Notice2025-14030
Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing of a Proposed Rule Change, as Modified by Amendment No. 3, To Amend the Rule Governing the Listing and Trading of the ARK 21Shares Bitcoin ETF and the 21Shares Core Ethereum ETF 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 25, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 141 (Friday, July 25, 2025)</title>
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[Federal Register Volume 90, Number 141 (Friday, July 25, 2025)]
[Notices]
[Pages 35331-35335]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-14030]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-103524; File No. SR-CboeBZX-2025-010]
Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of
Filing of a Proposed Rule Change, as Modified by Amendment No. 3, To
Amend the Rule Governing the Listing and Trading of the ARK 21Shares
Bitcoin ETF and the 21Shares Core Ethereum ETF To Permit In-Kind
Creations and Redemptions
July 22, 2025.
On January 27, 2025, Cboe BZX Exchange, Inc. (the ``Exchange'' or
``BZX'') filed with the Securities and Exchange Commission (``SEC'' or
``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 amend the rules governing the listing and
trading of shares of the ARK 21Shares Bitcoin ETF and the 21Shares Core
Ethereum ETF under BZX Rule 14.11(e)(4). On February 5, 2025, the
Exchange filed Amendment No. 1 to the proposed rule change, which
replaced and superseded the original filing in its entirety. On
February 7, 2025, the Exchange filed Amendment No. 2 to the proposed
change, which replaced and superseded the proposed rule change, as
modified by Amendment No. 1, in its entirety. The proposed rule change,
as modified by Amendment No. 2, was published for comment in the
Federal Register on February 14, 2025.\3\
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 102381 (Feb. 10,
2025), 90 FR 9648.
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On March 11, 2025, pursuant to Section 19(b)(2) of the Act,\4\ 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.\5\ On May 14, 2025, the Commission instituted proceedings under
Section 19(b)(2)(B) of the Act,\6\ to determine whether to approve or
disapprove the proposed rule change.\7\ On July 21, 2025, pursuant
[[Page 35332]]
to Section 19(b)(2) of the Act,\8\ the Exchange filed Amendment No. 3
to the proposed rule change, which replaced and superseded the original
filing, as modified by Amendment No. 2, in its entirety. The proposed
rule change, as modified by Amendment No. 3, is described in Items I
and II below, which Items have been substantially prepared by the
Exchange. The Commission is publishing this notice to solicit comments
on the proposed rule change, as modified by Amendment No. 3, from
interested persons.
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\4\ 15 U.S.C. 78s(b)(2).
\5\ See Securities Exchange Act Release No. 102609, 90 FR 12409
(Mar. 17, 2025) (designating May 15, 2025, as the date by which the
Commission shall either approve, disapprove, or institute
proceedings to determine whether to disapprove the proposed rule
change).
\6\ 15 U.S.C. 78s(b)(2)(B).
\7\ See Securities Exchange Act Release No. 103044, 90 FR 21531
(May 20, 2025).
\8\ 15 U.S.C. 78s(b)(2).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Cboe BZX Exchange, Inc. (``BZX'' or the ``Exchange'') is filing
with the Securities and Exchange Commission (``Commission'' or ``SEC'')
a proposed rule change to amend the rule governing the ARK 21Shares
Bitcoin ETF (the ``Bitcoin Trust'') and the 21Shares Core Ethereum ETF
(the ``ETH Trust'' and, collectively with the Bitcoin Trust, the
``Trusts''), shares of which have been approved by the Commission to
list and trade on the Exchange pursuant to BZX Rule 14.11(e)(4), to
permit in-kind creations and redemptions.
The text of the proposed rule change is also available on the
Exchange's website (<a href="http://markets.cboe.com/us/equities/regulation/rule_filings/bzx/">http://markets.cboe.com/us/equities/regulation/rule_filings/bzx/</a>) and at the Exchange's Office of the Secretary.
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 Exchange 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 these 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 aspects of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
This Amendment No. 3 to SR-CboeBZX-2025-010 amends and replaces in
its entirety the proposal as originally submitted on January 27, 2025,
and as amended by Amendment No. 1 on February 5, 2025 and Amendment No.
2 on February 7, 2025. The Exchange submits this Amendment No. 3 in
order to clarify certain points and add additional details to the
proposal.
