Notice2025-13064
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing of Amendment No. 2 to Proposed Rule Change To Amend the Bitwise Bitcoin ETF Trust and the Bitwise Ethereum ETF in Order To Permit In-Kind Creations and Redemptions
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
July 14, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 132 (Monday, July 14, 2025)</title>
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[Federal Register Volume 90, Number 132 (Monday, July 14, 2025)]
[Notices]
[Pages 31390-31393]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-13064]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-103407; File No. SR-NYSEARCA-2025-38]
Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing
of Amendment No. 2 to Proposed Rule Change To Amend the Bitwise Bitcoin
ETF Trust and the Bitwise Ethereum ETF in Order To Permit In-Kind
Creations and Redemptions
July 9, 2025.
On May 21, 2025, NYSE Arca, Inc. (``NYSE Arca'' or the
``Exchange'') filed with the Securities and Exchange Commission (the
``Commission''), pursuant to Section 19(b)(1) \1\ of the Securities
Exchange Act of 1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ a
proposed rule change to amend the Bitwise Bitcoin ETF Trust and the
Bitwise Ethereum ETF to permit in-kind creations and redemptions. On
June 4, 2025, the Exchange filed Amendment No. 1 to the proposed rule
change, which replaced and superseded the original filing in its
entirety. The proposed rule change, as modified by Amendment No. 1 was
published in the Federal Register on June 11, 2025.\4\
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
\4\ See Securities Exchange Act Release No. 103198 (June 5,
2025), 90 FR 24683.
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On June 30, 2025, the Exchange filed Amendment No. 2 to the
proposed rule change, which is described in Items I and II below, which
Items have been prepared by the self-regulatory organization. Amendment
No. 2 replaces and supersedes the original filing, as amended by
Amendment No. 1, in its entirety. The Commission is publishing this
notice to solicit comments on the proposed rule change, as modified by
Amendment No. 2, from interested persons.
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend the Bitwise Bitcoin ETF Trust and
the Bitwise Ethereum ETF, shares of which have been approved by the
Commission to list and trade on the Exchange pursuant to Rule 8.201-E
(Commodity-Based Trust Shares), to permit in-kind creations and
redemptions. This Amendment No. 2 to SR-NYSEARCA-2025-38 replaces SR-
NYSEARCA-2025-38 and Amendment No. 1 thereto as originally filed and
supersedes such filings in their entirety. The proposed rule change is
available on the
[[Page 31391]]
Exchange's website at <a href="http://www.nyse.com">www.nyse.com</a>, at the principal office of the
Exchange, and at the Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
the places specified in Item III below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to amend the Bitwise Bitcoin ETF Trust (the
``Bitcoin Trust'') and the Bitwise Ethereum ETF (the ``ETH Trust'' and,
together with the Bitcoin Trust, the ``Trusts''), shares of which have
been approved by the Commission to list and trade on the Exchange
pursuant to Rule 8.201-E (Commodity-Based Trust Shares), to permit in-
kind creations and redemptions.
Background
The Commission approved the listing and trading of shares
(``Bitcoin Trust Shares'') of the Bitcoin Trust on the Exchange under
Rule 8.201-E (Commodity-Based Trust Shares) on January 10, 2024.\5\ The
Commission also approved the listing and trading of shares of the ETH
Trust (``ETH Trust Shares'') under Rule 8.201-E (Commodity-Based Trust
Shares) on May 23, 2024.\6\ The Bitcoin Approval Order and Ether
Approval Order provided only for cash creations and redemptions of
bitcoin and ether, respectively.
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\5\ See Securities Exchange Act Release No. 99306 (Jan. 10,
2024), 89 FR 3008 (Jan. 17, 2024) (SR-NYSEArca-2023-44) (Order
Granting Accelerated Approval of Proposed Rule Changes, as Modified
by Amendments Thereto, To List and Trade Bitcoin-Based Commodity-
Based Trust Shares and Trust Units) (the ``Bitcoin Approval
Order'').
\6\ See Securities Exchange Act Release No. 100224 (May 23,
2024), 89 FR 46937 (May 30, 2024) (SR-NYSEArca-2024-31) (Order
Granting Accelerated Approval of Proposed Rule Changes, as Modified
by Amendments Thereto, To List and Trade Shares of Ether-Based
Exchange Traded Products) (the ``Ether Approval Order'').
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Rule 8.201-E governs the listing and trading of Commodity-Based
Trust Shares. Commodity-Based Trust Shares are securities issued by a
trust that represent investors' discrete identifiable and undivided
beneficial ownership interest in the commodities deposited into the
trust. The Bitcoin Trust Shares are issued by the Bitcoin Trust, a
Delaware statutory trust, and the ETH Trust Shares are issued by the
ETH Trust, also a Delaware statutory trust.
