Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing of a Proposed Rule Change To Permit In-Kind Creations and Redemptions by the VanEck Bitcoin Trust and the VanEck Ethereum Trust, 11336-11339 [2025-03511]

Download as PDF 11336 Federal Register / Vol. 90, No. 42 / Wednesday, March 5, 2025 / Notices proposal for immediate effectiveness pursuant to Section 19(b)(3)(A) of the Act 3 and Rule 19b–4(f) thereunder.4 The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange is filing with the Commission a proposed rule change to establish a new section (D. Market Data Fees) in the LTSE Fee Schedule for proprietary market data feeds, Depth of Book, Top of Book and Last Sale (each an ‘‘Exchange Data Feed’’ and collectively, the ‘‘Exchange Data Feeds’’) and adopt fees for the Depth of Book and Top of Book Feeds, effective February 14, 2025. The proposed rule change, including the Exchange’s statement of the purpose of, and statutory basis for, the proposed rule change, is available on the Exchange’s website at https://ltse.com/ regulation/rule-filings, and on the Commission’s website at https:// www.sec.gov/rules-regulations/selfregulatory-organization-rulemaking/ national-securities-exchanges?file_ number=SR-LTSE-2025-02. II. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act.5 Comments may be submitted electronically by using the Commission’s internet comment form (https://www.sec.gov/rules-regulations/ self-regulatory-organizationrulemaking/national-securities3 15 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f). At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission will institute proceedings to determine whether the proposed rule change should be approved or disapproved. 5 Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for website viewing and printing in the Commission’s Public Reference Room, 100 F Street NE, Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. khammond on DSK9W7S144PROD with NOTICES 4 17 VerDate Sep<11>2014 16:51 Mar 04, 2025 Jkt 265001 exchanges?file_number=SR-LTSE-202502) or by sending an email to rulecomments@sec.gov. Please include file number SR–LTSE–2025–02 on the subject line. Alternatively, paper comments may be sent to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549–1090. All submissions should refer to file number SR–LTSE–2025–02. 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 (https://www.sec.gov/rules-regulations/ self-regulatory-organizationrulemaking/national-securitiesexchanges?file_number=SR-LTSE-202502). 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–LTSE–2025–02 and should be submitted on or before March 26, 2025. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.6 Sherry R. Haywood, Assistant Secretary. [FR Doc. 2025–03509 Filed 3–4–25; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–102500; File No. SR– CboeBZX–2025–031] Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing of a Proposed Rule Change To Permit InKind Creations and Redemptions by the VanEck Bitcoin Trust and the VanEck Ethereum Trust February 27, 2025. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on February 19, 2025, Cboe BZX Exchange, Inc. (the ‘‘Exchange’’ or ‘‘BZX’’) filed with the Securities and Exchange Commission (the ‘‘Commission’’) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. The Commission is publishing this notice to 6 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 PO 00000 Frm 00088 Fmt 4703 Sfmt 4703 solicit comments on the proposed rule change from interested persons. 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 VanEck Bitcoin Trust (the ‘‘Bitcoin Trust’’) and the VanEck Ethereum Trust (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 (https://markets.cboe.com/us/ equities/regulation/rule_filings/bzx/), at the Exchange’s Office of the Secretary, and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the 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 IV 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 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, 2024.3 The 3 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 E:\FR\FM\05MRN1.SGM 05MRN1 Federal Register / Vol. 90, No. 42 / Wednesday, March 5, 2025 / Notices 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, 2024.4 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. Bitcoin Trust The Exchange proposes to amend several portions of the Bitcoin ETP Amendment No. 2, as amended, in order to permit in-kind creation and redemptions. Representations The Bitcoin ETP Amendment No. 2, as amended, included specific representations making clear that the Bitcoin Trust would only process creations and redemptions in cash. Specifically, ‘‘VanEck Bitcoin Trust’’ section of the Bitcoin ETP Amendment No. 2, as amended, stated: 5 khammond on DSK9W7S144PROD with NOTICES When the Trust sells or redeems its Shares, it will do so in cash transactions in blocks of [25,000] Shares (a ‘‘Creation Basket’’) at 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). 4 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), CommodityBased 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’’). 