31014 Federal Register / Vol. 83, No. 127 / Monday, July 2, 2018 / Notices 

3The requested relief would apply to direct sales 

of shares in Creation Units by a Fund to a Fund of 

Funds and redemptions of those shares. Applicants 

are not seeking relief from section 17(a) for, and the 

requested relief will not apply to, transactions 

where a Fund could be deemed an Affiliated 

Person, or a Second-Tier Affiliate, of a Fund of 

Funds because an Adviser or an entity controlling, 

controlled by or under common control with an 

Adviser provides investment advisory services to 

that Fund of Funds. 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

not result in dilution of an investment 

in shares, and (b) to the extent different 

prices exist during a given trading day, 

or from day to day, such variances occur 

as a result of third-party market forces, 

such as supply and demand. Therefore, 

applicants assert that secondary market 

transactions in shares will not lead to 

discrimination or preferential treatment 

among purchasers. Finally, applicants 

represent that share market prices will 

be disciplined by arbitrage 

opportunities, which should prevent 

shares from trading at a material 

discount or premium from NAV. 

6. With respect to Funds that effect 

creations and redemptions of Creation 

Units in kind and that are based on 

certain Underlying Indexes that include 

foreign securities, applicants request 

relief from the requirement imposed by 

section 22(e) in order to allow such 

Funds to pay redemption proceeds 

within fifteen calendar days following 

the tender of Creation Units for 

redemption. Applicants assert that the 

requested relief would not be 

inconsistent with the spirit and intent of 

section 22(e) to prevent unreasonable, 

undisclosed or unforeseen delays in the 

actual payment of redemption proceeds. 

7. Applicants request an exemption to 

permit Funds of Funds to acquire Fund 

shares beyond the limits of section 

12(d)(1)(A) of the Act; and the Funds, 

and any principal underwriter for the 

Funds, and/or any broker or dealer 

registered under the Exchange Act, to 

sell shares to Funds of Funds beyond 

the limits of section 12(d)(1)(B) of the 

Act. The application’s terms and 

conditions are designed to, among other 

things, help prevent any potential (i) 

undue influence over a Fund through 

control or voting power, or in 

connection with certain services, 

transactions, and underwritings, (ii) 

excessive layering of fees, and (iii) 

overly complex fund structures, which 

are the concerns underlying the limits 

in sections 12(d)(1)(A) and (B) of the 

Act. 

8. Applicants request an exemption 

from sections 17(a)(1) and 17(a)(2) of the 

Act to permit persons that are Affiliated 

Persons, or Second-Tier Affiliates, of the 

Funds, solely by virtue of certain 

ownership interests, to effectuate 

purchases and redemptions in-kind. The 

deposit procedures for in-kind 

purchases of Creation Units and the 

redemption procedures for in-kind 

redemptions of Creation Units will be 

the same for all purchases and 

redemptions and Deposit Instruments 

and Redemption Instruments will be 

valued in the same manner as those 

investment positions currently held by 

the Funds. Applicants also seek relief 

from the prohibitions on affiliated 

transactions in section 17(a) to permit a 

Fund to sell its shares to and redeem its 

shares from a Fund of Funds, and to 

engage in the accompanying in-kind 

transactions with the Fund of Funds.3

The purchase of Creation Units by a 

Fund of Funds directly from a Fund will 

be accomplished in accordance with the 

policies of the Fund of Funds and will 

be based on the NAVs of the Funds. 

9. Section 6(c) of the Act permits the 

Commission to exempt any persons or 

transactions from any provision of the 

Act if such exemption is necessary or 

appropriate in the public interest and 

consistent with the protection of 

investors and the purposes fairly 

intended by the policy and provisions of 

the Act. Section 12(d)(1)(J) of the Act 

provides that the Commission may 

exempt any person, security, or 

transaction, or any class or classes of 

persons, securities, or transactions, from 

any provision of section 12(d)(1) if the 

exemption is consistent with the public 

interest and the protection of investors. 

Section 17(b) of the Act authorizes the 

Commission to grant an order 

permitting a transaction otherwise 

prohibited by section 17(a) if it finds 

that (a) the terms of the proposed 

transaction are fair and reasonable and 

do not involve overreaching on the part 

of any person concerned; (b) the 

proposed transaction is consistent with 

the policies of each registered 

investment company involved; and (c) 

the proposed transaction is consistent 

with the general purposes of the Act. 

For the Commission, by the Division of 

Investment Management, under delegated 

authority. 

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–14191 Filed 6–29–18; 8:45 am] 

BILLING CODE P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–83520; File No. SR– 

CboeBZX–2018–040] 

Self-Regulatory Organizations; Cboe 

BZX Exchange, Inc.; Notice of Filing of 

Proposed Rule Change To List and 

Trade Shares of SolidX Bitcoin Shares 

Issued by the VanEck SolidX Bitcoin 

Trust 

June 26, 2018. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’) 1 and Rule 19b–4 thereunder,2

notice is hereby given that on June 20, 

2018, Cboe BZX Exchange, Inc. (‘‘BZX’’ 

or the ‘‘Exchange’’) filed with the 

Securities and Exchange Commission 

(‘‘Commission’’) the proposed rule 

change as described in Items I, II, and 

III below, which Items have been 

prepared by the Exchange. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange filed a proposal to list 

and trade shares of SolidX Bitcoin 

Shares (the ‘‘Fund’’) issued by the 

VanEck SolidX Bitcoin Trust (the 

‘‘Trust’’), under BZX Rule 14.11(e)(4), 

Commodity-Based Trust Shares. 

The text of the proposed rule change 

is available at the Exchange’s website at 

www.markets.cboe.com, at the principal 

office of the Exchange, and at the 

Commission’s Public Reference Room. 

II. Self-Regulatory Organization’s 

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 parts of such 

statements. 


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3The Commission approved BZX Rule 14.11(e)(4) 

in Securities Exchange Act Release No. 65225 

(August 30, 2011), 76 FR 55148 (September 6, 2011) 

(SR–BATS–2011–018). 

4All statements and representations made in this 

filing regarding (a) the description of the portfolio, 

(b) limitations on portfolio holdings or reference 

assets, or (c) the applicability of Exchange rules and 

surveillance procedures shall constitute continued 

listing requirements for listing the Shares on the 

Exchange. 

5The Trust will issue and redeem ‘‘Baskets’’, each 

equal to a block of 5 Shares, only to ‘‘Authorized 

Participants’’. See ‘‘Creation and Redemption of 

Shares’’ below. 

6A ‘‘bitcoin’’ is an asset that can be transferred 

among parties via the internet, but without the use 

of a central administrator or clearing agency 

(‘‘bitcoin’’). The asset, bitcoin, is generally written 

with a lower case ‘‘b’’. The asset, bitcoin, is 

differentiated from the computers and software (or 

the protocol) involved in the transfer of bitcoin 

among users, which constitute the ‘‘Bitcoin 

Network’’. The asset, bitcoin, is the intrinsically 

linked unit of account that exists within the Bitcoin 

Network. See ‘‘bitcoin and the Bitcoin Industry’’ 

below. 

7 15 U.S.C. 80a–1. 

8 17 U.S.C. 1. 

9The term ‘‘under normal circumstances’’ 

includes, but is not limited to, the absence of 

extreme volatility or trading halts in the price of 

bitcoin or the financial markets generally; 

operational issues causing dissemination of 

inaccurate market information; or force majeure 

type events such as systems failure, natural or manmade disaster, act of God, armed conflict, act of 

terrorism, riot or labor disruption or any similar 

intervening circumstance. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange proposes to list and 

trade the Shares under BZX Rule 

14.11(e)(4),3 which governs the listing 

and trading of Commodity-Based Trust 

Shares on the Exchange.4 SolidX 

Management LLC is the sponsor of the 

Trust (‘‘Sponsor’’). The Trust will be 

responsible for custody of the Trust’s 

bitcoin. SolidX Management LLC is a 

wholly-owned subsidiary of SolidX 

Partners Inc. Delaware Trust Company 

is the trustee (‘‘Trustee’’). The Bank of 

New York Mellon will be the 

administrator (‘‘Administrator’’), 

transfer agent (‘‘Transfer Agent’’) and 

the custodian, with respect to cash, 

(‘‘Cash Custodian’’) of the Trust. 

Foreside Fund Services, LLC will be the 

marketing agent (‘‘Marketing Agent’’) in 

connection with the creation and 

redemption of ‘‘Baskets’’ 5 of Shares. 

Van Eck Securities Corporation 

(‘‘VanEck’’) provides assistance in the 

marketing of the Shares. 

