SEC Opens Review of Cboe Proposal for 3x Bitcoin and Ether ETFs

A tailored filing rather than a standard listing

The proposed lineup runs into a specific obstacle in Cboe BZX’s existing rules. Rule 14.11(e)(4)(F) bars a trust from offering returns that correspond to a stated multiple of a benchmark, which means these leveraged funds cannot rely on the exchange’s standard listing framework.

Because of that restriction, Cboe submitted the products through a Section 19(b) rule-change filing under the Securities Exchange Act. That is the same individualized approval path commodity-based trust shares used before the SEC approved generic listing standards in September 2025.

How the crypto funds would be structured

The two crypto ETFs would not hold bitcoin or ether directly. Instead, they would seek exposure through Chicago Mercantile Exchange futures tied to each asset, along with cash and cash equivalents used for collateral or margin.

According to the filing, each fund would invest in first- and second-month CME contracts. The exchange said bitcoin and ether both have CME futures markets with at least six months of history, which is one of the eligibility points cited in the proposal.

To manage expiring positions, each crypto fund would roll about 20% of those holdings per day over a five-day period ahead of the near-month contract’s expiration.

Recent rule changes still do not settle this case

The SEC on July 29 granted accelerated approval to an amendment of Cboe’s generic standards for commodity-based trust shares. That amendment allows actively managed commodity-based trust shares, adds a definition of “digital commodity,” and permits up to 15% of a trust’s net asset value in holdings that fall outside the generic criteria.

Even with those changes, the leverage restriction remains the key issue for this proposal. The filing says the amended standards would otherwise apply to the six funds, but the use of a fixed three-times return target still requires separate SEC approval.

What has to happen before any launch

An SEC approval of the exchange rule change would be only one step. The trust must also file a registration statement on Form S-1, and the funds’ shares cannot begin trading until that registration becomes effective. The exchange-rule review and the registration review move on separate tracks.

If the funds reach the market, at least 100,000 shares of each would need to be outstanding at launch. Authorized participants would create or redeem shares in cash in blocks of 10,000, while an intraday indicative value would be published every 15 seconds during regular trading hours.

Cboe would be required to halt trading if the daily net asset value is not disseminated to all market participants at the same time, and it may also halt trading if the intraday value feed is interrupted.

Oversight and the next confirmed deadlines

The six proposed products are sponsored by Volatility Shares LLC through the VS Trust and would operate as commodity pools under the oversight of the U.S. Commodity Futures Trading Commission rather than as investment companies.

Broker-dealers that carry customer accounts would also face stricter sales-practice and customer margin requirements for leveraged and inverse securities under Financial Industry Regulatory Authority rules.

For now, the immediate next step is the Federal Register publication of the SEC notice. Once that occurs, the public comment period will open for 21 days, and the SEC will have an initial 45-day window to approve the proposal, reject it, or begin further proceedings.