5 See Bitcoin ETP Amendment No. 2 at 2422. VerDate Sep<11>2014 16:51 Mar 04, 2025 Jkt 265001 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. For creations, authorized participants will deliver cash to the Trust’s account with the Cash Custodian in exchange for Shares. Upon receipt of an approved creation order, the Sponsor, on behalf of the Trust, will submit an order to buy the amount of bitcoin represented by a Creation Basket. Based off bitcoin executions, the Cash Custodian will request the required cash from the authorized participant; the Transfer Agent will only issue ETF shares when the authorized participant has made delivery of the cash. Following receipt by the Cash Custodian of the cash from an authorized participant, the Sponsor, on behalf of the Trust, will approve an order with one or more previously onboarded trading partners to purchase the amount of bitcoin represented by the Creation Basket. This purchase of bitcoin will normally be cleared through an affiliate of the Custodian (although the purchase may also occur directly with the trading partner) and the bitcoin will settle directly into the Trust’s account at the Custodian.6 The Exchange proposes to replace the above paragraph with the following: When the Trust sells or redeems its Shares, it will do so in cash or in-kind transactions in blocks of 25,000 Shares (a ‘‘Creation Basket’’) at the Trust’s net asset value (‘‘NAV’’). For cash creations, 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. For cash creations, authorized participants will deliver cash to the Trust’s account with the Cash Custodian in exchange for Shares. 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. Additionally, the ‘‘Investment Objective’’ section of the Bitcoin ETP Amendment No. 2 stated: ‘‘In seeking to achieve its investment objective, the Trust will hold bitcoin and will value its Shares daily based on the reported Benchmark and process all creations and redemptions in cash transactions 6 For redemptions, the process will occur in the reverse order. Upon receipt of an approved redemption order, the Sponsor, on behalf of the Trust, will submit an order to sell the amount of bitcoin represented by a Creation Basket and the cash proceeds will be remitted to the authorized participant when the [25,000] Shares are received by the Transfer Agent. PO 00000 Frm 00089 Fmt 4703 Sfmt 4703 11337 with authorized participants.’’ 7 The Exchange proposes to replace this language with the following: ‘‘In seeking to achieve its investment objective, the Trust will hold bitcoin and will value its Shares daily based on the reported Benchmark 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.8 The Exchange proposes to replace this section as follows: 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 25,000 Shares that are based on the quantity of bitcoin attributable to each Share of the Trust (e.g., a Creation Basket) at the Trust’s NAV. When the Trust creates or redeems its Shares in kind, it will do so in transfers of bitcoin in blocks of 25,000 Shares 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. 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 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 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 inkind transfer of bitcoin is based on the quantity of bitcoin attributable to the Creation Baskets being created determined as of 4:00 p.m. ET on the date the order to purchase is properly received. The Administrator determines the quantity of bitcoin used to calculate the Creation 7 See Bitcoin ETP Amendment No. 2 at 2423. ETP Amendment No. 2 at 2423–2424. 8 Bitcoin E:\FR\FM\05MRN1.SGM 05MRN1 11338 Federal Register / Vol. 90, No. 42 / Wednesday, March 5, 2025 / Notices Basket for a given day by dividing the number of bitcoin held by the Trust as of the opening of business on that business day, 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 creation order, an authorized participant will deliver cash to create Shares. For an in-kind creation order, an authorized participant or its designee will deliver bitcoin to create Shares. 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 inkind creations and redemptions. khammond on DSK9W7S144PROD with NOTICES 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 ‘‘VanEck Ethereum Trust’’ section of the Eth ETP Amendment No. 2 stated: 9 When the Trust sells or redeems its Shares, it will do so in cash transactions in blocks of 25,000 Shares (a ‘‘Creation Basket’’) at the Trust’s net asset value (‘‘NAV’’). For creations, authorized participants will deliver cash to the Trust’s account with the Cash Custodian in exchange for Shares. Upon receipt of an approved creation order, the Sponsor, on behalf of the Trust, will submit an order to buy the amount of ether represented by a Creation Basket. Based off ether executions, the Cash Custodian will request the required cash from the authorized participant; the Transfer Agent will only issue Shares when the authorized participant has made delivery of the cash. Following receipt by the Cash Custodian of the cash from an authorized participant, the Sponsor, on behalf of the Trust, will approve an order with one or more previously onboarded trading partners to purchase the amount of ether represented by the Creation Basket. This purchase of ether will normally be cleared through an affiliate of the Custodian (although the purchase may also occur directly with the trading partner) and the ether will settle directly into the Trust’s account at the Custodian.10 9 See Eth ETP Amendment No. 2 at 46469. redemptions, the process will occur in the reverse order. Upon receipt of an approved 10 For VerDate Sep<11>2014 16:51 Mar 