The Trust was formed as a Delaware 

statutory trust on September 15, 2016 

and is operated as a grantor trust for 

U.S. federal tax purposes. The Trust has 

no fixed termination date. 

According to the Registration 

Statement, each Share will represent a 

fractional undivided beneficial interest 

in the Trust’s net assets. The Trust’s 

assets will consist of bitcoin 6 held by 

the Trust utilizing a secure process as 

described below in ‘‘bitcoin Security 

and Storage for the Trust’’. The Trust 

will not normally hold cash or any other 

assets, but may hold a very limited 

amount of cash in connection with the 

creation and redemption of Baskets and 

to pay Trust expenses, as described 

below. 

According to the Registration 

Statement, the Trust will invest in 

bitcoin only. The activities of the Trust 

are limited to: (1) Issuing Baskets in 

exchange for the cash and/or bitcoin 

deposited with the Cash Custodian or 

Trust, respectively, as consideration; (2) 

purchasing bitcoin from various 

exchanges and in OTC transactions; (3) 

selling bitcoin (or transferring bitcoin, at 

the Sponsor’s discretion, to pay the 

Management Fee) as necessary to cover 

the Sponsor’s Management Fee, bitcoin 

Insurance Fee, Trust principals’ and 

employees’ salaries, expenses associated 

with securing the Trust’s bitcoin and 

Trust expenses not assumed by the 

Sponsor and other liabilities; (4) selling 

bitcoin as necessary in connection with 

redemptions; (5) delivering cash and/or 

bitcoin in exchange for Baskets 

surrendered for redemption; (6) 

maintaining insurance coverage for the 

bitcoin held by the Trust; and (7) 

securing the bitcoin held by the Trust. 

According to the Registration 

Statement, the Trust is neither an 

investment company registered under 

the Investment Company Act of 1940, as 

amended,7 nor a commodity pool for 

purposes of the Commodity Exchange 

Act (‘‘CEA’’),8 and neither the Trust nor 

the Sponsor is subject to regulation as 

a commodity pool operator or a 

commodity trading adviser in 

connection with the Shares. 

Investment Objective 

According to the Registration 

Statement and as further described 

below, the investment objective of the 

Trust is for the Shares to reflect the 

performance of the price of bitcoin, less 

the expenses of the Trust’s operations. 

The Trust intends to achieve this 

objective by investing substantially all 

of its assets in bitcoin traded primarily 

in the over-the-counter (‘‘OTC’’) 

markets, though the Trust may also 

invest in bitcoin traded on domestic and 

international bitcoin exchanges, 

depending on liquidity and otherwise at 

the Trust’s discretion. The Trust is not 

actively managed. It does not engage in 

any activities designed to obtain a profit 

from, or to ameliorate losses caused by, 

changes in the price of bitcoin. 

Investment in bitcoin 

Subject to certain requirements and 

conditions described below and in the 

Registration Statement, the Trust, under 

normal market conditions,9 will use 

available offering proceeds to purchase 

bitcoin primarily in the OTC markets, 

without being leveraged or exceeding 

relevant position limits. 

bitcoin and the bitcoin Industry 

General 

The following is a brief introduction 

to the global bitcoin market. The data 

presented below are derived from 

information released by various thirdparty sources, including white papers, 

other published materials, research 

reports and regulatory guidance. 

The bitcoin Network 

A bitcoin is an asset that can be 

transferred among parties via the 

internet, but without the use of a central 

administrator or clearing agency. The 

term ‘‘decentralized’’ is often used in 

descriptions of bitcoin, in reference to 

bitcoin’s lack of necessity for 

administration by a central party. The 

Bitcoin Network (i.e., the network of 

computers running the software 

protocol underlying bitcoin involved in 

maintaining the database of bitcoin 

ownership and facilitating the transfer 

of bitcoin among parties) and the asset, 

bitcoin, are intrinsically linked and 

inseparable. Bitcoin was first described 

in a white paper released in 2008 and 

published under the name ‘‘Satoshi 

Nakamoto’’, and the protocol underlying 

bitcoin was subsequently released in 

2009 as open source software. 

bitcoin Ownership and the Blockchain 

To begin using bitcoin, a user may 

download specialized software referred 

to as a ‘‘bitcoin wallet’’. A user’s bitcoin 

wallet can run on a computer or 

smartphone. A bitcoin wallet can be 

used both to send and to receive bitcoin. 

Within a bitcoin wallet, a user will be 

able to generate one or more ‘‘bitcoin 

addresses’’, which are similar in 

concept to bank account numbers, and 

each address is unique. Upon generating 

a bitcoin address, a user can begin to 

transact in bitcoin by receiving bitcoin 

at his or her bitcoin address and sending 

it from his or her address to another 

user’s address. Sending bitcoin from one 

bitcoin address to another is similar in 

concept to sending a bank wire from one 

person’s bank account to another 

person’s bank account. 


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10Additional applications based on blockchain 

technology—both the blockchain underlying bitcoin 

as well as separate public blockchains incorporating 

similar characteristics of the blockchain underlying 

bitcoin—are currently in development by numerous 

entities, including financial institutions like banks. 

Balances of the quantity of bitcoin 

associated with each bitcoin address are 

listed in a database, referred to as the 

‘‘blockchain’’. Copies of the blockchain 

exist on thousands of computers on the 

Bitcoin Network throughout the 

internet. A user’s bitcoin wallet will 

either contain a copy of the blockchain 

or be able to connect with another 

computer that holds a copy of the 

blockchain. 

When a bitcoin user wishes to transfer 

bitcoin to another user, the sender must 

first request a bitcoin address from the 

recipient. The sender then uses his or 

her bitcoin wallet software, to create a 

proposed addition to the blockchain. 

The proposal would decrement the 

sender’s address and increment the 

recipient’s address by the amount of 

bitcoin desired to be transferred. The 

proposal is entirely digital in nature, 

similar to a file on a computer, and it 

can be sent to other computers 

participating in the Bitcoin Network. 

Such digital proposals are referred to as 

‘‘bitcoin transactions’’. Bitcoin 

transactions and the process of one user 

sending bitcoin to another should not be 

confused with buying and selling 

bitcoin, which is a separate process (as 

discussed below in ‘‘bitcoin Trading On 

Exchanges’’ and ‘‘bitcoin Trading Overthe-Counter’’). 

A bitcoin transaction is similar in 

concept to an irreversible digital check. 

The transaction contains the sender’s 

bitcoin address, the recipient’s bitcoin 

address, the amount of bitcoin to be 

sent, a confirmation fee and the sender’s 

digital signature. The sender’s use of his 

or her digital signature enables 

participants on the Bitcoin Network to 

verify the authenticity of the bitcoin 

transaction. 

A user’s digital signature is generated 

via usage of the user’s so-called ‘‘private 

key’’, one of two numbers in a so-called 

cryptographic ‘‘key pair’’. A key pair 

consists of a ‘‘public key’’ and its 

corresponding private key, both of 

which are lengthy numerical codes, 

derived together and possessing a 

unique relationship. 

Public keys are used to create bitcoin 

addresses. Private keys are used to sign 

transactions that initiate the transfer of 

bitcoin from a sender’s bitcoin address 

to a recipient’s bitcoin address. Only the 

holder of the private key associated with 

a particular bitcoin address can digitally 

sign a transaction proposing a transfer of 

bitcoin from that particular bitcoin 

address. 

A user’s bitcoin address (which is 

derived from a public key) may be safely 

distributed, but a user’s private key 

must remain known solely by its 

rightful owner. The utilization of a 

private key is the only mechanism by 

which a bitcoin user can create a digital 

signature to transfer bitcoin from him or 

herself to another user. Additionally, if 

a malicious third party learns of a user’s 

private key, that third party could forge 

the user’s digital signature and send the 

user’s bitcoin to any arbitrary bitcoin 

address (i.e., the third party could steal 

the user’s bitcoin). 

When a bitcoin holder sends bitcoin 

to a destination bitcoin address, the 

transaction is initially considered 

unconfirmed. Confirmation of the 

validity of the transaction involves 

verifying the signature of the sender, as 

created by the sender’s private key. 

Confirmation also involves verifying 

that the sender has not ‘‘double spent’’ 

the bitcoin (e.g., confirming Party A has 

not attempted to send the same bitcoin 

both to Party B and to Party C). The 

confirmation process occurs via a 

process known as ‘‘bitcoin mining’’. 