The Commission approved the listing and trading of shares (the
``Bitcoin ETP Shares'') of the Bitcoin Trust on the Exchange pursuant
to Exchange Rule 14.11(e)(4), Commodity-Based Trust Shares, on January
10, 2024.\9\ The Commission also approved the listing and trading of
shares (the ``ETH ETP Shares'') of the ETH Trust on the Exchange
pursuant to Exchange Rule 14.11(e)(4), Commodity-Based Trust Shares, on
May 23, 2024.\10\ Exchange Rule 14.11(e)(4) governs the listing and
trading of Commodity-Based Trust Shares, which means a security (a)
that is issued by a trust that holds (1) a specified commodity
deposited with the trust, or (2) a specified commodity and, in addition
to such specified commodity, cash; (b) that is issued by such trust in
a specified aggregate minimum number in return for a deposit of a
quantity of the underlying commodity and/or cash; and (c) that, when
aggregated in the same specified minimum number, may be redeemed at a
holder's request by such trust which will deliver to the redeeming
holder the quantity of the underlying commodity and/or cash. The
Bitcoin ETP Shares are issued by the Bitcoin Trust and the ETH ETP
Shares are issued by the ETH Trust. The Bitcoin Trust was formed as a
Delaware statutory trust on June 22, 2021 and the ETH Trust was formed
as a Delaware statutory trust on September 5, 2023.
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\9\ See Securities Exchange Act Release Nos. 99288 (January 8,
2024) 89 FR 2387 (January 12, 2024) (SR-CboeBZX-2023-028) (Notice of
Filing of Amendment No. 5 to a Proposed Rule Change To List and
Trade Shares of the ARK 21Shares Bitcoin ETF Under BZX Rule
14.11(e)(4), Commodity-Based Trust Shares) (``Bitcoin ETP Amendment
No. 5''); 99306 (January 10, 2024) 89 FR 3008 (January 17, 2024)
(SR-CboeBZX-2023-028) (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 ETP Approval Order''). On September 12, 2024,
the Exchange amended the Bitcoin ETP Amendment No. 5 to add two new
custodians to the Bitcoin Trust. See Securities Exchange Act Release
No. 101080 (September 18, 2024) 89 FR 77910 (September 24, 2024)
(Notice of Filing and Immediate Effectiveness of a Proposed Rule
Change To Amend the ARK 21Shares Bitcoin ETF and the 21Shares Core
Ethereum ETF To Add Two New Custodians to Each Trust) (the
``Custodian Amendment'').
\10\ See Securities Exchange Act Release Nos. 100216 (May 22,
2024) 89 FR 46514 (May 29, 2024) (SR-CboeBZX-2023-070) (Notice of
Filing of Amendment No. 2 to a Proposed Rule Change to List and
Trade Shares of the ARK 21Shares Ethereum ETF Under BZX Rule
14.11(e)(4), Commodity-Based Trust Shares) (``ETH ETP Amendment No.
2''); 100224 (May 23, 2024) 89 FR 46937 (May 30, 2024) (SR-CboeBZX-
2023-070) (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 ``ETH ETP Approval
Order''). The ETH Trust was originally named the ARK 21Shares
Ethereum ETF, as reflected in the ETH ETP Approval Order. However,
the Exchange later submitted an amendment, in part, to rename the
ETH Trust to the 21Shares Core Ethereum ETF. See Securities Exchange
Act Release No. 100306 (June 10, 2024) 89 FR 50656 (June 14, 2024)
(SR-CboeBZX-2024-050) (Notice of Filing and Immediate Effectiveness
of a Proposed Rule Change To Amend the ARK 21Shares Ethereum ETF To
Amend the Trust Name and Reflect That the Trust Will No Longer Have
a Sub-Adviser) (the ``Trust Name and Sub-Adviser Amendment''). The
Custodian Amendment also added two new custodians to the ETH Trust
in addition to the Bitcoin Trust.
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Bitcoin Trust
The Exchange proposes to amend several portions of the Bitcoin ETP
Amendment No. 5, as amended by the Custodian Amendment, in order to
permit in-kind creations and redemptions.
Representations
The Bitcoin ETP Amendment No. 5 included specific representations
making clear that the Bitcoin Trust would only process creations and
redemptions in cash. Specifically, Bitcoin ETP Amendment No. 5 stated:
``The Trust will process all creations and redemptions in cash
transactions with authorized participants.'' \11\ The Exchange proposes
to replace this representation to state: ``The Trust will process all
creations and redemptions in cash or in-kind transactions with
authorized participants (or their designated agents).''
