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Notice2025-14032

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 VanEck Bitcoin ETF and the VanEck Ethereum ETF 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 35348-35351]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-14032]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-103526; File No. SR-CboeBZX-2025-031]


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 VanEck Bitcoin 
ETF and the VanEck Ethereum ETF To Permit In-Kind Creations and 
Redemptions

July 22, 2025.
    On February 19, 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 VanEck Bitcoin Trust and the VanEck Ethereum 
Trust under BZX Rule 14.11(e)(4). The proposed rule change was 
published for comment in the Federal Register on March 5, 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. 102500 (Feb. 27, 
2025), 90 FR 11336.

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[[Page 35349]]

    On April 14, 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 June 2, 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. 102856, 90 FR 16579 
(Apr. 18, 2025) (designating June 3, 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. 103164, 90 FR 24171 
(June 6, 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 VanEck Bitcoin 
ETF (the ``Bitcoin Trust'') and the VanEck 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. 1 to SR-CboeBZX-2025-010 amends and replaces in 
its entirety the proposal as originally submitted on February 19, 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 \9\ on the Exchange 
pursuant to Exchange Rule 14.11(e)(4), Commodity-Based Trust Shares, on 
January 10, 2024.\10\ The Commission also approved the listing and 
trading of shares (the ``ETH ETP Shares'') of the ETH Trust \11\ on the 
Exchange pursuant to Exchange Rule 14.11(e)(4), Commodity-Based Trust 
Shares, on May 23, 2024.\12\ 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 December 17, 2020 and the ETH Trust was 
formed as a Delaware statutory trust on June 22, 2021.
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    \9\ The Exchange notes that the name of the Bitcoin Trust 
changed from the ``VanEck Bitcoin Trust'' to the ``VanEck Bitcoin 
ETF''.
    \10\ See Securities Exchange Act Release Nos. 99289 (January 8, 
2024) 89 FR 2413 (January 12, 2024) (SR-CboeBZX-2023-040) (Notice of 
Filing of Amendment No. 2 to a Proposed Rule Change To List and 
Trade Shares of the VanEck Bitcoin Trust Under BZX Rule 14.11(e)(4), 
Commodity-Based Trust Shares) (``Bitcoin ETP Amendment No. 2''); 
99306 (January 10, 2024) 89 FR 3008 (January 17, 2024) (SR-CboeBZX-
2023-040) (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''). The Bitcoin ETP Amendment No. 2 was 
later amended to change the creation unit size from 50,000 shares to 
25,000 shares. See Securities Exchange Act No. 99724 (March 12, 
2024) 89 FR 19379 (March 18, 2024) (SR-CboeBZX-2024-022) (Notice of 
Filing and Immediate Effectiveness of a Proposed Rule Change To 
Amend the Creation Basket Size of the VanEck Bitcoin Trust) (the 
``Subsequent Bitcoin ETP Amendment'').
    \11\ The Exchange notes that the name of the ETH Trust changed 
from the ``VanEck Ethereum Trust'' to the ``VanEck Ethereum ETF''.
    \12\ See Securities Exchange Act Release Nos. 100214 (May 22, 
2024) 89 FR 46462 (May 29, 2024) (SR-CboeBZX-2023-069) (Notice of 
Filing of Amendment No. 2 to a Proposed Rule Change to List and 
Trade Shares of the VanEck Ethereum Trust 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-
2023-069) (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 the Bitcoin ETP Amendment No. 2, as 
amended by the Subsequent Bitcoin ETP Amendment, in order to permit in-
kind creation and redemptions as follows.

    When the Bitcoin Trust creates or redeems its Shares, it will do 
so in cash or in-kind. In connection with cash creations and cash 
redemptions, the authorized participants will submit orders to 
create or redeem Baskets of Shares in exchange for cash. When the 
Bitcoin Trust creates or redeems its Shares in cash or in-kind, it 
will do so in transactions in blocks of 25,000 Shares (``Creation 
Basket'') that are based on the quantity of bitcoin attributable to 
each Share of the Bitcoin Trust (e.g., a Creation Basket).
    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 Bitcoin 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 
4:00 p.m. or the close of regular trading on the Exchange, whichever 
is earlier. The day on which an order is properly received is 
considered the purchase order date.
    For a cash creation order, the total deposit of cash required is 
an amount of cash sufficient to purchase amount of bitcoin 
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

[[Page 35350]]

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 Bitcoin Trust, adjusted 
for the amount of bitcoin constituting estimated accrued but unpaid 
fees and expenses of the Bitcoin 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 will deliver Shares to the Bitcoin Trust and will 
receive cash for the Shares delivered. For an in-kind redemption 
order, an authorized participant will deliver Shares to the Bitcoin 
Trust and the authorized participant or its designee will receive 
bitcoin for the Shares delivered.
ETH Trust
    Similarly, the Exchange proposes to amend the ETH ETP Amendment No. 
2 in order to permit in-kind creations and redemptions as follows.

    When the ETH Trust creates or redeems its Shares, it will do so 
in cash or in-kind. In connection with cash creations and cash 
redemptions, the authorized participants will submit orders to 
create or redeem Baskets of Shares in exchange for cash. When the 
ETH Trust creates or redeems its Shares in cash, it will do so in 
transactions in blocks of 25,000 Shares (``Creation Basket'') that 
are based on the quantity of ether attributable to each Share of the 
ETH Trust (e.g., a Creation Basket). When the ETH 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 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 ETH 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 
4:00 p.m. or the close of regular trading on the Exchange, whichever 
is earlier. The day on which an order is properly received is 
considered the purchase order date.
    For a cash creation order, the total deposit of cash required is 
based on the combined NAV of the number of Shares included in the 
Creation Baskets being created determined as of 4:00 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 Basket 
applicable to the date the order to purchase is properly received 
The Administrator determines the quantity of ETH used to calculate 
the a Creation Basket for a given day by dividing the number of ETH 
held by the ETH Trust, adjusted for the amount of ETH constituting 
estimated accrued but unpaid fees and expenses of the ETH 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 will deliver Shares to the ETH Trust and will receive 
cash for the Shares delivered. For an in-kind redemption order, an 
authorized participant will deliver Shares to the ETH 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. 2, as amended, 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. 2, as amended, 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.\13\ Specifically, the Exchange believes the proposed rule change 
is consistent with the Section 6(b)(5) \14\ 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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    \13\ 15 U.S.C. 78f(b).
    \14\ 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. 2, as amended, 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. 2, 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 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.

[[Page 35351]]

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#4c3e392029612f2321212922383f0c3f292f622b233a"><span class="__cf_email__" data-cfemail="c5b7b0a9a0e8a6aaa8a8a0abb1b685b6a0a6eba2aab3">[email&#160;protected]</span></a>. Please include 
file number SR-CboeBZX-2025-031 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-2025-031. 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-2025-031 and should be submitted 
on or before August 15, 2025.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-14032 Filed 7-24-25; 8:45 am]
BILLING CODE 8011-01-P


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