Bitcoin mining utilizes a combination 

of computer hardware and software to 

accomplish a dual purpose: (i) To verify 

the authenticity and validity of bitcoin 

transactions (i.e., the movement of 

bitcoin between addresses) and (ii) the 

creation of new bitcoin. Neither the 

Sponsor nor the Trust intends to engage 

in bitcoin mining. 

Bitcoin miners do not need 

permission to participate in verifying 

transactions. Rather, miners compete to 

solve a prescribed and complicated 

mathematical calculation using 

computers dedicated to the task. Rounds 

of the competition repeat approximately 

every ten minutes. In any particular 

round of the competition, the first miner 

to find the solution to the mathematical 

calculation is the miner who gains the 

privilege of announcing the next block 

to be added to the blockchain. 

A new block that is added to the 

blockchain serves to take all of the 

recent-yet-unconfirmed transactions and 

verify that none are fraudulent. The 

recent-yet-unconfirmed transactions 

also generally contain transaction fees 

that are awarded to the miner who 

produces the block in which the 

transactions are inserted, and thereby 

confirmed. The successful miner also 

earns the so-called ‘‘block reward’’, an 

amount of newly created bitcoin. Thus, 

bitcoin miners are financially 

incentivized to conduct their work. The 

financial incentives received by bitcoin 

miners are a vital part of the process by 

which the Bitcoin Network functions. 

Upon successfully winning a round of 

the competition (winning a round is 

referred to as mining a new block), the 

miner then transmits a copy of the 

newly-formed block to peers on the 

Bitcoin Network, all of which then 

update their respective copies of the 

blockchain by appending the new block, 

thereby acknowledging the confirmation 

of the transactions that had previously 

existed in an unconfirmed state. 

A recipient of bitcoin must wait until 

a new block is formed in order to see the 

transaction convert from an 

unconfirmed state to a confirmed state. 

According to the Registration Statement, 

with new rounds won approximately 

every ten minutes, the average wait time 

for a confirmation is five minutes. 

The protocol underlying bitcoin 

provides the rules by which all users 

and miners on the Bitcoin Network 

must operate. A user or miner 

attempting to operate under a different 

set of rules will be ignored by other 

network participants, thus rendering 

that user’s or miner’s behavior moot. 

The protocol also lays out the block 

reward, the amount of bitcoin that a 

miner earns upon creating a new block. 

The initial block reward when Bitcoin 

was introduced in 2009 was 50 bitcoin 

per block. That number has and will 

continue to halve approximately every 

four years until approximately 2140, 

when it is estimated that block rewards 

will go to zero. The most recent halving 

occurred on July 9, 2016, which reduced 

the block reward from 25 to 12.5 

bitcoin. The next halving is projected 

for June 2020, which will reduce the 

block reward to 6.25 bitcoin from its 

current level of 12.5. The halving 

thereafter will occur in another four 

years and will reduce the block reward 

to 3.125 bitcoin, and so on. As of May 

2018, there are approximately 17 

million bitcoin that have been created, 

a number that will grow with certainty 

to a maximum of 21 million, estimated 

to occur by the year 2140. Bitcoin 

mining should not be confused with 

buying and selling bitcoin, which, as 

discussed below, is a separate process. 

Use of bitcoin and the Blockchain 

Beyond using bitcoin as a value 

transfer mechanism, applications 

related to the blockchain technology 

underlying bitcoin have become 

increasingly prominent.10 Blockchainfocused applications take advantage of 

certain unique characteristics of the 

blockchain such as secure time 

stamping (secure time stamps are on 

newly created blocks), highly redundant 

storage (copies of the blockchain are 

distributed throughout the internet) and 


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tamper-resistant data secured by secure 

digital signatures. 

According to the Registration 

Statement, blockchain-focused 

applications in usage and under 

development include, but are not 

limited to asset title transfer, secure 

timestamping, counterfeit and fraud 

detection systems, secure document and 

contract signing, distributed cloud 

storage and identity management. 

Although value transfer is not the 

primary purpose for blockchain-focused 

applications, the usage of bitcoin, the 

asset, is inherently involved in 

blockchain-focused applications, thus 

linking the growth and adoption of 

bitcoin to the growth and adoption of 

blockchain-focused applications. 

bitcoin Trading Over-the-Counter 

As referenced above, OTC trading of 

bitcoin is generally accomplished via 

bilateral agreements on a principal-toprincipal basis. All risks and issues of 

credit are between the parties directly 

involved in the transaction. The OTC 

market provides a relatively flexible 

market in terms of quotes, price, size 

and other factors. The OTC market has 

no formal structure and no open-outcry 

meeting place. Parties engaging in OTC 

transactions will agree upon a price— 

often via phone or email—and one of 

the two parties would then initiate the 

transaction. For example, a seller of 

bitcoin could initiate the transaction by 

sending the bitcoin to the buyer’s 

bitcoin address. The buyer would then 

wire U.S. dollars to the seller’s bank 

account. 

Based on its observations and 

experience in the market, the Sponsor 

estimates that the U.S. dollar OTC 

bitcoin trading volume globally 

represents on average approximately 

fifty percent of the trading volume of 

bitcoin traded globally in U.S. dollars 

on U.S. dollar-denominated bitcoin 

exchanges. 

According to the Registration 

Statement, transaction costs in the OTC 

market are negotiable between the 

parties and therefore vary with some 

participants willing to offer competitive 

prices for larger volumes, although this 

will vary according to market 

conditions. Cost indicators can be 

obtained from OTC trading platforms as 

well as various information service 

providers, such as the bitcoin price 

indexes and bitcoin exchanges. OTC 

trading tends to be in large blocks of 

bitcoin and between institutions. 

The Trust intends to buy and sell 

bitcoin in the OTC bitcoin market. The 

Sponsor currently expects that often it 

will be more cost efficient for the Trust 

to effect large trades (e.g., $500,000 or 

greater) in the OTC market rather than 

on a bitcoin exchange. The Trust 

therefore expects to conduct most of its 

trading in the OTC bitcoin market, 

primarily on the OTC platforms that 

comprise the MVIS® Bitcoin OTC Index 

(‘‘MVBTCO’’). 

When buying and selling bitcoin in 

the OTC market, the Trust will consider 

various market factors, including the 

total U.S. dollar size of the trade, the 

volume of bitcoin traded across the 

various U.S. dollar-denominated bitcoin 

exchanges during the preceding 24-hour 

period, available liquidity offered by 

OTC market participants, and the bid 

and ask quotes offered by OTC market 

participants. The Trust’s goal is to fill an 

order at the best possible price. 

While the Trust intends to conduct 

the majority of its trading in the OTC 

market on the OTC platforms that 

comprise the MVBTCO, the Trust also 

maintains an internal proprietary 

database, which it does not share with 

anyone, of potential OTC bitcoin trading 

counterparties, including hedge funds, 

family offices, private wealth managers 

and high-net-worth individuals. All 

such potential counterparties will be 

subject to the Trust’s anti-money 

laundering (‘‘AML’’) and know your 

customer (‘‘KYC’’) compliance 

procedures. The Trust will begin trading 

with such potential OTC counterparties 

as their trading capabilities become 

viable. The Trust will also add 

additional potential counterparties to its 

internal proprietary database as it 

becomes aware of additional market 

participants. The Trust will decide 

which OTC counterparties it will trade 

with based on its ability to fill orders at 

the best available price amongst OTC 

market participants. 

To the extent a Basket creation or 

redemption order necessitates the 

buying or selling of a large block of 

bitcoin (e.g., an amount that if an order 

were placed on an exchange would 

potentially move the price of bitcoin), 

the Sponsor represents that placing such 

a trade in the OTC market may be 

advantageous to the Trust. OTC trades 

help avoid factors such as potential 

price slippage (causing the price of 

bitcoin to move as the order is filled on 

the exchange), while offering speed in 

trade execution and settlement (an OTC 

trade can be executed immediately upon 

agreement of terms between 

counterparties) and privacy (to avoid 

other market participants entering 

trades in advance of a large block order). 

OTC bitcoin trading is typically private 

and not regularly reported. The Trust 

does not intend to report its OTC 

trading. The Trust has established 

delivery-versus-payment like (‘‘DVP’’) 

and receive-versus-payment like 

(‘‘RVP’’) trading arrangements with its 

trading counterparties pursuant to 

which the Trust will be able to 

minimize counterparty risk. These 

arrangements are on a trade-by-trade 

basis and do not bind the Trust to 

continue to trade with any counterparty. 