04, 2025 Jkt 265001 The Exchange proposes to replace this language with the following: When the Trust creates or redeems its Shares in cash transactions, it will do so in blocks of 25,000 Shares (a ‘‘Creation Basket’’) at the Trust’s net asset value (‘‘NAV’’). For cash creations or 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. When the Trust creates or redeems its Shares in-kind, it will do so in Creation Units in exchange for ether. Authorized participants will deliver, or facilitate delivery of, 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. Additionally, the ‘‘Investment Objective’’ section of the Eth ETP Amendment No. 2 stated: ‘‘In seeking to achieve its investment objective, the Trust will hold ether and will value its Shares daily based on the reported Benchmark (as discussed below) and process all creations and redemptions in cash transactions with authorized participants.’’ 11 The Exchange proposes to replace this language 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 based on the reported Benchmark (as discussed below) and process all creations and redemptions in transactions 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 follows: 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 25,000 Shares that are based on the quantity of ether attributable to each Share of the Trust (e.g., redemption order, the Sponsor, on behalf of the Trust, will submit an order to sell the amount of ether represented by a Creation Basket and the cash proceeds will be remitted to the authorized participant when the 25,000 Shares are received by the Transfer Agent. 11 Id. 12 See Eth ETP Amendment No. 2 at 46471. PO 00000 Frm 00090 Fmt 4703 Sfmt 4703 a Creation Basket) at the Trust’s NAV. When the Trust creates or redeems its Shares inkind, it will do so in transfers of ether in blocks of 25,000 Shares 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 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. 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 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 such amount of ether, the amount of which is based on 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 inkind transfer of ether is based on the quantity of ether attributable to the Creation Baskets being created determined as of 4:00 p.m. ET on the date the order to purchase is properly received. The Administrator determines the quantity of ether used to calculate the Creation Basket for a given day by dividing the number of ether held by the Trust as of the opening of business on that business day, adjusted for the amount of ether 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 creation order, an authorized participant will deliver cash to create Shares. For an in-kind creation order, an authorized participant or its designee will deliver ether to create Shares. 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. 2, as amended, and the Eth ETP Amendment No. 2 remain unchanged and will continue to constitute continuing listing E:\FR\FM\05MRN1.SGM 05MRN1 Federal Register / Vol. 90, No. 42 / Wednesday, March 5, 2025 / Notices 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). khammond on DSK9W7S144PROD with NOTICES 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. 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 13 15 U.S.C. 78f(b). 14 15 U.S.C. 78f(b)(5). VerDate Sep<11>2014 16:51 Mar 04, 2025 Jkt 265001 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 inkind 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. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 45 days of the date of publication of this notice in the Federal Register or within such longer period up to 90 days (i) as the Commission may designate if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the Exchange consents, the Commission will: A. by order approve or disapprove such proposed rule change, or B. institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. PO 00000 Frm 00091 Fmt 4703 Sfmt 4703 11339 Comments may be submitted by any of the following methods: Electronic Comments • Use the Commission’s internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rule-comments@ sec.gov. Please include file number SR– CboeBZX–2025–031 on the subject line. Paper Comments • 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 (https://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for website viewing and printing in the Commission’s Public Reference Room, 100 F Street NE, Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the Exchange. Do not include personal identifiable information in submissions; you should submit only information that you wish to make available publicly. We may redact in part or withhold entirely from publication submitted material that is obscene or subject to copyright protection. All submissions should refer to file number SR–CboeBZX–2025–031 and should be submitted on or before March 26, 2025. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.15 Sherry R. Haywood, Assistant Secretary. [FR Doc. 2025–03511 Filed 3–4–25; 8:45 am] BILLING CODE 8011–01–P 15 17 E:\FR\FM\05MRN1.SGM CFR 200.30–3(a)(12). 05MRN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 90, Number 42 (Wednesday, March 5, 2025)]
[Notices]
[Pages 11336-11339]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-03511]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-102500; File No. SR-CboeBZX-2025-031]


Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of 
Filing of a Proposed Rule Change To Permit In-Kind Creations and 
Redemptions by the VanEck Bitcoin Trust and the VanEck Ethereum Trust

February 27, 2025.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given 
that on February 19, 2025, Cboe BZX Exchange, Inc. (the ``Exchange'' or 
``BZX'') filed with the Securities and Exchange Commission (the 
``Commission'') the proposed rule change as described in Items I, II, 
and III below, which Items have been prepared by the Exchange. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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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 VanEck Bitcoin Trust (the ``Bitcoin 
Trust'') and the VanEck Ethereum Trust (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 (https://markets.cboe.com/us/equities/regulation/rule_filings/bzx/), at the Exchange's Office of the Secretary, and at 
the Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, the 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 IV 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
    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.\3\ The

[[Page 11337]]

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.\4\ 
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.
---------------------------------------------------------------------------

    \3\ 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).
    \4\ 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'').
---------------------------------------------------------------------------

Bitcoin Trust
    The Exchange proposes to amend several portions of the Bitcoin ETP 
Amendment No. 2, as amended, in order to permit in-kind creation and 
redemptions.
Representations
    The Bitcoin ETP Amendment No. 2, as amended, included specific 
representations making clear that the Bitcoin Trust would only process 
creations and redemptions in cash. Specifically, ``VanEck Bitcoin 
Trust'' section of the Bitcoin ETP Amendment No. 2, as amended, stated: 
\5\
---------------------------------------------------------------------------

    \5\ See Bitcoin ETP Amendment No. 2 at 2422.

    When the Trust sells or redeems its Shares, it will do so in 
cash transactions in blocks of [25,000] 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. For creations, authorized participants will deliver cash 
to the Trust's account with the Cash Custodian in exchange for 
Shares. Upon receipt of an approved creation order, the Sponsor, on 
behalf of the Trust, will submit an order to buy the amount of 
bitcoin represented by a Creation Basket. Based off bitcoin 
executions, the Cash Custodian will request the required cash from 
the authorized participant; the Transfer Agent will only issue ETF 
shares when the authorized participant has made delivery of the 
cash. Following receipt by the Cash Custodian of the cash from an 
authorized participant, the Sponsor, on behalf of the Trust, will 
approve an order with one or more previously onboarded trading 
partners to purchase the amount of bitcoin represented by the 
Creation Basket. This purchase of bitcoin will normally be cleared 
through an affiliate of the Custodian (although the purchase may 
also occur directly with the trading partner) and the bitcoin will 
settle directly into the Trust's account at the Custodian.\6\
---------------------------------------------------------------------------

    \6\ For redemptions, the process will occur in the reverse 
order. Upon receipt of an approved redemption order, the Sponsor, on 
behalf of the Trust, will submit an order to sell the amount of 
bitcoin represented by a Creation Basket and the cash proceeds will 
be remitted to the authorized participant when the [25,000] Shares 
are received by the Transfer Agent.