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\11\ See Bitcoin ETP Amendment No. 5 at 2407.
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The Bitcoin ETP Amendment No. 5 also stated:
When the Trust creates or redeems its Shares, it will do so in
cash transactions in blocks of 5,000 Shares (a ``Creation Basket'')
at the Trust's net asset value (``NAV''). Authorized participants
will deliver, or facilitate the delivery of, cash to the Trust's
account with the Cash Custodian, in exchange for Shares when they
create Shares, and the Trust, through the Cash Custodian, will
deliver cash to such authorized participants when they redeem Shares
with the Trust. Authorized participants may then offer Shares to the
public at prices that depend on various factors, including the
supply and demand for Shares, the value of the Trust's assets, and
market conditions at the time of a transaction.\12\
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\12\ See Bitcoin ETP Amendment No. 5 at 2406.
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The Exchange proposes to replace the above paragraph as follows:
When the Trust creates or redeems its Shares, it will do so in
cash transactions or in-kind transactions in blocks of 5,000 Shares
(a ``Creation Basket''). For cash creations and redemptions,
authorized participants will
[[Page 35333]]
deliver, or facilitate the delivery of, cash to the Trust's account
with the Cash Custodian, in exchange for Shares when they create
Shares, and the Trust, through the Cash Custodian, will deliver cash
to such authorized participants when they redeem Shares with the
Trust. For in-kind creation and redemptions, authorized participants
will deliver, or through their designated agents, facilitate
delivery of, bitcoin to the Trust's account with the Custodian, in
exchange for Shares when they create Shares, and the Trust, through
the Custodian, will deliver bitcoin to such authorized participants,
or their designated agents, when they redeem Shares with the Trust.
Authorized participants may then offer Shares to the public at
prices that depend on various factors, including the supply and
demand for Shares, the value of the Trust's assets, and market
conditions at the time of a transaction. Shareholders who buy or
sell Shares during the day from their broker may do so at a premium
or discount relative to the NAV of the Shares of the Trust.
Creation and Redemption of Shares
The Bitcoin ETP Amendment No. 5 included the ``Creation and
Redemption of Shares'' section.\13\ The Exchange proposes to replace
this section as provided below. The Exchange proposes no change to the
subheading ``Rule 14.11(e)(4)--Commodity-Based Trust Shares'' \14\ and
proposes to retain everything thereunder.
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\13\ See Bitcoin ETP Amendment No. 5 at 2408-2409.
\14\ See Bitcoin ETP Amendment No. 5 at 2409.
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Creation and Redemption of Shares
When the Trust creates or redeems its Shares, it will do so in
cash or in-kind. When the Trust creates or redeems its Shares in
cash, it will do so in transactions in blocks of 5,000 Shares that
are based on the quantity of bitcoin attributable to each Share of
the Trust (e.g., a Creation Basket). When the Trust creates or
redeems its Shares in-kind, it will do so in transfers of bitcoin
that are based on the quantity of bitcoin attributable to the
Creation Basket being created or redeemed.
The authorized participants will deliver (or will have their
designated agents deliver) cash or bitcoin to create Shares and will
receive (or will have their designated agents receive) cash or
bitcoin when redeeming Shares. The Trust will create Shares by
receiving bitcoin or cash from an authorized participant (or its
designated agent) and will redeem Shares by delivering bitcoin or
cash to an authorized participant (or its designated agent).
According to the Registration Statement, on any business day, an
authorized participant may place an order to create one or more
Creation Baskets. Purchase orders must be placed by 12:00 p.m.
Eastern Time, the close of regular trading on the Exchange, or
another time determined by the Sponsor.\15\ The day on which an
order is properly received is considered the purchase order
date.\16\
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\15\ The time requirement for purchase orders will be publicized
by the Sponsor.
\16\ The order date is the trade date.
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For a cash creation order, the total deposit of cash required is
an amount of cash sufficient to purchase such amount of bitcoin, the
amount of which is equal to the combined NAV of the number of Shares
included in the Creation Baskets being created determined as of 4:00
p.m. ET on the date the order to purchase is properly received.
