On 2 June 2025, the United States Securities and Exchange Commission (US SEC) published an Order instituting proceedings to determine whether to approve or disapprove a proposed rule change filed by Cboe BZX Exchange, Inc. The proposed rule change seeks to amend the terms governing the listing and trading of the WisdomTree Bitcoin Fund under BZX Rule 14.11(e)(4), to allow the fund to conduct in-kind creations and redemptions of bitcoin.
The proposed rule change was originally submitted by Cboe BZX Exchange, Inc. on 20 February 2025, pursuant to Section 19(b)(1) of the United States Securities Exchange Act of 1934 and United States SEC Rule 19b-4. The US SEC published the proposal for public comment in the Federal Register on 5 March 2025. On 14 April 2025, the US SEC extended the deadline to decide on the proposal until 3 June 2025. As of 02 June 2025, the US SEC on 2 June 2025, instituted proceedings under Section 19(b)(2)(B) of the United States Securities Exchange Act of 1934 to allow further analysis of the legal and policy considerations raised by the amendment.
The proposal specifically requests a change in the creation and redemption mechanics of the WisdomTree Bitcoin Fund to permit in-kind transactions involving bitcoin, instead of relying solely on cash-based settlements. According to the exchange, all other conditions and representations that governed the US SEC’s prior approval of the WisdomTree Bitcoin Fund on 10 January 2024 will remain unchanged and continue to apply as ongoing listing requirements.
Instituting proceedings does not indicate any conclusion on the merits of the proposal by US SEC. The purpose of the proceedings is to evaluate whether the proposed rule change is consistent with Section 6(b)(5) of the United States Securities Exchange Act of 1934. This section requires that the rules of a national securities exchange be designed to prevent fraudulent and manipulative acts and practices, promote just and equitable principles of trade, remove impediments to a free and open market, and protect investors and the public interest.
Interested persons are invited to submit written comments on the proposed rule change, including views, data, and arguments addressing whether it is consistent with Section 6(b)(5) or any other provision of the United States Securities Exchange Act of 1934. Rebuttal comments may also be submitted in accordance with the timeframes to be published in the Federal Register. The US SEC has not scheduled an oral presentation of views but will consider requests for one under United States Rule 19b-4.
All submissions/comments should refer to file number SR-CboeBZX-2025-033 and may be submitted via the official US SEC website or by email or post. The order remains open to public participation and further comment until the designated period of 21 days is reached.
(Source: https://www.sec.gov/files/rules/sro/cboebzx/2025/34-103165.pdf)
