following methods:
Electronic Comments
<bullet> Use the Commission's internet comment form (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#5d2f283138703e3230303833292e1d2e383e733a322b"><span class="__cf_email__" data-cfemail="7e0c0b121b531d1113131b100a0d3e0d1b1d50191108">[email protected]</span></a>. Please include
file number SR-NYSEARCA-2025-12 on the subject line.
Paper Comments
<bullet> Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to file number SR-NYSEARCA-2025-12. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for website viewing and
printing in the Commission's Public Reference Room, 100 F Street NE,
Washington, DC 20549, on official business days between the hours of 10
a.m. and 3 p.m. Copies of the filing also will be available for
inspection and copying at the principal office of the Exchange. Do not
include personal identifiable information in submissions; you should
submit only information that you wish to make available publicly. We
may redact in part or withhold entirely from publication submitted
material that is obscene or subject to copyright protection. All
submissions should refer to file number SR-NYSEARCA-2025-12 and should
be submitted on or before June 24, 2025. Rebuttal comments should be
submitted by July 8, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
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\19\ 17 CFR 200.30-3(a)(57).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-09970 Filed 6-2-25; 8:45 am]
BILLING CODE 8011-01-P
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