SEC Eyes Ethereum ETFs: Crypto Options Hit the Trading Floor Soon
Published Date: 2/24/2025
Notice
Summary
Cboe Exchange is gearing up to let traders buy and sell options on three new Ethereum-related ETFs: the Grayscale Ethereum Trust ETF, the Grayscale Ethereum Mini Trust ETF, and the Bitwise Ethereum ETF. This change means more ways for investors to play in the crypto market starting soon, with potential new money moves and trading opportunities. The SEC is reviewing the plan and inviting public feedback before it goes live.
Analyzed Economic Effects
5 provisions identified: 2 benefits, 2 costs, 1 mixed.
Options Listed on Three Ethereum ETFs
Cboe proposes to list and trade options on three named Ethereum-backed ETFs: the Grayscale Ethereum Trust ETF, the Grayscale Ethereum Mini Trust ETF, and the Bitwise Ethereum ETF. That means you could buy and sell standardized options contracts tied to these three ETFs once the rule is approved.
Settlement, Expirations, and LEAPS Rules
Options on the Ethereum Funds will be physically settled American-style and the Exchange may open weekly, monthly, quarterly, and long-term LEAPS that expire from 12 to 180 months. At least one expiration month will be opened at commencement of trading for each ETF.
25,000-Contract Position Limit Set
The Exchange proposes a position and exercise limit of 25,000 same-side option contracts for each of the three Ethereum Fund options. If you trade options on these ETFs, no single account could hold more than 25,000 contracts on the same side at one time under this rule.
Ethereum ETFs Excluded From FLEX Options
The proposed rule amends Rule 4.20 to exclude the three Ethereum Funds from the Exchange's FLEX option provision, meaning FLEX-style customizable option contracts would not be authorized for these ETFs. Traders who use FLEX (customized) options would not be able to use that FLEX framework for these specific ETFs if the rule is adopted.
Strike Intervals and Minimum Price Increments
Strike price intervals for Ethereum Fund options will be $1 for strikes at $200 or below and $5 where the strike is over $200. Minimum quoting increments will be $0.05 when an option's price is below $3.00 and $0.10 when the price is $3.00 or higher (with potential participation in penny-increment programs that allow $0.01/$0.05 increments).
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Key Dates
Department and Agencies
Related Federal Register Documents
2026-17183, Regulation Crypto Assets
The Securities and Exchange Commission ("Commission") is proposing new rules to create a tailored offering regime for certain investment contracts involving crypto assets. The proposed offering regime is intended to facilitate capital formation and accommodate innovation within the crypto asset markets while, at the same time, ensuring that investors are adequately protected and provided with the information they need to make informed investment decisions. The proposed rules would be set forth in a new regulation titled "Regulation Crypto Assets" and would include two exemptions from the registration requirements of section 5 of the Securities Act of 1933. The first exemption would permit offerings of up to $5 million during a four-year period. The second exemption would permit offerings of up to $75 million during each 12-month period. Under both exemptions, issuers would be required to make certain principles-based narrative disclosures available to their investors. In addition, issuers under the second exemption would be required to provide financial statements and would be subject to ongoing reporting requirements. Issuers that rely on these exemptions would remain subject to the antifraud and antimanipulation provisions of the Federal securities laws. The proposed rules also would include a conditional safe harbor from the term "investment contract" in the definitions of "security" in the Securities Act of 1933 and the Securities Exchange Act of 1934. If the conditions of that proposed safe harbor are satisfied, then a crypto asset would be deemed not to be subject to an investment contract for purposes of those definitions of "security."
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2026-07651, Concept Release on Consolidated Audit Trail and Other Audit Trails and Data Sources
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