    The Exchange proposes to replace the above paragraph with the 
---------------------------------------------------------------------------
following:

    When the Trust sells or redeems its Shares, it will do so in 
cash or in-kind transactions in blocks of 25,000 Shares (a 
``Creation Basket'') at the Trust's net asset value (``NAV''). For 
cash creations, 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. For cash creations, 
authorized participants will deliver cash to the Trust's account 
with the Cash Custodian in exchange for Shares. 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.

    Additionally, the ``Investment Objective'' section of the Bitcoin 
ETP Amendment No. 2 stated: ``In seeking to achieve its investment 
objective, the Trust will hold bitcoin and will value its Shares daily 
based on the reported Benchmark and process all creations and 
redemptions in cash transactions with authorized participants.'' \7\ 
The Exchange proposes to replace this language with the following: ``In 
seeking to achieve its investment objective, the Trust will hold 
bitcoin and will value its Shares daily based on the reported Benchmark 
and process all creations and redemptions in cash or in-kind 
transactions with authorized participants.''
---------------------------------------------------------------------------

    \7\ See Bitcoin ETP Amendment No. 2 at 2423.
---------------------------------------------------------------------------

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.\8\ The Exchange proposes to 
replace this section as follows:
---------------------------------------------------------------------------

    \8\ Bitcoin ETP Amendment No. 2 at 2423-2424.
---------------------------------------------------------------------------

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 25,000 Shares that are based on the 
quantity of bitcoin attributable to each Share of the Trust (e.g., a 
Creation Basket) at the Trust's NAV. When the Trust creates or 
redeems its Shares in kind, it will do so in transfers of bitcoin in 
blocks of 25,000 Shares 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.
    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 
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 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 being created determined as of 4:00 p.m. ET on the 
date the order to purchase is properly received.
    The Administrator determines the quantity of bitcoin used to 
calculate the Creation

[[Page 11338]]

Basket for a given day by dividing the number of bitcoin held by the 
Trust as of the opening of business on that business day, 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 creation order, an authorized 
participant will deliver cash to create Shares. For an in-kind 
creation order, an authorized participant or its designee will 
deliver bitcoin to create Shares. 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 ``VanEck Ethereum Trust'' 
section of the Eth ETP Amendment No. 2 stated: \9\
---------------------------------------------------------------------------

    \9\ See Eth ETP Amendment No. 2 at 46469.

    When the Trust sells or redeems its Shares, it will do so in 
cash transactions in blocks of 25,000 Shares (a ``Creation Basket'') 
at the Trust's net asset value (``NAV''). For creations, authorized 
participants will deliver cash to the Trust's account with the Cash 
Custodian in exchange for Shares. Upon receipt of an approved 
creation order, the Sponsor, on behalf of the Trust, will submit an 
order to buy the amount of ether represented by a Creation Basket. 
Based off ether executions, the Cash Custodian will request the 
required cash from the authorized participant; the Transfer Agent 
will only issue Shares when the authorized participant has made 
delivery of the cash. Following receipt by the Cash Custodian of the 
cash from an authorized participant, the Sponsor, on behalf of the 
Trust, will approve an order with one or more previously onboarded 
trading partners to purchase the amount of ether represented by the 
Creation Basket. This purchase of ether will normally be cleared 
through an affiliate of the Custodian (although the purchase may 
also occur directly with the trading partner) and the ether will 
settle directly into the Trust's account at the Custodian.\10\
---------------------------------------------------------------------------

    \10\ For redemptions, the process will occur in the reverse 
order. Upon receipt of an approved redemption order, the Sponsor, on 
behalf of the Trust, will submit an order to sell the amount of 
ether represented by a Creation Basket and the cash proceeds will be 
remitted to the authorized participant when the 25,000 Shares are 
received by the Transfer Agent.