The Trust expects to take custody of 

bitcoin within one business day of 

receiving an order from an Authorized 

Participant to create a Basket (as defined 

in ‘‘Creation and Redemption of Shares’’ 

below). 

bitcoin Price Index 

MVBTCO Index. The MVBTCO 

represents the value of one bitcoin in 

U.S. dollars at any point in time. The 

index also generates a closing price as 

of 4:00 p.m., Eastern time (‘‘E.T.’’), each 

weekday, which is used to calculate the 

Trust’s NAV. The index price and the 

closing price are calculated using the 

same methodology. The intra-day levels 

of the MVBTCO incorporate the realtime price of bitcoin based on 

executable bids and asks derived from 

constituent bitcoin OTC platforms that 

have entered into an agreement with 

MV Index Solutions GmbH (‘‘MVIS’’) to 

provide such information. The intra-day 

price and closing level of the MVBTCO 

is calculated using a proprietary 

methodology collecting executable bid/ 

ask spreads and calculating a mid-point 

price from several U.S.-based bitcoin 

OTC platforms and is published at or 

after 4:00 p.m., E.T., each weekday. The 

MVBTCO is published to two decimal 

places rounded on the last digit. 

MVIS is the index sponsor and 

calculation agent for the MVBTCO. The 

Sponsor has entered into a licensing 

agreement with MVIS to use the 

MVBTCO. The Trust is entitled to use 

the MVBTCO pursuant to a sublicensing arrangement with the Sponsor. 

The MVBTCO calculates the intra-day 

price of bitcoin every 15 seconds, 

including the closing price as of 4:00 

p.m. E.T. The bitcoin OTC platforms 

included in the MVBTCO are U.S.-based 

entities. These platforms are well 

established institutions that comply 

with AML and KYC regulatory 

requirements with respect to trading 

counterparties and include entities that 

are regulated by the SEC and FINRA as 

registered broker-dealers and affiliates 

of broker-dealers. 

The logic utilized for the derivation of 

the intra-day and daily closing index 

level for the MVBTCO is intended to 

analyze actual executable bid/ask 

spread data, verify and refine the data 

set and yield an objective, fair-market 

value of one bitcoin throughout the day 

and as of 4:00 p.m. E.T. each weekday, 


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priced in U.S. dollars. As discussed 

herein, the MVBTCO intra-day price 

and the MVBTCO closing price are 

collectively referred to as the MVBTCO 

price, unless otherwise noted. 

The key elements of the algorithm 

underlying the MVBTCO include: 

• Equal Weighting of OTC Platforms: 

This mitigates the impact of spikes at 

single platforms. 

• Using executable bid/ask spreads 

and the respective mid-point prices, 

which are consistently available. 

The Sponsor is not aware of any 

bitcoin derivatives currently trading 

based on the MVBTCO. 

bitcoin Exchanges 

Bitcoin exchanges operate websites 

that facilitate the purchase and sale of 

bitcoin for various government-issued 

currencies, including the U.S. dollar, 

the euro or the Chinese yuan. Activity 

on bitcoin exchanges should not be 

confused with the process of users 

sending bitcoin from one bitcoin 

address to another bitcoin address, the 

latter being an activity that is wholly 

within the confines of the Bitcoin 

Network and the former being an 

activity that occurs entirely on private 

websites. 

Bitcoin exchanges operate in a 

manner that is unlike the traditional 

capital markets infrastructure in the 

U.S. and in other developed nations. 

Bitcoin exchanges combine the process 

of order matching, trade clearing, trade 

settlement and custody into a single 

entity. For example, a user can send 

U.S. dollars via wire to a bitcoin 

exchange and then visit the exchange’s 

website to purchase bitcoin. The 

entirety of the transaction—from trade 

to clearing to settlement to custody (at 

least temporary custody)—is 

accomplished by the bitcoin exchange 

in a matter of seconds. The user can 

then withdraw the purchased bitcoin 

into a wallet to take custody of the 

bitcoin directly. 

According to the Registration 

Statement, there are currently several 

U.S.-based regulated entities that 

facilitate bitcoin trading and that 

comply with state and/or U.S. AML and 

KYC regulatory requirements. While the 

Commodity Futures Trading Commision 

(the ‘‘CFTC’’) is responsible for 

regulating the bitcoin spot market with 

respect to fraud and manipulation—in 

the same way that it regulates the spot 

market for gold, silver or other exempt 

commodities—there is no direct, 

comprehensive federal oversight of 

bitcoin exchanges or trading platforms 

in the United States and no U.S. 

exchanges are registered with the 

Commission or the CFTC. 

• GDAX (f/k/a Coinbase), which is 

based in California, is a bitcoin 

exchange that maintains money 

transmitter licenses in over thirty states, 

the District of Columbia and Puerto 

Rico. GDAX is subject to the regulations 

enforced by the various State agencies 

that issued their respective money 

transmitter licenses to GDAX. The New 

York Department of Financial Services 

(‘‘NYDFS’’) granted a BitLicense to 

GDAX in January 2017. 

• itBit is a bitcoin exchange that was 

granted a limited purpose trust 

company charter by the NYDFS in May 

2015. Limited purpose trusts, according 

to the NYDFS, are permitted to 

undertake certain activities, such as 

transfer agency, securities clearance, 

investment management, and custodial 

services, but without the power to take 

deposits or make loans. 

• Gemini is a bitcoin exchange that is 

also regulated by the NYDFS. In October 

2015, NYDFS granted Gemini an 

Authorization Certificate, which allows 

Gemini to operate as a limited purpose 

trust company. 

• Genesis Global Trading is a FINRA 

member firm that makes a market in 

bitcoin by offering two-sided liquidity 

(‘‘Genesis Global Trading’’). In May 

2018, NYDFS granted Genesis Global 

Trading a BitLicense. 

• bitFlyer is a virtual currency 

exchange that is registered in Japan. In 

November 2017, NYDFS granted Tokyobased bitFlyer a BitLicense. 

Bitcoin are traded with publicly 

disclosed valuations for each 

transaction, measured by one or more 

government currencies such as the U.S. 

dollar, the euro or the Chinese yuan. 

Bitcoin exchanges typically report 

publicly on their site the valuation of 

each transaction and bid and ask prices 

for the purchase or sale of bitcoin. 

Although each bitcoin exchange has its 

own market price, it is expected that 

most bitcoin exchanges’ market prices 

should be relatively consistent with the 

bitcoin exchange market average since 

market participants can choose the 

bitcoin exchange on which to buy or sell 

bitcoin (i.e., exchange shopping). 

bitcoin Trading on Exchanges 

According to the Registration 

Statement, to the extent the Trust 

conducts bitcoin trading on an 

exchange, it expects to do so on the 

following U.S. dollar-denominated 

bitcoin exchanges: Bitstamp (located in 

Slovenia and with an office in the U.K.), 

GDAX (f/k/a Coinbase) (located in 

California), Gemini (located in New 

York), itBit (located in New York), 

bitFlyer (located in New York) and 

Kraken (located in San Francisco). All of 

these exchanges follow AML and KYC 

regulatory requirements. 

bitcoin Price Transparency 

In addition to the price transparency 

of the MVBTCO, with respect to the 

OTC market, and the bitcoin exchange 

market itself, the Trust will provide 

information regarding the Trust’s 

bitcoin holdings as well as additional 

data regarding the Trust. The Sponsor 

expects that the dissemination of 

information on the Trust’s website, 

along with quotations for and last-sale 

prices of transactions in the Shares and 

the intra-day indicative value (‘‘IIV’’) 

and net asset value (‘‘NAV’’) of the Trust 

will help to reduce the ability of market 

participants to manipulate the bitcoin 

market or the price of the Shares and 

that the Trust’s arbitrage mechanism 

will facilitate the correction of price 

discrepancies in bitcoin and the Shares. 

The Sponsor believes that demand from 

new, larger investors accessing bitcoin 

through investment in the Shares will 

broaden the investor base in bitcoin, 

which could further reduce the 

possibility of collusion among market 

participants to manipulate the bitcoin 

market. The Sponsor expects that the 

Shares will be purchased primarily by 

institutional and other substantial 

investors (such as hedge funds, family 

offices, private wealth managers and 

high-net-worth individuals), which will 

provide additional liquidity and 

transparency to the bitcoin market in a 

regulated vehicle such as the Trust. 

According to the Sponsor, the 

MVBTCO’s methodology decreases the 

influence on the MVBTCO of any 

particular OTC platform that diverges 

from the rest of the data points used by 

the MVBTCO, which reduces the 

possibility of an attempt to manipulate 

the price of bitcoin as reflected by the 

MVBTCO. 