Proposed Rule Change--Bitcoin Trust
The Exchange proposes to amend representations regarding the
Bitcoin Trust's creation and redemption process as set forth in its
previous rule filing to list and trade Bitcoin Trust Shares to provide
that the Bitcoin Trust may process creations and redemptions in either
cash or bitcoin and to describe the process by which the Bitcoin Trust
would conduct in-kind transfers of its bitcoin.\7\ The proposed in-kind
transfer process will be an alternative to the Bitcoin Trust's current
cash only creation and redemption process, which remains unchanged and
will continue to operate as provided in Amendment No. 2 to the Bitcoin
Trust Shares filing.
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\7\ See Securities Exchange Act Release No. 99294 (Jan. 8,
2024), 89 FR 2297 (Jan. 12, 2024) (SR-NYSEArca-2023-44) (Notice of
Filing of Amendment No. 2 to a Proposed Rule Change To List and
Trade Shares of the Bitwise Bitcoin ETF Under NYSE Arca Rule 8.201-E
(Commodity-Based Trust Shares) (``Amendment No. 2'').
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Except for the changes described below, all other representations
in Amendment No. 2 remain unchanged and will continue to constitute
continued listing requirements. In addition, the Bitcoin Trust will
continue to comply with the terms of Amendment No. 2 and the
requirements of Rule 8.201-E.
In connection with in-kind creations, the Authorized Participant
must submit a purchase order by an order cutoff time (the ``In-Kind
Order Cutoff Time'') to create Baskets of Bitcoin Trust Shares in
exchange for bitcoin. The In-Kind Order Cutoff Time will initially be
3:59 p.m. ET on the date a purchase order is received by the Transfer
Agent and approved by the Marketing Agent (the ``Purchase Order
Date'').
On the settlement date for an in-kind creation, the Bitcoin Trust
delivers Bitcoin Trust Shares to the Authorized Participant in exchange
for bitcoin received from the Authorized Participant or its designated
agent or client. The Authorized Participant or its designated agent or
client will deposit such bitcoin with Coinbase Custody Trust Company,
LLC (the ``Bitcoin Custodian''). In the event the Authorized
Participant has not deposited the bitcoin with the Bitcoin Custodian by
the applicable time on the settlement date of the in-kind purchase
order, the Authorized Participant will be given the option to (1)
cancel the in-kind purchase order, (2) delay settlement of the purchase
order to enable delivery of bitcoin at a later date, or (3) accept that
the Bitcoin Trust will execute a bitcoin transaction required for the
creation and the Authorized Participant and the Authorized Participant
will deliver the U.S. dollars required for the purchase order.
In connection with in-kind redemptions, the Authorized Participant
must submit an order by the In-Kind Order Cutoff Time to redeem Baskets
of Bitcoin Trust Shares in exchange for bitcoin. On the settlement date
for an in-kind redemption, the Bitcoin Trust delivers bitcoin to the
Authorized Participant in exchange for Bitcoin Trust Shares received
from the Authorized Participant or its designated agent or client. The
Authorized Participant or its designated agent or client will deposit
such Bitcoin Trust Shares to the Bitcoin Trust's DTC account.
In the event the Authorized Participant has not deposited the
Bitcoin Trust Shares to the Bitcoin Trust's DTC account by the
applicable time on the settlement date of the in-kind redemption order,
the Authorized Participant will be given the option to (1) cancel the
in-kind redemption order, (2) delay settlement of the redemption order
to enable delivery of Bitcoin Trust Shares at a later date, or (3)
accept that the Bitcoin Trust will execute a bitcoin transaction
required for the redemption order and the Authorized Participant will
be delivered the U.S. dollars required as calculated during the cash
redemption process.
Proposed Rule Change--ETH Trust
Similarly, the Exchange proposes to amend representations regarding
the ETH Trust's creation and redemption process as set forth in its
previous rule filing to list and trade ETH Trust Shares to allow for
in-kind transfers of the ETH Trust's ether.\8\ The proposed in-kind
transfer process will be an alternative to the ETH Trust's current cash
creation and redemption process, which remains unchanged and will
continue to operate
[[Page 31392]]
as provided in Amendment No. 1 to the ETH Trust Shares filing.
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\8\ See Securities Exchange Act Release No. 100213 (May 22,
2024), 89 FR 46533 (May 29, 2024) (SR-NYSEArca-2024-31) (Notice of
Filing of Amendment No. 1 to a Proposed Rule Change To List and
Trade Shares of the Bitwise Ethereum ETF) (``Amendment No. 1'').
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Except for the changes described below, all other representations
in Amendment No. 1 remain unchanged and will continue to constitute
continued listing requirements. In addition, the ETH Trust will
continue to comply with the terms of Amendment No. 1 and the
requirements in Rule 8.201-E.
In connection with in-kind creations, the Authorized Participant
must submit a purchase order by the In-Kind Order Cutoff Time to create
Baskets of ETH Trust Shares in exchange for ether. The In-Kind Order
Cutoff Time will initially be 3:59 p.m. ET on the Purchase Order Date.
