The CBOE BZX Exchange has formally submitted a 19b-4 filing to the U.S. SEC regarding amendments to Bitcoin and Ethereum exchange-traded funds (ETFs).
This regulatory request, revealed by ETF Store President Nate Geraci on January 28, aims to revise the structure of the 21Shares Core Ethereum ETF and ARK 21Shares Bitcoin ETF.
If approved, the changes would permit in-kind creations and redemptions, streamlining the process for these ETFs, which are already authorized for trading under BZX Rule 14.11(e)(4).
Focus on Institutional Participants
Specifically, the amendment targets Authorized Participants (APs), omitting retail investors from its scope. In-kind transactions would allow APs to exchange ETF shares for underlying assets rather than using cash, potentially enhancing market efficiency. This method could reduce transaction complexity and associated costs by eliminating the need for Bitcoin to be sold before acquiring ETF shares.
Industry observers responded to the filing with mixed insights. One commentator suggested that such a change might create a smoother market by reducing friction between ETFs and broader crypto markets.
Another analyst viewed the proposal as a potential indicator of increasing institutional participation and market advancement.
SEC’s Stance on 19b-4 Applications
CBOE BZX Exchange has submitted multiple 19b-4 filings in the past, but not all have gained SEC approval. The regulator previously dismissed similar applications for two proposed spot Solana ETFs, prompting their removal from CBOE’s official listings.
Discussions between the SEC and ETF issuers largely revolved around whether Solana should be classified as a security. The SEC has consistently argued in regulatory proceedings that Solana falls within its jurisdiction under securities law.
Typically, exchanges file 19b-4 documents on behalf of ETF issuers as part of the SEC’s review process. Upon acceptance, these filings are published in the Federal Register, initiating formal regulatory scrutiny.
In October 2024, the SEC approved rule modifications permitting trading options on spot Bitcoin ETFs. CBOE secured authorization to list options on ten Bitcoin ETFs, though the Grayscale Bitcoin Mini Trust (BTC) was omitted.
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