Historical Price of bitcoin 

The price of bitcoin is volatile and 

fluctuations are expected to have a 

direct impact on the value of the Shares. 

However, movements in the price of 

bitcoin in the past are not a reliable 

indicator of future movements. 

Movements may be influenced by 

various factors, including supply and 

demand, geo-political uncertainties, 

economic concerns such as inflation 

and real or speculative investor interest. 

Additional bitcoin Trading Products 

Certain U.S. platforms and non-U.S. 

based bitcoin exchanges offer derivative 

products on bitcoin such as options, 

swaps and futures. 

According to the Registration 

Statement, BitMex, based in the 


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11See ‘‘In the Matter of Coinflip, Inc.’’ 

(‘‘Coinflip’’) (CFTC Docket 15–29 (September 17, 

2015)) (order instituting proceedings pursuant to 

Sections 6(c) and 6(d) of the CEA, making findings 

and imposing remedial sanctions), in which the 

CFTC stated the following: 

‘‘Section 1a(9) of the CEA defines ‘commodity’ to 

include, among other things, ‘all services, rights, 

and interests in which contracts for future delivery 

are presently or in the future dealt in.’ 7 U.S.C. 

1a(9). The definition of a ‘commodity’ is broad. See, 

e.g., Board of Trade of City of Chicago v. SEC, 677 

F. 2d 1137, 1142 (7th Cir. 1982). Bitcoin and other 

virtual currencies are encompassed in the definition 

and properly defined as commodities.’’ 

Republic of Seychelles, CryptoFacilites, 

based in the United Kingdom, 796 

Exchange, based in China, and OKCoin 

Exchange China all offer futures 

contracts settled in bitcoin. Coinut, 

based in Singapore, offers bitcoin binary 

options and vanilla options based on the 

Coinut index. Deribit, based in the 

Netherlands, offers vanilla options and 

futures contracts settled in bitcoin. 

IGMarkets, based in the United 

Kingdom, Avatrade, based in Ireland, 

and Plus500, based in Israel, all offer 

bitcoin derivative products. 

In July 2017, the CFTC issued an 

order granting LedgerX, LLC 

(‘‘LedgerX’’) registration as a derivatives 

clearing organization under the CEA. 

Under the order, LedgerX is authorized 

to provide clearing services for fullycollateralized digital currency swaps. 

LedgerX, which was also granted an 

order of registration as a Swap 

Execution Facility in July 2017, is the 

first federally-regulated exchange and 

clearing house for derivatives contracts 

settling in digital currencies. LedgerX 

began trading options and swaps on its 

platform in October 2017. 

The CFTC commissioners have 

expressed publicly that derivatives 

based on bitcoin are subject to 

regulation by the CFTC, including 

oversight to prevent market 

manipulation of the price of bitcoin. In 

addition, the CFTC has stated that 

bitcoin and other virtual currencies are 

encompassed in the definition of 

commodities under the CEA.11 While 

the CFTC does not regulate the bitcoin 

spot market—in the same way that it 

does not regulate the spot market for 

gold, silver or other exempt 

commodities—it is nevertheless 

responsible for overseeing and enforcing 

the CEA as it applies to trading in 

bitcoin derivatives. Further to this 

point, Cboe Futures Exchange, LLC and 

Chicago Mercantile Exchange, Inc. selfcertified bitcoin futures contracts with 

the CFTC and began offering trading in 

December 2017 and Cantor Futures 

Exchange L.P. self-certified bitcoin 

swaps in December 2017. 

In May 2015, the Swedish FSA 

approved the prospectus for ‘‘Bitcoin 

Tracker One’’, an open-ended exchangetraded note that tracks the price of 

bitcoin in U.S. dollars. The Bitcoin 

Tracker One initially traded in Swedish 

krona on the Nasdaq Nordic in 

Stockholm, but is now also available to 

trade in euro. The Bitcoin Tracker One 

is available to retail investors in the 

European Union and to those investors 

in the U.S. who maintain brokerage 

accounts with Interactive Brokers. 

Founded in 2013, Bitcoin Investment 

Trust, a private, open-ended trust 

available to accredited investors, is 

another investment vehicle that derives 

its value from the price of bitcoin. 

Eligible shares of the Bitcoin Investment 

Trust are quoted on the OTCQX 

marketplace under the symbol ‘‘GBTC’’. 

In May 2016, the Gibraltar Financial 

Services Commission approved the 

BitcoinETI, which in July 2016 was 

listed on the Gibraltar Stock Exchange 

and on Deutsche Bo ̈rse Frankfurt in 

August 2016. The BitcoinETI is a 

bitcoin-backed exchange-traded 

instrument that is euro denominated. 

bitcoin Security and Storage for the 

Trust 

According to the Sponsor, given the 

novelty and unique digital 

characteristics (as set forth above) of 

bitcoin as an innovative asset class, 

traditional custodians who normally 

custody assets do not currently offer 

custodial services for bitcoin. 

Accordingly, the Trust will secure 

bitcoin using multi-signature ‘‘cold 

storage wallets’’, an industry best 

practice. A cold storage wallet is created 

and stored on a computer with no 

access to a network, i.e., an ‘‘airgapped’’ computer with no ability to 

access the internet. Such a computer is 

isolated from any network, including 

local or internet connections. A multisignature address is an address 

associated with more than one private 

key. For example, a ‘‘2 of 3’’ address 

requires two signatures (out of three) 

from two separate private keys (out of 

three) to move bitcoin from a sender 

address to a receiver address. 

The Trust will utilize bitcoin private 

keys that are generated and stored on 

air-gapped computers. The movement of 

bitcoin will require physical access to 

the air-gapped computers and use of 

multiple authorized signers. For backup 

and disaster recovery purposes, the 

Trust will maintain cold storage wallet 

backups in locations geographically 

distributed throughout the United 

States, including in the Northeast and 

Midwest. 

In addition to its security system, the 

Trust will maintain comprehensive 

insurance coverage underwritten by 

various insurance carriers. The purpose 

of the insurance is to protect investors 

against loss or theft of the Trust’s 

bitcoin. The insurance will cover loss of 

bitcoin by, among other things, theft, 

destruction, bitcoin in transit, computer 

fraud and other loss of the private keys 

that are necessary to access the bitcoin 

held by the Trust. The coverage is 

subject to certain terms, conditions and 

exclusions, as discussed in the 

Registration Statement. The insurance 

policy will carry initial limits of $25 

million in primary coverage and $100 

million in excess coverage, with the 

ability to increase coverage depending 

on the value of the bitcoin held by the 

Trust. To the extent the value of the 

Trust’s bitcoin holdings exceeds the 

total $125,000,000 of insurance 

coverage, the Sponsor has made 

arrangements for additional insurance 

coverage with the goal of maintaining 

insurance coverage at a one-to-one ratio 

with the Trust’s bitcoin holdings valued 

in U.S. dollars such that for every dollar 

of bitcoin held by the Trust there is an 

equal amount of insurance coverage. 

The Sponsor expects that the Trust’s 

auditor will verify the existence of 

bitcoin held in custody by the Trust. In 

addition, the Trust’s insurance carriers 

will have inspection rights associated 

with the bitcoin held in custody by the 

Trust. 

bitcoin Market Price 

In the ordinary course of business, the 

Administrator will value the bitcoin 

held by the Trust based on the closing 

price set by the MVBTCO or one of the 

other pricing sources set forth below 

(each, a ‘‘bitcoin Market Price’’) as of 

4:00 p.m. E.T., on the valuation date on 

any day that the Exchange is open for 

regular trading. For further detail, see (i) 

below. If for any reason, and as 

determined by the Sponsor, the 

Administrator is unable to value the 

Trust’s bitcoin using the procedures 

described in (i), the Administrator will 

value the Trust’s bitcoin using the 

cascading set of rules set forth in (ii) 

through (iv) below. For the avoidance of 

doubt, the Administrator will employ 

the below rules sequentially and in the 

order as presented, should the Sponsor 

determine that one or more specific 

rule(s) fails. The Sponsor may 

determine that a rule has failed if a 

pricing source is unavailable or, in the 

judgment of the Sponsor, is deemed 

unreliable. To the extent the 

Administrator uses any of the cascading 

set of rules, the Sponsor will make 

public on the Trust’s website the rule 

being used. 

(i) Except as further described below, 

the bitcoin Market Price will be: The 


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price set by the MVBTCO as of 4:00 p.m. 

