Statement Summary
On May 22, 2025, the SEC announced proceedings regarding a proposed rule change by Cboe BZX Exchange, Inc. to list and trade shares of the Bitwise XRP ETF. This ETF aims to track XRP’s performance through the CME CF Ripple-Dollar Reference Rate, holding assets in XRP, cash, and cash equivalents. Following its initial filing on February 6, the proposal has garnered community interest and scrutiny, especially concerning its compliance with regulations aimed at preventing fraud and protecting investors. The SEC has invited public comments on the proposal, particularly regarding its alignment with Section 6(b)(5) of the Exchange Act. Additionally, the Commission specified deadlines for submissions and rebuttals as it evaluates the implications of this cryptocurrency-based ETF.
Original Statement
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-103114; File No. SR-CboeBZX-2025-020]
Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Order Instituting Proceedings
to Determine Whether to Approve or Disapprove a Proposed Rule Change to List and
Trade Shares of the Bitwise XRP ETF under BZX Rule 14.11(e)(4), Commodity-Based
Trust Shares
May 22, 2025.
Introduction
On February 6, 2025, Cboe BZX Exchange, Inc. (“BZX” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) and Rule 19b-4 thereunder, a proposed rule change to list and trade shares (“Shares”) of the Bitwise XRP ETF (“Trust”) under BZX Rule 14.11(e)(4), Commodity-Based Trust Shares. The proposed rule change was published for comment in the Federal Register on February 24, 2025.
On March 11, 2025, pursuant to Section 19(b)(2) of the Act, 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. This order institutes proceedings under Section 19(b)(2)(B) of the Act to determine whether to approve or disapprove the proposed rule change.
Summary of the Proposal
As described in more detail in the Notice, the Exchange proposes to list 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. The investment objective of the Trust is to seek to track the performance of XRP, as measured by the CME CF Ripple-Dollar Reference Rate—New York Variant (“Pricing Benchmark”), adjusted for the Trust’s expenses and other liabilities. In seeking to achieve its investment objective, the Trust will hold XRP and will value its Shares daily as of 4:00 p.m. ET using the same methodology used to calculate the Pricing Benchmark. The Trust’s assets will only consist of XRP, cash, and cash equivalents. When the Trust sells or redeems its Shares, it will do so in cash transactions with authorized participants in blocks of 10,000 Shares.
Proceedings to Determine Whether to Approve or Disapprove
The Commission is instituting proceedings pursuant to Section 19(b)(2)(B) of the Act to determine whether the proposed rule change 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.
Pursuant to Section 19(b)(2)(B) of the Act, 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.”
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. The Commission invites the written views of interested persons concerning whether the proposal is consistent with Section 6(b)(5) or any other provision of the Act, and the rules and regulations thereunder. Interested persons are invited to submit written data, views, and arguments regarding whether the proposed rule change should be approved or disapproved.
Comments may be submitted by any of the following methods:
- Electronic Comments:
Use the Commission’s internet comment form or send an email to rule-comments. Please include file number SR-CboeBZX-2025-020 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-2025-020.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Sherry R. Haywood,
Assistant Secretary.
