Voglio sapere a riguardo di…

Federal Register / Vol. 86, No. 172 / Thursday, September 9, 2021 / Notices II. Self-Regulatory Organizations Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.

lotter on DSK11XQN23PROD with NOTICES1

A. Self-Regulatory Organizations Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The ETF community has worked for many years to obtain the approval of an exchange tradeable product that provides investors with the important opportunity to gain exposure to digital currencies such as bitcoin. Since March 2017, the Commission has disapproved more than a dozen such proposals and failed to act on many others that were filed and later withdrawn. During that period, digital assets have gained substantial traction in the global and domestic economy; have become a sought-after investment tool for a rapidly-expanding number of institutional and individual investors;
and have spurred significant investment and improvement in all aspects of digital currency ownership, including storage, security, payments, and exchange.3
Nasdaq believes that bitcoin and its surrounding ecosystem have evolved sufficiently to support the approval of a Bitcoin Futures ETF because the concerns the Commission has identified previously have been addressed. To that end, Nasdaq believes that its current proposal differs from previous filings recently submitted due to significant developments in the domestic bitcoin futures market, including:
1 In previous disapproval orders, the Commission expressed concern over a bitcoin fund holding physical bitcoin, but the Trust instead will pursue its investment objective solely by holding CME Bitcoin Futures that are cashsettled and traded on the Chicago Mercantile Exchange, Inc. the CME, 3 For example, Coinbase COIN alone sports an enterprise market capitalization of around $67
billion and it recently reported over 68 million individual accounts holding $180 billion of digital currencies, and $462 billion in quarterly notional value of trading volume.

VerDate Sep<11>2014

19:38 Sep 08, 2021

Jkt 253001

which was self-certified with the Commodity Futures Trading Commission the CFTC aside from holding cash and Money Market Instruments, as defined herein;
2 The Commission expressed concern in previous disapproval orders about self-regulation and the oversight necessary to maintain and promote the fair and transparent trading of listed products, including bitcoin futures.
Specifically, the Commission expressed concern with the listing exchanges ability to deter fraud and manipulation in compliance with Section 6b5 of the Act. The Commission stated that this could be addressed by entering into a surveillance agreement with a regulated market of significant size.
Since the previous disapproval orders, both the bitcoin and bitcoin futures markets have developed to the point that the CME Bitcoin Futures market is a regulated market of significant size, for purposes of compliance with Section 6b5 of the Act.
3 The CMEs compliance with the CFTCs Core Principles detailed further herein also serves to strengthen the Trusts resistance to fraud and manipulation and should appropriately address the Commissions concerns regarding investor protection. The CME
Bitcoin Futures contract is cash settled, is not readily subject to manipulation or distortion, and is subject to real-time trade monitoring and comprehensive and accurate trade reconstruction.
Background The Exchange proposes to list and trade Shares of the Trust under Nasdaq Rule 5711g, which governs the listing and trading of Commodity Futures Trust Shares on the Exchange.4 The Shares will be offered by the Trust, which was established as a Delaware statutory trust on May 18, 2021. According to the Draft Registration Statement as defined below, the Trust will not be registered as an investment company under the Investment Company Act of 1940 and is not required to register under such act.5
The Trust is registered as a commodity pool under the Commodity Exchange Act CEA.6 The Shares of the Trust 4 Nasdaq Rule 5711giii defines Commodity Futures Trust Shares as a security that A is issued by a trust Trust that 1 is a commodity pool as defined in the Commodity Exchange Act and regulations thereunder, and that is managed by a commodity pool operator registered with the Commodity Futures Trading Commission, and 2
holds positions in futures contracts that track the performance of a specified commodity, or interests in a commodity pool which, in turn, holds such positions; and B is issued and redeemed daily in specified aggregate amounts at net asset value.
5 15 U.S.C. 80a1.
6 7 U.S.C. 1.

PO 00000

Frm 00048

Fmt 4703

Sfmt 4703

50571

will be registered with the Commission by means of the Trusts registration statement on Form S1 the Registration Statement under the Securities Act of 1933, as amended the Securities Act. The Registration Statement will be effective as of the date of any offer and sale pursuant to the Registration Statement. A draft registration statement the Draft Registration Statement was filed confidentially with the Commission on May 21, 2021.7
Valkyrie Funds LLC the Sponsor serves as the Trusts sponsor and commodity pool operator. Vident Investment Advisory, LLC the SubAdvisor serves as the Trusts subadvisor and commodity trading advisor.
XBTO Trading, LLC is the research provider for the Sponsor and the SubAdvisor. Delaware Trust Company the Trustee serves as the trustee for the Trust. The Sponsor is currently considering third-party service providers for the roles of Administrator, Transfer Agent, Custodian and Marketing Agent, as described in the Draft Registration Statement.
The Bitcoin Industry and Market Bitcoin Bitcoin is the digital asset that is native to, and created and transmitted through the operations of, the peer-topeer Bitcoin Network, a decentralized network of computers that operates on cryptographic protocols. No single entity owns or operates the Bitcoin Network, the infrastructure of which is collectively maintained by a decentralized user base. The Bitcoin Network allows people to exchange tokens of value, called bitcoin, which are recorded on a public transaction ledger known as the Blockchain. Bitcoin can be used to pay for goods and services, or it can be converted to fiat currencies, such as the U.S. dollar, at rates determined on bitcoin trading platforms or in individual end-user-toend-user transactions under a barter system.
The Bitcoin Network is decentralized and does not require governmental authorities or financial institution intermediaries to create, transmit, or determine the value of bitcoin. In addition, no party may easily censor transactions on the Bitcoin Network. As a result, the Bitcoin Network is often 7 See Draft Registration Statement on Form S1
confidentially filed with the Commission on May 21, 2021 file no. 37704910. The descriptions of the Trust and the Shares contained herein are based, in part, on information in the Draft Registration Statement.

E:FRFM09SEN1.SGM

09SEN1