Notice2025-14033
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 WisdomTree Bitcoin Fund 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 35351-35353]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-14033]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-103527; File No. SR-CboeBZX-2025-033]
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 WisdomTree
Bitcoin Fund To Permit In-Kind Creations and Redemptions
July 22, 2025.
On February 20, 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 WisdomTree Bitcoin Fund 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. 102499 (Feb. 27,
2025), 90 FR 11340.
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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. 102857, 90 FR 16581
(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. 103165, 90 FR 24187
(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 WisdomTree
Bitcoin Fund (the ``Trust''), 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-2025-033 amends and replaces in
its entirety the proposal as originally submitted on February 20, 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\ Exchange
[[Page 35352]]
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, which was formed as a Delaware statutory trust on
December 17, 2020.
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\9\ See Securities Exchange Act Release Nos. 99292 (January 8,
2024) 89 FR 2429 (January 12, 2024) (SR-CboeBZX-2023-042) (Notice of
Filing of Amendment No. to a Proposed Rule Change To List and Trade
Shares of the WisdomTree Bitcoin Fund 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-
2023-042) (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'').
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The Exchange proposes to amend several portions of the Bitcoin ETP
Amendment No. 2 in order to permit in-kind creation and redemptions,
including permitting in-kind creations and redemptions by an affiliate
of the sponsor of the Trust.
Representations
The Bitcoin ETP Amendment No. 2 included specific representations
making clear that the Bitcoin Trust would only process creations and
redemptions in cash. Specifically, the ``WisdomTree Bitcoin Fund''
section of the Bitcoin ETP Amendment No. 2 states:
When the Trust sells 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''). 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, or facilitate the delivery of,
cash to the Trust's account with the Cash Custodian in exchange for
Shares when they purchase 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.
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.\10\
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\10\ See Bitcoin ETP Amendment No. 2 at 2437.
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The Exchange proposes to replace the above with the following:
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'') at the Trust's net asset value (``NAV'').
For cash creations and redemptions 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. For in-kind creation and redemptions authorized participants
will deliver, or 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 when they redeem Shares with the
Trust. An affiliate of the sponsor of the Trust may serve as an
authorized participant of 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.
The ``Investment Objective'' section of the Bitcoin ETP Amendment
No. 2 stated: ``The Trust will process all creations and redemptions in
cash transactions with authorized participants.'' \11\ The Exchange
proposes to replace this sentence with the following: ``The Trust will
process all creations and redemptions in cash or in-kind transactions
with authorized participants.''
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\11\ See Bitcoin ETP Amendment No. 2 at 2437.
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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\ See Bitcoin ETP Amendment No. 2 at 2438-2439.
\13\ See Bitcoin ETP Amendment No. 2 at 2439-2440.
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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. 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
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 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 with the Transfer Agent to
create one or more Creation Baskets. Purchase orders for creations
must be placed by 4:00 p.m. Eastern Time (or such earlier order cut-
off time as disclosed in the Prospectus), or the close of Regular
Trading Hours on the Exchange, whichever is earlier, or such earlier
time as disseminated by the Trust the prior day for the following
day's transactions (e.g., 11:00 a.m. Eastern Time). The day on which
an order properly is received by the Transfer Agent is considered
the purchase order date.
For a cash creation order, the total deposit of cash required to
create each Creation Basket includes the cash equivalent of an
amount of bitcoin that is in the same proportion to the total assets
of the Trust (net of accrued but unpaid Sponsor fees and any accrued
but unpaid extraordinary expenses and liabilities), the amount of
which is equal to the NAV per share multiplied by the number of
Shares in a creation Basket (5,000). The value of a purchase date
order is determined at NAV which is calculated based on 4:00 p.m.
Eastern Time bitcoin prices.
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 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. An affiliate of the sponsor of the Trust may serve
as an authorized participant of the Trust.
Except for the above changes, all other representations in the
Bitcoin ETP Amendment No. 2 remain unchanged and will continue to
constitute
[[Page 35353]]
continuing listing requirements. In addition, the Bitcoin Trust will
continue to comply with the terms of Bitcoin ETP Amendment No. 2 and
the Trust 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.\14\ Specifically, the Exchange believes the proposed rule change
is consistent with the Section 6(b)(5) \15\ 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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\14\ 15 U.S.C. 78f(b).
\15\ 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 the Bitcoin ETP Amendment
No. 2 such that the Trust would be able to engage in in-kind creation
and redemptions with authorized participants or their designees, as
described above. This ability would make the Trust (and the market more
generally) operate more efficiently because authorized participants
would be able to source bitcoin, as applicable, rather than to provide
cash to the applicable Trust and to receive bitcoin from the Trust.
This means that the authorized participant would be responsible for
buying and selling bitcoin rather than the Trust itself, which would
potentially lessen the impact on the market of the Trust on both sides
of the transaction by allowing the authorized participant to decide how
and where to source the bitcoin for creations and deciding how, where,
and whether to sell the bitcoin received for redemptions. This would
improve the creation and redemption process for both authorized
participants and the Trust, increase efficiency, and ultimately benefit
the end investors in the Trust.
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 remain
unchanged and will continue to constitute continuing listing
requirements for the Bitcoin 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 Trust 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#b7c5c2dbd29ad4d8dadad2d9c3c4f7c4d2d499d0d8c1"><span class="__cf_email__" data-cfemail="641611080149070b0909010a1017241701074a030b12">[email protected]</span></a>. Please include
file number SR-CboeBZX-2025-033 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-2025-033. 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-2025-033 and should be submitted
on or before August 15, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-14033 Filed 7-24-25; 8:45 am]
BILLING CODE 8011-01-P
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