E.T., on the valuation date. The 

MVBTCO is a real-time U.S. dollardenominated composite reference rate 

for the price of bitcoin. The MVBTCO 

calculates the intra-day price of bitcoin 

every 15 seconds, including the closing 

price as of 4:00 p.m. E.T. The intra-day 

price and closing price are based on a 

methodology that consists of collecting 

actual executable bid/ask spreads and 

calculating a mid-point price from 

constituent bitcoin OTC platforms that 

have entered into an agreement with 

MVIS. The logic utilized for the 

derivation of the daily closing index 

level for the MVBTCO is intended to 

analyze actual executable bid/ask 

spread data, verify and refine the data 

set, and yield an objective, fair-market 

value of one bitcoin throughout the day 

and as of 4:00 p.m. E.T. each weekday, 

priced in U.S. dollars. 

(ii) In the event that rule (i) above 

fails, the bitcoin Market Price will be: 

The mid-point price between the bid/ 

ask obtained by the Sponsor from any 

one of the bitcoin OTC platforms 

included within the MVBTCO index as 

of 4:00 p.m. E.T., on the valuation date. 

(iii) In the event that rules (i) and (ii) 

above fail, the bitcoin Market Price will 

be: The volume weighted average 

bitcoin price for the immediately 

preceding 24-hour period at 4:00 p.m. 

E.T. on the valuation date as published 

by an alternative third party’s public 

data feed that the Sponsor determines is 

reasonably reliable, subject to the 

requirement that such data is calculated 

based upon a volume weighted average 

bitcoin price obtained from the major 

U.S. dollar-denominated bitcoin 

exchanges (‘‘Second Source’’). Subject 

to the next sentence, if the Second 

Source becomes unavailable (e.g., data 

sources from the Second Source for 

bitcoin prices become unavailable, 

unwieldy or otherwise impractical for 

use), or if the Sponsor determines in 

good faith that the Second Source does 

not reflect an accurate bitcoin price, 

then the Sponsor will, on a best efforts 

basis, contact the Second Source in an 

attempt to obtain the relevant data. If 

after such contact the Second Source 

remains unavailable or the Sponsor 

continues to believe in good faith that 

the Second Source does not reflect an 

accurate bitcoin price, then the 

Administrator will employ the next rule 

to determine the bitcoin Market Price. 

(iv) In the event that rules (i), (ii), and 

(iii) above fail, the bitcoin Market Price 

will be: The Sponsor will use its best 

judgment to determine a good faith 

estimate of the bitcoin Market Price. 

The Trust 

According to the Registration 

Statement, the Trust will invest in 

bitcoin only. The Trust will either (i) 

cause the Sponsor to receive bitcoin 

from the Trust in such quantity as may 

be necessary to pay the Management Fee 

or (ii) sell bitcoin in such quantity as 

may be necessary to permit payment in 

cash of the Management Fee and other 

Trust expenses and liabilities not 

assumed by the Sponsor, such as the 

bitcoin Insurance Fee, bitcoin storage 

fees and salaries of Trust principals and 

employees. As a result, the amount of 

bitcoin sold will vary from time to time 

depending on the level of the Trust’s 

expenses and the market price of 

bitcoin. 

The Trust will pay the Sponsor a 

management fee as compensation for 

services performed on behalf of the 

Trust and for services performed in 

connection with maintaining the Trust. 

The Sponsor’s fee will be payable 

monthly in arrears and will be accrued 

daily. The bitcoin Insurance Fee will be 

payable by the Trust monthly in 

advance, as described in the 

Registration Statement. Bitcoin storage 

fees and salaries of Trust principals and 

employees will be payable monthly in 

arrears and will be accrued daily. 

In exchange for the Management Fee, 

the Sponsor has agreed to assume the 

following administrative and marketing 

expenses incurred by the Trust: Each of 

the Trustee’s, Administrator’s, Cash 

Custodian’s, Transfer Agent’s and 

Marketing Agent’s monthly fee and outof-pocket expenses and expenses 

reimbursable in connection with such 

service provider’s respective agreement; 

the marketing support fees and 

expenses; exchange listing fees; SEC 

registration fees; index license fees; 

printing and mailing costs; maintenance 

expenses for the Trust’s website; audit 

fees and expenses; and up to $100,000 

per annum in legal expenses. The Trust 

will be responsible for paying, or for 

reimbursing the Sponsor or its affiliates 

for paying, all the extraordinary fees and 

expenses, if any, of the Trust. The 

management fee to be paid to the 

Sponsor, the bitcoin Insurance Fee, the 

salaries of the Trust’s principals and 

employees and the expenses associated 

with custody of the Trust’s bitcoin are 

expected to be the only ordinary 

recurring operating expense of the 

Trust. 

Net Asset Value 

The NAV for the Trust will equal the 

market value of the Trust’s total assets, 

including bitcoin and cash, less 

liabilities of the Trust, which include 

estimated accrued but unpaid fees, 

expenses and other liabilities. Under the 

Trust’s proposed operational 

procedures, the Administrator will 

calculate the NAV on each business day 

that the Exchange is open for regular 

trading, as promptly as practicable after 

4:00 p.m. E.T. To calculate the NAV, the 

Administrator will use the closing price 

set for bitcoin by the MVBTCO or one 

of the other bitcoin Market Prices set 

forth above. The Administrator will also 

determine the NAV per Share by 

dividing the NAV of the Trust by the 

number of the Shares outstanding as of 

the close of trading on Regular Trading 

Hours, i.e., 9:30 a.m. to 4:00 p.m. E.T. 

(which includes the net number of any 

Shares deemed created or redeemed on 

such day). 

According to the Registration 

Statement, Authorized Participants (as 

defined in ‘‘Creation and Redemption of 

Shares’’ below), or their clients or 

customers, may have an opportunity to 

realize a riskless profit if they can create 

a Basket (as defined in ‘‘Creation and 

Redemption of Shares’’ below) at a 

discount to the public trading price of 

the Shares or can redeem a Basket at a 

premium over the public trading price 

of the Shares. The Sponsor expects that 

the exploitation of such arbitrage 

opportunities by Authorized 

Participants and their clients and 

customers will tend to cause the public 

trading price to track NAV per Share 

closely over time. Such arbitrage 

opportunities will not be available to 

holders of Shares who are not 

Authorized Participants. 

While the Trust’s investment 

objective is for the Shares to reflect the 

performance of the price of bitcoin, less 

expenses of the Trust’s operations, the 

Shares may trade in the secondary 

market at prices that are lower or higher 

relative to their NAV per Share for a 

number of reasons, including price 

volatility, trading volume, and closing 

of bitcoin trading platforms due to 

fraud, failure, security breaches or 

otherwise. 

The NAV per Share may fluctuate 

with changes in the market value of the 

bitcoin held by the Trust. The value of 

the Shares may be influenced by nonconcurrent trading hours between the 

Exchange and the various bitcoin OTC 

platforms comprising the MVBTCO. As 

a result, there will be periods when the 

Exchange is closed and the bitcoin OTC 

platforms continue to trade. Significant 

changes in the price of bitcoin during 

such time periods could result in a 

difference between the value of bitcoin 

as measured by the MVBTCO and the 

most recent NAV per Share or closing 

trading price. The Exchange, however, 


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12An Authorized Participant must: (1) Be a 

registered broker-dealer and a member in good 

standing with the Financial Industry Regulatory 

Authority (‘‘FINRA’’); (2) be a participant in 

Depository Trust Company (‘‘DTC’’). To become an 

Authorized Participant, a person must enter into an 

‘‘Authorized Participant Agreement’’ with the 

Sponsor and the Transfer Agent. The Authorized 

Participant Agreement provides the procedures for 

the creation and redemption of Baskets and for the 

delivery of the cash (and, potentially, bitcoin inkind) required for such creations and redemptions. 

expects that any meaningful divergence 

in the intraday price of the Shares and 

the MVTCO will be quickly arbitraged 

away when trading is available on the 

Exchange because when such a discount 

or premium exists, Authorized 

Participants will generally be able to 

create or redeem a Basket of Shares at 

a discount or a premium to the public 

trading price per Share. 

