On 11 March 2025, the United States Securities and Exchange Commission (US SEC) published a notice regarding a proposed rule change submitted by The Nasdaq Stock Market LLC (Nasdaq), seeking approval to list and trade shares of the Grayscale Hedera Trust (HBAR) under Nasdaq Rule 5711(d), which governs the listing of Commodity-Based Trust Shares. The notice, published as Release No. 34-102569; File No. SR-NASDAQ-2024-101, invites public comments and initiates the US SEC’s formal review process of the proposed exchange-traded product (ETP) linked to the digital asset Hedera (HBAR).
The proposal aims to allow Nasdaq to list and trade shares of the Grayscale Hedera Trust, which will offer investors indirect exposure to the value of Hedera’s native digital asset, HBAR. The Trust is designed to reflect the value of HBAR held by the Trust, less the Trust’s expenses and liabilities. It will not engage in active trading or use derivatives and does not plan to register under the United States Investment Company Act of 1940. Grayscale Investments, LLC will serve as the sponsor of the Trust, with Delaware Trust Company acting as trustee. Coinbase Custody Trust Company, LLC will serve as the custodian for the Trust’s HBAR holdings, while Vigilant Compliance, LLC has been appointed as the Trust’s administrator.
The background of this rule change lies in Nasdaq’s efforts to expand its digital asset offerings by listing commodity-based trust shares linked to cryptocurrencies. The Grayscale Hedera Trust proposes to calculate its Net Asset Value (NAV) based on the CoinDesk Hedera Reference Rate, which reflects a volume-weighted average price of HBAR across eligible spot markets. The Trust will not allow in-kind creations or redemptions; rather, all such activity will be conducted in cash, facilitating easier administration and investor access.
The US SEC’s timeline for review follows the procedure outlined under Section 19(b)(1) of the United States Securities Exchange Act of 1934 and Rule 19b-4 thereunder. Upon publication in the Federal Register, the Commission has 45 days to approve, disapprove, or extend the review period for the proposed rule change. The US SEC has also requested public comment on whether the proposal sufficiently addresses concerns related to investor protection, market manipulation, and transparency.
For US SEC approval, the proposal must satisfy the criteria set out in Section 6(b)(5) of the United States Securities Exchange Act of 1934, which requires that the rules of an exchange are designed to prevent fraudulent and manipulative acts and practices, promote just and equitable principles of trade, and protect investors and the public interest.