For a creation order in-kind, the total in-kind transfer of
bitcoin is based on the quantity of bitcoin attributable to the
Creation Baskets applicable to the date the order to purchase is
properly received. The Administrator determines the quantity of
bitcoin used to calculate the Creation Basket for a given day by
dividing the number of bitcoin held by the Trust, adjusted for the
amount of bitcoin constituting estimated accrued but unpaid fees and
expenses of the Trust as of the opening of business on that business
day, by the quotient of the number of Shares outstanding at the
opening of business divided by the number of Shares in a Creation
Basket.
The procedures by which an authorized participant can redeem one
or more Creation Baskets mirror the procedures for the creation of
Creation Baskets. For a cash redemption order, an authorized
participant (or its designated agent) will deliver Shares to the
Trust and will receive cash for the Shares delivered. For an in-kind
redemption order, an authorized participant will deliver Shares to
the Trust and the authorized participant (or its designated agent)
will receive bitcoin for the Shares delivered.
Trust's Transfer Agent Will Instruct Disposition of Trust's Bitcoin
The Bitcoin ETP Amendment No. 5 subsection entitled ``Trust's
Transfer Agent Will Instruct Disposition of Trust's Bitcoin'' includes
the following:
In such cases, a third party will use cash to buy and deliver
bitcoin to create Shares or withdraw and sell bitcoin for cash to
redeem Shares, on behalf of the Trust. Authorized participants will
deliver cash to the Trust's account with the Cash Custodian in
exchange for Shares of the Trust, and the Trust, through the Cash
Custodian, will deliver cash to authorized participants when those
authorized participants redeem Shares of the Trust.\17\
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\17\ See Bitcoin ETP Amendment No. 5 at 2407.
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The Exchange proposes to replace the above with the following:
For a cash creation order, an authorized participant will
deliver cash to create Shares. For an in-kind creation order, an
authorized participant or its designated agent will deliver bitcoin
to create Shares. In the event the authorized participant, or its
designated agent, has not deposited the bitcoin to the Trust by the
applicable time on the settlement date of the in-kind creation
order, the authorized participant will be given the option to (1)
cancel the in-kind creation order, (2) delay settlement of the order
to enable delivery of bitcoin at a later date, or (3) accept that
the Trust will execute a bitcoin transaction required for the
creation and the authorized participant will deliver the U.S.
dollars required for this purchase. The authorized participant is
responsible for the dollar cost of the difference between the
bitcoin price utilized in calculating NAV per Share on trade date
and the price at which the Trust acquires the bitcoin to the extent
the price realized in buying the bitcoin is higher than the bitcoin
price utilized in the NAV. To the extent the price realized in
buying the bitcoin is lower than the price utilized in the NAV, the
authorized participant shall get to keep the dollar impact of any
such difference. For a cash redemption order, an authorized
participant will deliver Shares to the Trust and will receive cash
for the Shares delivered. For an in-kind redemption order, an
authorized participant will deliver Shares to the Trust and will
receive bitcoin or will have its designated agent receive bitcoin
for the Shares delivered.
ETH Trust
Similarly, the Exchange proposes to amend several portions of ETH
ETP Amendment No. 2, as amended by the Custodian Amendment and the
Trust Name and Sub-Adviser Amendment, in order to permit in-kind
creations and redemptions.
Representations
First, ETH ETP Amendment No. 2 included specific representations
making clear that the Ether Trust would only process creations and
redemptions in cash. Specifically, ETH ETP Amendment No. 2 stated:
When the Trust creates or redeems its Shares, it will do so in
cash transactions in blocks of 10,000 Shares (a ``Creation Basket'')
at the Trust's net asset value (``NAV''). Authorized participants
will deliver, or facilitate the delivery of, cash to the Trust's
account with the Cash Custodian in exchange for Shares when they
create Shares, and the Trust, through the Cash Custodian, will
deliver cash to such authorized participants when they redeem Shares
with the Trust.\18\ Authorized participants may then offer Shares to
the public at prices that depend on various factors, including the
supply and demand for Shares, the value of the Trust's assets, and
market conditions at the time of a transaction.
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\18\ See ETH ETP Amendment No. 2 at 46520.
