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Notice2025-14031

Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing of a Proposed Rule Change, as Modified by Amendment No. 1, To Amend the Rule Governing the Listing and Trading of the Fidelity Wise Origin Bitcoin Fund and the Fidelity Ethereum Fund To Permit In-Kind Creations and Redemptions

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Published

July 25, 2025

Issuing agencies

Securities and Exchange Commission

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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 35355-35358]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-14031]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-103525; File No. SR-CboeBZX-2025-023]

Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of
Filing of a Proposed Rule Change, as Modified by Amendment No. 1, To
Amend the Rule Governing the Listing and Trading of the Fidelity Wise
Origin Bitcoin Fund and the Fidelity Ethereum Fund To Permit In-Kind
Creations and Redemptions

July 22, 2025.
On February 7, 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 Fidelity Wise Origin Bitcoin Fund and the
Fidelity Ethereum Fund under BZX Rule 14.11(e)(4). The proposed rule
change was published for comment in the Federal Register on February
25, 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. 102451 (Feb. 19,
2025), 90 FR 10664.
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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 22, 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 to
Section 19(b)(2) of the Act,\8\ 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, 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. 1, from interested persons.
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\4\ 15 U.S.C. 78s(b)(2).
\5\ See Securities Exchange Act Release No. 102595, 90 FR 12376
(Mar. 17, 2025) (designating May 26, 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. 103110, 90 FR 22804
(May 29, 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 Fidelity Wise
Origin Bitcoin Fund (the ``Bitcoin Trust'') and the Fidelity Ethereum
Fund (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. 1 to SR-CboeBZX-2025-023 amends and replaces in
its entirety the proposal as originally submitted on February 7,

[[Page 35356]]

2025. The Exchange submits this Amendment No. 1 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 March 17, 2021 and the Eth Trust was formed
as a Delaware statutory trust on October 31, 2023.
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\9\ See Securities Exchange Act Release Nos. 99290 (January 8,
2024) 89 FR 2338 (January 12, 2024) (SR-CboeBZX-2023-044) (Notice of
Filing of Amendment No. 3 to a Proposed Rule Change To List and
Trade Shares of the Wise Origin Bitcoin Fund Under BZX Rule
14.11(e)(4), Commodity-Based Trust Shares) (``Bitcoin ETP Amendment
No. 3''); 99306 (January 10, 2024) 89 FR 3008 (January 17, 2024)
(SR-CboeBZX-2023-044) (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'').
\10\ See Securities Exchange Act Release Nos. 100215 (May 22,
2024) 89 FR 46478 (May 29, 2024) (SR-CboeBZX-2023-095) (Notice of
Filing of Amendment No. 2 to a Proposed Rule Change to List and
Trade Shares of the Fidelity Ethereum Fund 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-
2023-095) (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'').
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Bitcoin Trust
The Exchange proposes to amend several portions of the Bitcoin ETP
Amendment No. 3 in order to permit in-kind creation and redemptions.
Representations
The Bitcoin ETP Amendment No. 3 included a specific representation
making clear that the Bitcoin Trust would only process creations and
redemptions in cash. Specifically, the ``Investment Objective'' section
of the Bitcoin ETP Amendment No. 3 stated:

\11\ Bitcoin ETP Amendment No. 3 at 2365.

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The Exchange proposes to replace the above with the following:

In seeking to achieve its investment objective, the Trust will
hold bitcoin, cash, and cash equivalents and will value its Shares
daily as of 4:00 p.m. Eastern time using the Index price to value
the bitcoin and process all creations and redemptions in cash or in-
kind transactions with authorized participants.
Creation and Redemption of Shares
Additionally, the ``Creation and Redemption of Shares'' section of
the filing includes a detailed description of how the cash-only
creation and redemption process works.\12\ 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''
\13\ and proposes to retain everything thereunder.
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\12\ Bitcoin ETP Amendment No. 3 at 2367.
\13\ See Bitcoin ETP Amendment No. 3 at 2367.
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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 or in kind, it will do so in blocks of 25,000 Shares (i.e., a
Creation Basket) based on the quantity of bitcoin attributable to
each Share of the Trust (net of accrued but unpaid expenses and
liabilities). For cash and in-kind creation orders, the
Administrator determines the amount of bitcoin represented by a
Creation Basket by dividing the total assets of the Trust, net of
accrued expenses and other liabilities as of the opening of business
on that business day, by the number of Shares outstanding at the
opening of business and multiplying such amount by the number of
Shares constituting a Creation Basket. Such determination is made as
of 4:00 p.m. EST on the purchase order date.
The authorized participants will deliver or cause to be
delivered cash or bitcoin to create Shares and the authorized
participant or its designee will receive cash or bitcoin when
redeeming Shares. The Trust will create Shares by receiving bitcoin
or cash from an authorized participant or its designee and will
redeem shares by delivering bitcoin or cash to an authorized
participant or its designee.
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 the close of
Regular Trading Hours on the Exchange or another time determined by
the Sponsor. The day on which an order is properly received is
considered the purchase order date.
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 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 designee will receive bitcoin for the
Shares delivered.
Eth Trust
Similarly, the Exchange proposes to amend several portions of the
Eth ETP Amendment No. 2 in order to permit in-kind creations and
redemptions.
Representations
The Eth ETP Amendment No. 2 included a specific representation
making clear that the Eth Trust would only process creations and
redemptions in cash. Specifically, the ``Investment Objective'' section
of the Eth ETP Amendment No. 2 stated:

In seeking to achieve its investment objective, the Trust will
hold ETH, cash, and cash equivalents and will value its Shares daily
as of 4:00 p.m. Eastern time using the Index price to value the
ether and process all creations and redemptions in transactions in
cash transactions with authorized participants. The Trust is not
actively managed.\14\
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\14\ See Eth ETP Amendment No. 2 at 46487.

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The Exchange proposes to replace the above with the following:

In seeking to achieve its investment objective, the Trust will
hold ETH, cash, and cash equivalents and will value its Shares daily
as of 4:00 p.m. Eastern time using the Index price to value the
ether and process all creations and redemptions in transactions in
cash or in-kind transactions with authorized participants. The Trust
is not actively managed.
Creation and Redemption of Shares
Additionally, the ``Creation and Redemption of Shares'' section of
the filing includes a detailed description of how the cash-only
creation and redemption process works.\15\ The Exchange proposes to
replace this

[[Page 35357]]

section as provided below. The Exchange proposes no change to the
subheading ``Rule 14.11(e)(4)--Commodity-Based Trust Shares'' \16\ and
proposes to retain everything thereunder.
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\15\ See Eth ETP Amendment No. 2 at 46488-46489.
\16\ See ETH ETP Amendment No. 2 at 46489.
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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 or in kind, it will do so in blocks of 25,000 Shares (i.e., a
Creation Basket) based on the quantity of ETH attributable to each
Share of the Trust (net of accrued but unpaid expenses and
liabilities). For cash and in-kind creation orders, the
Administrator determines the amount of ETH represented by a Creation
Basket by dividing the total assets of the Trust, net of accrued
expenses and other liabilities as of the opening of business on that
business day, by the number of Shares outstanding at the opening of
business and multiplying such amount by the number of Shares
constituting a Creation Basket. Such determination is made as of
4:00 p.m. EST on the purchase order date.
The authorized participants will deliver or cause to be
delivered cash or ether to create Shares and the authorized
participant or its designee will receive cash or ether when
redeeming Shares. The Trust will create Shares by receiving ether or
cash from an authorized participant or its designee and will redeem
Shares by delivering ether or cash to an authorized participant or
its designee.
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 the close of
Regular Trading Hours on the Exchange or another time determined by
the Sponsor. The day on which an order is properly received is
considered the purchase order date.
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 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 designee will receive ether for the
Shares delivered.
Conclusion
Except for the above changes, all other representations in the
Bitcoin ETP Amendment No. 3 and the Eth ETP Amendment No. 2 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. 3 and the Eth Trust will
continue to comply with the terms of Eth ETP Amendment No. 2 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.\17\ Specifically, the Exchange believes the proposed rule change
is consistent with the Section 6(b)(5) \18\ 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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\17\ 15 U.S.C. 78f(b).
\18\ 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. 3 and the Eth ETP Amendment No. 2 such that the Trusts
would both be able to engage in in-kind creation and redemptions with
authorized participants or their designees, 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 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. 3 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 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. 1, 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#abd9dec7ce86c8c4c6c6cec5dfd8ebd8cec885ccc4dd"><span class="__cf_email__" data-cfemail="e99b9c858cc48a8684848c879d9aa99a8c8ac78e869f">[email&#160;protected]</span></a>. Please include
file number SR-CboeBZX-2025-023 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-2025-023. 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

[[Page 35358]]

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-2025-023 and
should be submitted on or before August 15, 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)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-14031 Filed 7-24-25; 8:45 am]
BILLING CODE 8011-01-P

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