On the settlement date for an in-kind creation, the ETH Trust
delivers ETH Trust Shares to the Authorized Participant in exchange for
ether received from the Authorized Participant or its designated agent
or client. The Authorized Participant or its designated agent or client
will deposit such ether with Coinbase Custody Trust Company, LLC (the
``Ether Custodian''). In the event the Authorized Participant has not
deposited the ether with the Ether Custodian by the applicable time on
the settlement date of the in-kind purchase order, the Authorized
Participant will be given the option to (1) cancel the in-kind purchase
order, (2) delay settlement of the purchase order to enable delivery of
ether at a later date, or (3) accept that the ETH Trust will execute a
ether transaction required for the creation and the Authorized
Participant and the Authorized Participant will deliver the U.S.
dollars required for the purchase order.
In connection with in-kind redemptions, the Authorized Participant
must submit an order by the In-Kind Order Cutoff Time to redeem Baskets
of ETH Trust Shares in exchange for ether. On the settlement date for
an in-kind redemption, the ETH Trust delivers ether to the Authorized
Participant in exchange for ETH Trust Shares received from the
Authorized Participant or its designated agent or client. The
Authorized Participant or its designated agent or client will deposit
such ETH Trust Shares to the ETH Trust's DTC account.
In the event the Authorized Participant has not deposited the ETH
Trust Shares to the ETH Trust's DTC account by the applicable time on
the settlement date of the in-kind redemption order, the Authorized
Participant will be given the option to (1) cancel the in-kind
redemption order, (2) delay settlement of the redemption order to
enable delivery of ETH Trust Shares at a later date, or (3) accept that
the ETH Trust will execute a ether transaction required for the
redemption order and the Authorized Participant will be delivered the
U.S. dollars required as calculated during the cash redemption process.
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
the Act and the rules and regulations thereunder applicable to the
Exchange and, in particular, the requirements of Section 6(b) \9\ of
the Act. Specifically, the Exchange believes the proposed rule change
is consistent with the Section 6(b)(5) \10\ requirements that the rules
of an exchange be designed to prevent fraudulent and manipulative acts
and practices, to promote just and equitable principles of trade, to
foster cooperation and coordination with persons engaged in regulating,
clearing, settling, processing information with respect to, and
facilitating transactions in securities, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general, to protect investors and the public interest.
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\9\ 15 U.S.C. 78f(b)(5).
\10\ 15 U.S.C. 78f(b)(5).
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The Exchange believes the proposed rule change is designed to
remove impediments to and perfect the mechanism of a free and open
market and, in general, to protect investors and the public interest
because it would update representations in both Amendment No. 2 to the
Bitcoin Trust Shares filing and Amendment No. 1 to the ETH Trust Shares
filing such that the respective Trusts would both be able to engage in
in-kind transactions with Authorized Participants, as described above.
This ability would make the Trusts (and the market more generally)
operate more efficiently because Authorized Participants would be able
to source bitcoin or ether, as applicable, rather than provide cash to
the applicable Trust and/or to receive bitcoin or ether, as applicable,
directly from the Trusts. In-kind creations and redemptions would allow
Authorized Participants to be responsible for buying and selling the
applicable crypto asset rather than the Trusts, which would potentially
lessen the impact on the market of the Trusts on both sides of the
transaction by allowing the Authorized Participants to decide how and
where to source the underlying crypto asset for creations and deciding
how, where, and whether to sell the underlying crypto asset for
redemptions. This would improve the creation and redemption process for
both Authorized Participants and the Trusts, increase efficiency, and
ultimately benefit the end investors in the Trusts.
As noted above, except for the addition of in-kind creation and
redemption for the Bitcoin Trust, all other representations made in
Amendment No. 2 to the Bitcoin Trust Shares filing remain unchanged and
will continue to constitute continuing listing requirements for the
Bitcoin Trust. Similarly, except for the addition of in-kind creation
and redemption for the ETH Trust, all other representations made in
Amendment No. 1 to the ETH Trust Shares filing remain unchanged and
will continue to constitute continuing listing requirements for the ETH
Trust.
Accordingly, the Exchange believes that this proposed rule change
raises no novel regulatory issues.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purpose of the Act. As discussed above, the
proposed amendments are intended to reflect changes to the Trusts'
creation and redemption processes, specifically to allow for in-kind
transfers.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change, as modified by Amendment No. 2, is consistent with the Act.
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#681a1d040d450b0705050d061c1b281b0d0b460f071e"><span class="__cf_email__" data-cfemail="e99b9c858cc48a8684848c879d9aa99a8c8ac78e869f">[email protected]</span></a>. Please include
file number SR-NYSEARCA-2025-38 on the subject line.
Paper Comments
<bullet> Send paper comments in triplicate to Secretary, Securities
and Exchange
[[Page 31393]]
Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to file number SR-NYSEARCA-2025-38. 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-2025-38 and should
be submitted on or before August 4, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\11\
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\11\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-13064 Filed 7-11-25; 8:45 am]
BILLING CODE 8011-01-P
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