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The Exchange proposes to replace the above as follows:
When the Trust creates or redeems its Shares in cash
transactions, it will do so in blocks of 10,000 Shares (a ``Creation
Basket''). Authorized participants (or their designated agents) will
deliver cash to the Trust's account with the Cash Custodian in
exchange for Shares when they create Shares, and the Trust, through
the Cash Custodian, will deliver cash to such authorized
participants when they redeem Shares with the Trust. When the Trust
creates or redeems
[[Page 35334]]
its Shares in-kind, it will do so in Creation Units in exchange for
ether. Authorized participants will deliver or will have their
designated agents deliver ether to the Trust's account with the
Custodian, in exchange for Shares when they create Shares, and the
Trust, through the Custodian, will deliver ether to such authorized
participants when they redeem Shares with the Trust. Authorized
participants may then offer Shares to the public at prices that
depend on various factors, including the supply and demand for
Shares, the value of the Trust's assets, and market conditions at
the time of a transaction. Shareholders who buy or sell Shares
during the day from their broker may do so at a premium or discount
relative to the NAV of the Shares of the Trust.
ETH ETP Amendment No. 2 also states: ``The Trust will process all
creations and redemptions in cash transactions with authorized
participants.'' \19\ The Exchange proposes to replace this
representation to state that the ``Trust will process all creations and
redemptions in cash or in-kind transactions with authorized
participants (or their designated agents).''
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\19\ See ETH ETP Amendment No. 2 at 46521.
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Creation and Redemption of Shares
The ETH ETP Amendment No. 2 includes the ``Creation and Redemption
of Shares'' section.\20\ The Exchange proposes to replace this section
as provided below. The Exchange proposes no change to the subheading
``Rule 14.11(e)(4)--Commodity-Based Trust Shares'' \21\ and proposes to
retain everything thereunder.
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\20\ See ETH ETP Amendment No. 2 at 46522-46523.
\21\ See ETH ETP Amendment No. 2 at 46523.
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Creation and Redemption of Shares
When the Trust creates or redeems its Shares, it will do so in
cash or in-kind. When the Trust creates or redeems its Shares in
cash, it will do so in transactions in blocks of 10,000 Shares that
are based on the quantity of ETH attributable to each Share of the
Trust (e.g., a Creation Basket). When the Trust creates or redeems
its Shares in-kind, it will do so in transfers of ether that are
based on the quantity of ether attributable to the Creation Basket
being created or redeemed.
The authorized participants will deliver (or will have their
designated agents deliver) cash or ether to create Shares and will
receive (or will have their designated agents receive) cash or ether
when redeeming Shares. The Trust will create Shares by receiving
ether or cash from an authorized participant (or its designated
agent) and will redeem Shares by delivering ether or cash to an
authorized participant (or its designated agent).
According to the Registration Statement, on any business day, an
authorized participant may place an order to create one or more
Creation Baskets. Purchase orders must be placed by 12:00 p.m.
Eastern Time, the close of regular trading on the Exchange, or
another time determined by the Sponsor.\22\ The day on which an
order is properly received is considered the purchase order
date.\23\
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\22\ The time requirement for purchase orders will be publicized
by the Sponsor.
\23\ The order date is the trade date.
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For a cash creation order, the total deposit of cash required is
an amount of cash sufficient to purchase such amount of ETH, the
amount of which is equal to the combined NAV of the number of Shares
included in the Creation Baskets being created determined as of 4:00
p.m. ET on the date the order to purchase is properly received.
For a creation order in-kind, the total in-kind transfer of ETH
is based on the quantity of ETH attributable to the Creation Baskets
applicable to the date the order to purchase is properly received.
The Administrator determines the quantity of ETH used to calculate
the Creation Basket for a given day by dividing the number of ETH
held by the Trust, adjusted for the amount of ETH constituting
estimated accrued but unpaid fees and expenses of the Trust as of
the opening of business on that business day, by the quotient of the
number of Shares outstanding at the opening of business divided by
the number of Shares in a Creation Basket.
The procedures by which an authorized participant can redeem one
or more Creation Baskets mirror the procedures for the creation of
Creation Baskets. For a cash redemption order, an authorized
participant (or its designated agent) will deliver Shares to the
Trust and will receive cash for the Shares delivered. For an in-kind
redemption order, an authorized participant will deliver Shares to
the Trust and will receive (or will have its designated agent
receive) ether for the Shares delivered.
