[Federal Register Volume 90, Number 126 (Thursday, July 3, 2025)]
[Notices]
[Pages 29596-29597]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-12423]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-103352; File No. SR-CboeBZX-2025-045]
Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Order
Instituting Proceedings To Determine Whether To Approve or Disapprove a
Proposed Rule Change, as Modified by Amendment No. 1, To List and Trade
Shares of the Osprey Bitcoin Trust Under BZX Rule 14.11(e)(4),
Commodity-Based Trust Shares
June 30, 2025.
I. Introduction
On March 14, 2025, Cboe BZX Exchange, Inc. (``BZX'') filed with the
Securities and Exchange Commission (``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 list and trade
shares (``Shares'') of the Osprey Bitcoin Trust (``Trust'') under BZX
Rule 14.11(e)(4), Commodity-Based Trust Shares. On March 25, 2025, 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replaced and superseded the original filing in its entirety.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, was published for
comment in the Federal Register on April 2, 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. 102736 (Mar. 27,
2025), 90 FR 14493 (``Notice''). The Commission has received no
comments on the proposed rule change.
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On May 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\ This order institutes proceedings under Section 19(b)(2)(B)
of the Act \6\ to determine whether to approve or disapprove the
proposed rule change, as modified by Amendment No. 1.
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\4\ 15 U.S.C. 78s(b)(2).
\5\ See Securities Exchange Act Release No. 103045, 90 FR 21528
(May 20, 2025). The Commission designated July 1, 2025, as the date
by which the Commission shall approve, disapprove, or institute
proceedings to determine whether to disapprove the proposed rule
change, as modified by Amendment No. 1.
\6\ 15 U.S.C. 78s(b)(2)(B).
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II. Summary of the Proposal, as Modified by Amendment No. 1
As described in more detail in the Notice,\7\ the Exchange proposes
to list
[[Page 29597]]
and trade the Shares of the Trust under BZX Rule 14.11(e)(4), which
governs the listing and trading of Commodity-Based Trust Shares on the
Exchange.
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\7\ See Notice, supra note 3.
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According to the Exchange, the investment objective of the Trust is
for the Shares to reflect the performance of bitcoin as measured by
reference to the Coin Metrics Coin Metrics' Bletchley Indexes Bitcoin
Index (``Index''),\8\ before payment of the Trust's expenses and other
liabilities.\9\ In seeking to achieve its investment objective, the
Trust will hold only bitcoin, cash, and cash equivalents.\10\ The value
of the bitcoin held by the Trust is determined based on the estimated
fair market value price for bitcoin, reflecting the execution price of
bitcoin on its principal market as determined by Lukka Inc., an
independent third-party digital asset data company.\11\ When the Trust
sells or redeems its Shares, it will do so in cash transactions with
authorized participants in blocks of 50,000 Shares.\12\
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\8\ The Index is a U.S. dollar-denominated composite reference
rate for the price of bitcoin and is determined by Coin Metrics,
Inc. See id. at 14495.
\9\ See id. at 14494-95. Osprey Funds LLC is the sponsor of the
Trust, CSC Delaware Trust Company is the trustee, and Coinbase
Custody Trust Company, LLC will be responsible for custody of the
Trust's bitcoin. See id. at 14493-94.
\10\ See id. at 14495.
\11\ See id.
\12\ See id. at 14496.
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III. Proceedings To Determine Whether To Approve or Disapprove SR-
CboeBZX-2025-045 and Grounds for Disapproval Under Consideration
The Commission is instituting proceedings pursuant to Section
19(b)(2)(B) of the Act \13\ to determine whether the proposed rule
change, as modified by Amendment No. 1, should be approved or
disapproved. Institution of proceedings is appropriate at this time in
view of the legal and policy issues raised by the proposed rule change.
Institution of proceedings does not indicate that the Commission has
reached any conclusions with respect to any of the issues involved.
Rather, the Commission seeks and encourages interested persons to
provide comments on the proposed rule change, as modified by Amendment
No. 1.
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\13\ 15 U.S.C. 78s(b)(2)(B).
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Pursuant to Section 19(b)(2)(B) of the Act,\14\ the Commission is
providing notice of the grounds for disapproval under consideration.
The Commission is instituting proceedings to allow for additional
analysis of the proposed rule change's consistency with Section 6(b)(5)
of the Act, which requires, among other things, that the rules of a
national securities exchange be ``designed to prevent fraudulent and
manipulative acts and practices'' and ``to protect investors and the
public interest.'' \15\
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\14\ Id.
\15\ 15 U.S.C. 78f(b)(5).
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The Commission asks that commenters address the sufficiency of the
Exchange's statements in support of the proposal, which are set forth
in the Notice, in addition to any other comments they may wish to
submit about the proposed rule change. In particular, the Commission
seeks comment on whether the proposal to list and trade Shares of the
Trust, which would hold bitcoin, is designed to prevent fraudulent and
manipulative acts and practices or raises any new or novel concerns not
previously contemplated by the Commission.
IV. Procedure: Request for Written Comments
The Commission requests that interested persons provide written
submissions of their views, data, and arguments with respect to the
issues identified above, as well as any other concerns they may have
with the proposal. In particular, the Commission invites the written
views of interested persons concerning whether the proposal, as
modified by Amendment No. 1, is consistent with Section 6(b)(5) or any
other provision of the Act, and the rules and regulations thereunder.
Although there do not appear to be any issues relevant to approval or
disapproval that would be facilitated by an oral presentation of views,
data, and arguments, the Commission will consider, pursuant to Rule
19b-4, any request for an opportunity to make an oral presentation.\16\
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\16\ Section 19(b)(2) of the Act, as amended by the Securities
Acts Amendments of 1975, Public Law 94-29 (June 4, 1975), grants the
Commission flexibility to determine what type of proceeding--either
oral or notice and opportunity for written comments--is appropriate
for consideration of a particular proposal by a self-regulatory
organization. See Securities Acts Amendments of 1975, Senate Comm.
on Banking, Housing & Urban Affairs, S. Rep. No. 75, 94th Cong., 1st
Sess. 30 (1975).
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Interested persons are invited to submit written data, views, and
arguments regarding whether the proposed rule change, as modified by
Amendment No. 1, should be approved or disapproved by July 24, 2025.
Any person who wishes to file a rebuttal to any other person's
submission must file that rebuttal by August 7, 2025.
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-2025-045 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-2025-045. 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-2025-045 and should
be submitted on or before July 24, 2025. Rebuttal comments should be
submitted by August 7, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\17\
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\17\ 17 CFR 200.30-3(a)(57).
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J. Matthew DeLesDerenier,
Deputy Secretary.
[FR Doc. 2025-12423 Filed 7-2-25; 8:45 am]
BILLING CODE 8011-01-P