SEC Clears Cboe to List Volatility Shares’ 3x Bitcoin and Ether Funds

AI summary of the source article

The U.S. Securities and Exchange Commission approved a Cboe BZX Exchange rule change on Oct. 2, clearing the exchange to list six triple-leveraged products from Volatility Shares. The approved products include a 3x Bitcoin ETF, a 3x Ether ETF, and funds tracking gold, silver, crude oil, and natural gas. Classified as commodity-based trust shares under the Securities Act of 1933, the funds circumvent Investment Company Act of 1940 restrictions that cap leverage at 200%. Each fund will hold first- and second-month futures contracts alongside cash collateral. The SEC order does not establish a launch date, and broker-dealers remain subject to FINRA margin and sales-practice rules.

Why it matters

The decision allows triple-leveraged crypto exposure on U.S. exchanges by utilizing a 1933 Act trust structure to bypass the 200% leverage cap governing traditional 1940 Act funds.

Key facts

• The SEC approved a Cboe BZX Exchange rule change clearing six 3x leveraged funds from Volatility Shares, including Bitcoin and Ether products.
• The funds are registered as commodity-based trust shares under the Securities Act of 1933 and will hold first- and second-month futures contracts.
• The SEC order approving the rule change does not establish an official launch date for the funds.