Statement Summary
The SEC has initiated proceedings to explore the proposed rule change by Cboe BZX Exchange to list and trade shares of the Canary XRP Trust, under the Commodity-Based Trust Shares regulation. Filed on February 6, 2025, the Trust aims to track the performance of XRP, holding only XRP, cash, and equivalents. The SEC seeks public comments on the implications of this proposal, particularly regarding investor protection and the prevention of fraudulent practices, as required by securities regulations. The Commission has extended the review period to May 26, 2025, and calls for input on its alignment with investor interests and regulatory standards. Interested parties can submit comments electronically or by mail.
Original Statement
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-103115; File No. SR-CboeBZX-2025-022]
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 Canary XRP Trust 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 Canary XRP Trust (“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 25, 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 CoinDesk XRP USD CCIX 30min NY Rate (“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 Approval
The Commission is instituting proceedings 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.
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 XRP, is designed to prevent fraudulent and manipulative acts and practices or raises any new or novel concerns not previously contemplated by the Commission.
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 is consistent with Section 6(b)(5) or any other provision of the Act, and the rules and regulations thereunder.
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.
- 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-2025-022. To help the Commission process and review your comments efficiently, please use only one method. The Commission will post all comments on the Commission’s internet website.
Please do not include personal identifiable information in submissions; you should submit only information that you wish to make available publicly.
All submissions should refer to file number SR-CboeBZX-2025-022 and should be submitted on or before [INSERT DATE 21 DAYS AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER]. Rebuttal comments should be submitted by [INSERT DATE 35 DAYS AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER].
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Sherry R. Haywood,
Assistant Secretary.