Trust's Transfer Agent Will Instruct Disposition of Trust's Ether
The ETH ETP Amendment No. 2 subsection entitled ``Trust's Transfer
Agent Will Instruct Disposition of Trust's Ether'' includes the
following:
In such cases, a third party will use cash to buy and deliver
ether to create Shares or withdraw and sell ether for cash to redeem
Shares, on behalf of the Trust. Authorized participants will deliver
cash to the Trust's account with the Cash Custodian in exchange for
Shares of the Trust, and the Trust, through the Cash Custodian, will
deliver cash to authorized participants when those authorized
participants redeem Shares of the Trust.\24\
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\24\ See ETH ETP Amendment No. 2 at 46520.
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The Exchange proposes to replace the above with the following:
For a cash creation order, an authorized participant will
deliver cash to create Shares. For an in-kind creation order, an
authorized participant or its designated agent will deliver ether to
create Shares. In the event the authorized participant, or its
designated agent, has not deposited the ether to the Trust by the
applicable time on the settlement date of the in-kind creation
order, the authorized participant will be given the option to (1)
cancel the in-kind creation order, (2) delay settlement of the order
to enable delivery of ether at a later date, or (3) accept that the
Trust will execute an ether transaction required for the creation
and the authorized participant will deliver the U.S. dollars
required for this purchase. The authorized participant is
responsible for the dollar cost of the difference between the ether
price utilized in calculating NAV per Share on trade date and the
price at which the Trust acquires the ether to the extent the price
realized in buying the ether is higher than the ether price utilized
in the NAV. To the extent the price realized in buying the ether is
lower than the price utilized in the NAV, the authorized participant
shall get to keep the dollar impact of any such difference. For a
cash redemption order, an authorized participant will deliver Shares
to the Trust and will receive cash for the Shares delivered. For an
in-kind redemption order, an authorized participant will deliver
Shares to the Trust and will receive ether or will have its
designated agent receive ether for the Shares delivered.
Conclusion
Except for the above changes, all other representations in the
Bitcoin ETP Amendment No. 5, as amended by the Custodian Amendment, and
ETH ETP Amendment No. 2, as amended by the Custodian Amendment and the
Trust Name and Sub-Adviser Amendment, remain unchanged and will
continue to constitute continuing listing requirements. In addition,
the Bitcoin Trust will continue to comply with the terms of Bitcoin ETP
Amendment No. 5, as amended, and the ETH Trust will continue to comply
with the terms of ETH ETP Amendment No. 2, as amended, and the Trusts
will continue to comply with the requirements of Rule 14.11(e)(4).
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) of the
Act.\25\ Specifically, the Exchange believes the proposed rule change
is consistent with the Section 6(b)(5) \26\ 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
[[Page 35335]]
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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\25\ 15 U.S.C. 78f(b).
\26\ 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 the Bitcoin ETP
Amendment No. 5, as amended, and the ETH ETP Amendment No. 2, as
amended, such that the Trusts would both be able to engage in in-kind
creations and redemptions with authorized participants (or their
designated agents), 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 to provide cash to the applicable Trust and to
receive bitcoin or ether directly from the Trusts. This means that the
authorized participant would be responsible for buying and selling the
applicable crypto asset rather than the Trust itself, which would
potentially lessen the impact on the market of the Trusts on both sides
of the transaction by allowing the authorized participant 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
received 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.
Except for the addition of in-kind creation and redemption for the
Bitcoin Trust as specifically set forth herein, all other
representations made in the Bitcoin ETP Amendment No. 5, as amended,
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 as specifically
set forth herein, all other representations made in the ETH ETP
Amendment No. 2, as amended, remain unchanged, and will continue to
constitute continuing listing requirements for the ETH Trust.
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 purposes of the Act. As noted above, the proposed
amendment is intended to allow the Trusts to operate more efficiently
by allowing for in-kind creation and redemption. The Exchange believes
these changes will not impose any burden on competition.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The Exchange neither solicited nor received comments on 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. 3, 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#8af8ffe6efa7e9e5e7e7efe4fef9caf9efe9a4ede5fc"><span class="__cf_email__" data-cfemail="abd9dec7ce86c8c4c6c6cec5dfd8ebd8cec885ccc4dd">[email protected]</span></a>. Please include
file number SR-CboeBZX-2025-010 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-CboeBZX-2025-010. 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 filing 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-CboeBZX-2025-010 and should be submitted
on or before August 15, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\27\
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\27\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-14030 Filed 7-24-25; 8:45 am]
BILLING CODE 8011-01-P
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</html>Indexed from Federal Register on July 25, 2025.
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