SEC reviews Cboe plan for 3x bitcoin and ether ETFs

Cboe BZX filed with the Securities and Exchange Commission on Aug. 14 to list two exchange-traded funds that would target three times the daily performance of bitcoin and ether. The funds are part of a six-product lineup sponsored by Volatility Shares LLC’s VS Trust that also includes 3x gold, 3x silver, 3x crude oil and 3x natural gas ETFs.

The exchange submitted the proposal under Section 19(b) of the Securities Exchange Act because BZX Rule 14.11(e)(4)(F) bars listing trusts whose returns correspond to a specified multiple of a benchmark. The SEC normally has 45 days from publication in the Federal Register to act on such filings and can extend its review up to 240 days.

Both crypto funds would pursue their 3x daily targets by investing primarily in futures contracts traded on the Chicago Mercantile Exchange rather than by holding spot bitcoin or ether. Each fund would hold first- and second-month futures contracts and maintain cash and cash equivalents as collateral or margin. The filing states each fund will roll about 20% of expiring positions per day over a five-day window ahead of the near-month contract’s expiry. The exchange cited at least six months of trading history for the relevant CME futures as an eligibility criterion.

Operational approvals must occur on two tracks. The SEC must approve Cboe’s exchange-rule change under Section 19(b) and the trust must file a Form S-1 registration statement that must become effective before shares may begin trading. The exchange requires a minimum of 100,000 shares of each fund at launch, with authorized participants creating or redeeming blocks of 10,000 shares in cash. An intraday indicative value would be published every 15 seconds during regular trading hours. Trading can be halted if the daily net asset value is not disseminated to all market participants at the same time or if the intraday price feed is interrupted.

Because the trusts would operate as commodity pools, they fall under Commodity Futures Trading Commission oversight rather than the investment-company framework. The SEC amended generic listing standards in July 2025 to allow actively managed commodity-based trust shares, to define “digital commodity,” and to permit up to 15% of a trust’s assets to fall outside the generic criteria; the provision barring specified multiples in the exchange rule still requires individual SEC review for leveraged products. Financial Industry Regulatory Authority rules impose stricter sales-practice and customer margin requirements on leveraged and inverse securities for firms that carry customer accounts.

About 67 exchange-traded products that target three times or negative three times a benchmark already trade on national exchanges, split between 51 investment-company funds and 16 exchange-traded notes. Flow data referenced in the filing shows U.S. spot bitcoin ETFs had $131.13 million in net outflows on Aug. 13, while ether-focused funds recorded $6.72 million in net inflows. Given the regulatory issues and product structure, the SEC may extend its review timeline up to the 240-day limit.