Impact on Arbitrage 

Investors and market participants are 

able throughout the trading day to 

compare the market price of the Shares 

and the Share’s IIV. If the market price 

of the Shares diverges significantly from 

the IIV, Authorized Participants will 

have strong economic incentive to 

execute arbitrage trades. Because of the 

potential for arbitrage inherent in the 

structure of the Trust, the Sponsor 

believes that the Shares will not trade at 

a material discount or premium to the 

underlying bitcoin held by the Trust. If 

the price of the Shares deviates enough 

from the price of bitcoin to create a 

material discount or premium, an 

arbitrage opportunity is created. If the 

Shares are inexpensive compared to the 

bitcoin that underlies them, an 

arbitrageur may buy the Shares at a 

discount, immediately redeem them in 

exchange for bitcoin, and sell the 

bitcoin in the cash market at a profit. If 

the Shares are expensive compared to 

the bitcoin that underlies them, an 

arbitrageur may sell the Shares short, 

buy enough bitcoin to acquire the 

number of Shares sold short, acquire the 

Shares through the creation process, and 

deliver the Shares to close out the short 

position. To facilitate the arbitrage 

process, Authorized Participants may 

source bitcoin through the OTC market 

or on exchanges; alternatively, 

Authorized Participants may create or 

redeem for cash and the Trust will 

source buyers and sellers of bitcoin in 

the OTC market. The arbitrage process, 

which in general provides investors the 

opportunity to profit from differences in 

prices of assets, increases the efficiency 

of the markets, serves to prevent 

potentially manipulative efforts, and 

can be expected to operate efficiently in 

the case of the Shares and bitcoin. 

Creation and Redemption of Shares 

According to the Registration 

Statement, the Trust will issue and 

redeem ‘‘Baskets’’, each equal to a block 

of 5 Shares, only to ‘‘Authorized 

Participants’’ (as described below). The 

size of a Basket is subject to change. The 

creation and redemption of a Basket 

require the delivery to the Trust, or the 

distribution by the Trust, of the number 

of whole and fractional bitcoins or the 

U.S. dollar equivalent represented by 

each Basket being created or redeemed, 

the number of which is determined by 

dividing the number of bitcoins owned 

by the Trust at such time by the number 

of Shares outstanding at such time 

(calculated to one one-hundredmillionth of one bitcoin), as adjusted for 

the number of whole and fractional 

bitcoins constituting accrued but unpaid 

fees and expenses of the Trust and 

multiplying the quotient obtained by 5 

(‘‘bitcoin Basket Amount’’). The bitcoin 

Basket Amount will gradually decrease 

over time as the Trust’s bitcoin are used 

to pay the Trust’s expenses. According 

to the Registration Statement, as of the 

date of the Registration Statement, each 

Share currently represents 

approximately 25 bitcoin. 

Orders to create and redeem Baskets 

may be placed only by Authorized 

Participants.12 A transaction fee will be 

assessed on all creation and redemption 

transactions effected in-kind. In 

addition, the Trust reserves the right to 

charge a variable transaction fee to the 

Authorized Participants for creations 

and redemptions effected in cash to 

cover the Trust’s expenses related to 

purchasing and selling bitcoin in the 

OTC market or on bitcoin exchanges if 

such expenses should exceed the fixed 

$1,000 transaction fee. The variable 

transaction fee would cover actual 

expenses paid for the purchase and sale 

of bitcoin in order that such expenses 

do not decrease the NAV of the Trust. 

Such expenses may vary, but the Trust 

expects such expenses, should they 

occur in the future, to constitute 1% or 

less of the value of a Basket. The 

creation and redemption of a Basket 

requires the delivery to the Trust, or the 

distribution by the Trust, of the bitcoin 

Basket Amount (that is, the number of 

bitcoins represented by each Basket or 

the U.S. dollar equivalent), for each 

Basket to be created or redeemed. The 

bitcoin Basket Amount multiplied by 

the number of Baskets being created or 

redeemed is the ‘‘Total bitcoin Basket 

Amount.’’ 

Creation Procedures 

On any business day, an Authorized 

Participant may place an order with the 

Transfer Agent to create one or more 

Baskets. For purposes of processing both 

purchase and redemption orders, a 

‘‘business day’’ means any day other 

than a day when the Exchange is closed 

for regular trading. Cash purchase 

orders must be placed by 3:00 p.m. E.T., 

or the close of regular trading on the 

Exchange, whichever is earlier, and inkind purchase orders must be placed by 

4:00 p.m. E.T., or the close of regular 

trading on the Exchange, whichever is 

earlier. The day on which the Transfer 

Agent receives a valid purchase order, 

as approved by the Marketing Agent, is 

the purchase order date. Purchase 

orders are irrevocable. By placing a 

purchase order, and prior to delivery of 

such Baskets, an Authorized 

Participant’s DTC account will be 

charged the non-refundable transaction 

fee due for the purchase order. 

Determination of Required Payment 

The total payment required to create 

each Basket is determined by 

calculating the NAV of 5 Shares of the 

Trust as of the closing time of the 

Exchange on the purchase order date. 

Baskets are issued as of 2:00 p.m., E.T., 

on the business day immediately 

following the purchase order date at the 

applicable NAV as of the closing time of 

the Exchange on the purchase order 

date, but only if the required payment 

has been timely received. 

Orders to purchase Baskets for cash 

must be placed no later than 3:00 p.m. 

E.T., or the close of regular trading on 

the Exchange, whichever is earlier, and 

orders to purchase Baskets in-kind must 

be placed no later than 4:00 p.m. E.T., 

or the close of regular trading on the 

Exchange, whichever is earlier. For cash 

creation orders, the total cash payment 

required to create a Basket will not be 

determined until approximately 4:00 

p.m., E.T. (the time at which the Trust’s 

NAV for that day is expected to be 

calculated) on the date the purchase 

order is received by the Transfer Agent 

and approved by the Marketing Agent. 

Authorized Participants therefore will 

not know the total amount of the 

payment required to create a Basket at 

the time they submit an irrevocable 

purchase order for the Basket. Valid 

cash orders to purchase Baskets 

received after 3:00 p.m. E.T., and valid 

in-kind orders to purchase Baskets 

received after 4:00 p.m. E.T., are 

considered received on the following 

business day. The NAV of the Trust, and 

thus the total amount of the payment 

required to create a Basket for cash 

could rise or fall substantially between 

the time an irrevocable purchase order 

is submitted and the time the amount of 

the purchase price in respect thereof is 

determined. Changes to the price of 


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bitcoin between the time an order is 

placed and the time the final price is 

determined by the Trust will be borne 

by the Authorized Participant and not 

by the Trust. 

The Sponsor makes available through 

the National Securities Clearing 

Corporation (‘‘NSCC’’) on each business 

day, prior to the opening of business on 

the Exchange (a) the amount of cash 

required for a cash creation of a Basket 

(the ‘‘Cash Basket Amount’’), based on 

100% of the NAV of the Shares per 

Basket as of the prior business day, 

which amount is applicable in order to 

effect cash purchases of Baskets until 

such time as the next announced 

amount is made available and (b) the 

bitcoin Basket Amount. 

The payment required to create a 

Basket typically will be made in cash, 

but it may also be made partially or 

wholly in-kind at the discretion of the 

Sponsor if the Authorized Participant 

requests to convey bitcoin directly to 

the Trust. For a cash order to create, the 

Authorized Participant must deliver the 

Cash Basket Amount to the Cash 

Custodian on the day the order is placed 

and accepted and, potentially, an 

amount of cash on the business day after 

the order is placed and approved 

referred to as the ‘‘Balancing Amount,’’ 

computed as described below. Upon 

delivery of the Cash Basket Amount and 

the Balancing Amount to the Cash 

Custodian, the Transfer Agent will 

cause the Trust to issue a Basket to the 

Authorized Participant. Expenses 

incurred by the Trust relating to 

purchasing bitcoin in assembling a cash 

creation Basket, such as OTC market 

fees, bitcoin exchange-related fees and/ 

or transaction fees, will be borne by 

Authorized Participants, rather than the 

Trust, through the transaction fee 

charged by the Trust. 

The Balancing Amount is an amount 

equal to the difference between the NAV 

of the Shares (per Basket) at the end of 

the business day the order is placed and 

approved and the Cash Basket Amount. 

The Balancing Amount serves to 

compensate for any difference between 

the NAV per Basket and the Cash Basket 

Amount. The Balancing Amount may be 

positive (in which case the Authorized 

Participant will be required to transfer 

the corresponding amount of cash to the 

Cash Custodian) or negative (in which 

case the amount of cash required to be 

transferred by the Authorized 

Participant will be less than the Cash 

Basket Amount, and if the Authorized 

Participant has already delivered the 

full Cash Basket Amount, the 

corresponding amount of cash will be 

returned to the Authorized Participant). 