---------------------------------------------------------------------------
    The Exchange proposes to replace this language with the following:

    When the Trust creates or redeems its Shares in cash 
transactions, it will do so in blocks of 25,000 Shares (a ``Creation 
Basket'') at the Trust's net asset value (``NAV''). For cash 
creations or 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. When 
the Trust creates or redeems its Shares in-kind, it will do so in 
Creation Units in exchange for ether. Authorized participants will 
deliver, or facilitate delivery of, 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.

    Additionally, the ``Investment Objective'' section of the Eth ETP 
Amendment No. 2 stated: ``In seeking to achieve its investment 
objective, the Trust will hold ether and will value its Shares daily 
based on the reported Benchmark (as discussed below) and process all 
creations and redemptions in cash transactions with authorized 
participants.'' \11\ The Exchange proposes to replace this language 
with the following:
---------------------------------------------------------------------------

    \11\ Id.

    In seeking to achieve its investment objective, the Trust will 
hold ETH, cash, and cash equivalents and will value its Shares daily 
based on the reported Benchmark (as discussed below) and process all 
creations and redemptions in transactions 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 follows:
---------------------------------------------------------------------------

    \12\ See Eth ETP Amendment No. 2 at 46471.
---------------------------------------------------------------------------

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 25,000 Shares that are based on the 
quantity of ether attributable to each Share of the Trust (e.g., a 
Creation Basket) at the Trust's NAV. When the Trust creates or 
redeems its Shares in-kind, it will do so in transfers of ether in 
blocks of 25,000 Shares 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 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.
    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 
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 such amount of ether, the 
amount of which is based on 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 
ether is based on the quantity of ether attributable to the Creation 
Baskets being created determined as of 4:00 p.m. ET on the date the 
order to purchase is properly received.
    The Administrator determines the quantity of ether used to 
calculate the Creation Basket for a given day by dividing the number 
of ether held by the Trust as of the opening of business on that 
business day, adjusted for the amount of ether 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 creation order, an authorized 
participant will deliver cash to create Shares. For an in-kind 
creation order, an authorized participant or its designee will 
deliver ether to create Shares. 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. 2, as amended, and the Eth ETP Amendment No. 
2 remain unchanged and will continue to constitute continuing listing

[[Page 11339]]

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.
---------------------------------------------------------------------------

    \13\ 15 U.S.C. 78f(b).
    \14\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    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.

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. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Within 45 days of the date of publication of this notice in the 
Federal Register or within such longer period up to 90 days (i) as the 
Commission may designate if it finds such longer period to be 
appropriate and publishes its reasons for so finding or (ii) as to 
which the Exchange consents, the Commission will:
    A. by order approve or disapprove such proposed rule change, or
    B. institute proceedings to determine whether the proposed rule 
change should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to [email protected]. Please include 
file number SR-CboeBZX-2025-031 on the subject line.

Paper Comments

     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 (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for website viewing and 
printing in the Commission's Public Reference Room, 100 F Street NE, 
Washington, DC 20549, on official business days between the hours of 10 
a.m. and 3 p.m. Copies of the filing also will be available for 
inspection and copying at the principal office of the Exchange. Do not 
include personal identifiable information in submissions; you should 
submit only information that you wish to make available publicly. We 
may redact in part or withhold entirely from publication submitted 
material that is obscene or subject to copyright protection. All 
submissions should refer to file number SR-CboeBZX-2025-031 and should 
be submitted on or before March 26, 2025.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\15\
---------------------------------------------------------------------------

    \15\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-03511 Filed 3-4-25; 8:45 am]
BILLING CODE 8011-01-P

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