Authorized Participants will be notified 

of the Balancing Amount that must be 

paid to the Cash Custodian or refunded 

by the Cash Custodian, if any, by 

approximately 4:00 p.m., E.T. on the 

business day the order is placed and 

approved. The Balancing Amount must 

be paid to the Cash Custodian no later 

than 2:00 p.m. E.T. on the business day 

following the date the order was placed 

and approved. Upon delivery of the 

Cash Basket Amount and Balancing 

Amount to the Cash Custodian, the 

Transfer Agent will cause the Trust to 

issue a Basket to the Authorized 

Participant the following business day 

by 2:00 p.m., E.T. 

To the extent the Authorized 

Participant places an in-kind order to 

create, the Authorized Participant must 

deliver the Bitcoin Basket Amount 

directly to the Trust (i.e., to the security 

system that holds the Trust’s bitcoin) no 

later than 4:00 p.m. E.T. on the date the 

purchase order is received and 

approved. Upon delivery of the bitcoin 

to the Trust’s security system, the 

Transfer Agent will cause the Trust to 

issue a Basket to the Authorized 

Participant the following business day 

by 2:00 p.m., E.T. Payment of any tax or 

other fees and expenses payable upon 

transfer of bitcoin shall be the sole 

responsibility of the Authorized 

Participant purchasing a Basket. 

Expenses incurred by Authorized 

Participants relating to purchasing 

bitcoin in assembling an in-kind 

creation Basket, such as OTC market 

fees, bitcoin exchange-related fees and/ 

or transaction fees, will be borne by 

Authorized Participants. 

The Administrator, by email or 

telephone correspondence, shall notify 

the Authorized Participant of the NAV 

of the Trust and the corresponding 

amount of cash (in the case of a cash 

purchase order) to be included in a 

Balancing Amount by approximately 

4:00 p.m. E.T. on the day the purchase 

order is placed and approved. 

Redemption Procedures 

The procedures by which an 

Authorized Participant can redeem one 

or more Baskets mirror the procedures 

for the creation of Baskets. On any 

business day, an Authorized Participant 

may place an order with the Transfer 

Agent to redeem one or more Baskets. 

Cash redemption orders must be placed 

no later than 3:00 p.m. E.T., or the close 

of regular trading on the New York 

Stock Exchange, whichever is earlier, 

and redemption orders submitted inkind must be placed by 4:00 p.m. E.T., 

or the close of regular trading on the 

Exchange, whichever is earlier. The day 

on which the Transfer Agent receives a 

valid redemption order, as approved by 

the Marketing Agent, is the ‘‘redemption 

order date.’’ Redemption orders are 

irrevocable. The redemption procedures 

allow only Authorized Participants to 

redeem Baskets. A shareholder may not 

redeem Baskets other than through an 

Authorized Participant. 

By placing a redemption order, an 

Authorized Participant agrees to deliver 

the Baskets to be redeemed through 

DTC’s book-entry system to the Trust 

not later than 4:00 p.m. E.T. on the 

business day immediately following the 

redemption order date. By placing a 

redemption order, and prior to receipt of 

the redemption proceeds, an Authorized 

Participant’s DTC account will be 

charged the non-refundable transaction 

fee due for the redemption order. 

Determination of Redemption Proceeds 

The redemption proceeds from the 

Trust consist of the ‘‘cash redemption 

amount’’ or, if making an in-kind 

redemption, bitcoin. The cash 

redemption amount is equal to the U.S. 

dollar equivalent of the Total bitcoin 

Basket Amount requested in the 

Authorized Participant’s redemption 

order as of the end of Regular Trading 

Hours on the redemption order date. 

The Cash Custodian will distribute the 

cash redemption amount at 4:00 p.m., 

E.T., on the business day immediately 

following the redemption order date 

through DTC to the account of the 

Authorized Participant as recorded on 

DTC’s book-entry system. The bitcoin 

redemption amount will be the Total 

bitcoin Basket Amount. At the 

discretion of the Sponsor and if the 

Authorized Participant requests to 

receive bitcoin directly, some or all of 

the redemption proceeds may be 

distributed to the Authorized 

Participant in-kind by the Trust. 

Orders to redeem Baskets must be 

placed no later than 3:00 p.m. E.T. for 

cash redemption orders and 4:00 p.m. 

E.T. for in-kind redemptions orders, but 

the total amount of redemption 

proceeds typically will not be 

determined until after 4:00 p.m. E.T. on 

the date the redemption order is 

received. Authorized Participants 

therefore will not know the total amount 

of the redemption proceeds at the time 

they submit an irrevocable redemption 

order. 

Delivery of Redemption Proceeds 

The redemption proceeds due from 

the Trust are delivered to the 

Authorized Participant at 4:00 p.m. E.T. 

on the business day immediately 

following the redemption order date if, 

by such time on such business day 

immediately following the redemption 

order date, the Trust’s DTC account has 


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13The bid-ask price of the Trust is determined 

using the highest bid and lowest offer on the 

Consolidated Tape as of the time of calculation of 

the closing day NAV. 

14For purposes of Rule 14.11(e)(4), the term 

commodity takes on the definition of the term as 

provided in the Commodity Exchange Act. As noted 

above, the CFTC has opined that Bitcoin is a 

commodity as defined in Section 1a(9) of the 

Commodity Exchange Act. See Coinflip. 

been credited with the Baskets to be 

redeemed. If the Trust’s DTC account 

has not been credited with all of the 

Baskets to be redeemed by such time, 

the redemption distribution is delivered 

to the extent of whole Baskets received. 

The Sponsor may, but is not obligated 

to, extend the redemption date with 

respect to a redemption order for which 

whole Baskets have not been delivered 

by the Authorized Participant. In such 

event, the Sponsor may charge the 

Authorized Participant a fee for such 

extension to reimburse the Trust for any 

losses incurred from the Authorized 

Participant’s failure to deliver whole 

Baskets (including, but not limited to, 

expenses incurred in selling bitcoin in 

respect of the redemption order and/or 

buying bitcoin back following the 

failure of the Authorized Participant to 

deliver whole Baskets, as well as losses 

to the Trust from movements in the 

market value of bitcoin between selling 

the bitcoin and buying it back). If the 

Sponsor extends the redemption date, 

any remainder of the redemption 

distribution is delivered on the next 

business day to the extent of remaining 

whole Baskets received if the Sponsor 

receives the fee applicable to the 

extension of the redemption distribution 

date and the remaining Baskets to be 

redeemed are credited to the Trust’s 

DTC account by 4:00 p.m. E.T. on such 

next business day. Any further 

outstanding amount of the redemption 

order shall be cancelled. 

The Sponsor makes available through 

the NSCC, prior to the opening of 

business on the Exchange on each 

business day, (a) for in-kind 

redemptions, the amount of bitcoin per 

Basket and (b) for cash redemptions, the 

amount of cash per Basket that will be 

applicable to redemption requests 

received in proper form. 

As with creation orders, the NAV of 

the Shares per Basket as of the day on 

which a redemption request is received 

and approved will be calculated after 

the deadline for redemption orders. The 

amount of cash payable per Basket for 

a cash redemption order accordingly 

will be calculated after the redemption 

order is received. The Administrator, by 

email or telephone correspondence, 

shall notify the Authorized Participant 

of the NAV of the Trust and the 

corresponding amount of cash (in the 

case of a cash redemption order) to be 

payable per Basket by approximately 

4:00 p.m. E.T. on the day the purchase 

order is placed and approved. 

To the extent the Authorized 

Participant places an in-kind order to 

redeem a Basket, the Trust will deliver, 

on the business day immediately 

following the day the redemption order 

is received, the Total bitcoin Basket 

Amount. Expenses relating to 

transferring bitcoin to an Authorized 

Participant in a redemption Basket will 

be borne by Authorized Participants via 

the redemption transaction fee. 

Availability of Information 

The Trust’s website will provide an 

IIV per Share updated every 15 seconds, 

as calculated by the Exchange or a third 

party financial data provider during the 

Exchange’s Regular Trading Hours (9:30 

a.m. to 4:00 p.m. E.T.). The IIV will be 

calculated by using the prior day’s 

closing NAV per Share as a base and 

updating that value during Regular 

Trading Hours to reflect changes in the 

value of the Trust’s bitcoin holdings 

during the trading day. 

The IIV disseminated during Regular 

Trading Hours should not be viewed as 

an actual real-time update of the NAV, 

which will be calculated only once at 

the end of each trading day. The IIV will 

be widely disseminated on a per Share 

basis every 15 seconds during the 

Exchange’s Regular Trading Hours by 

one or more major market data vendors. 

In addition, the IIV will be available 

through on-line information services. 

The website for the Trust, which will 

be publicly accessible at no charge, will 

contain the following information: (a) 

The current NAV per Share daily and 

the prior business day’s NAV and the 

reported closing price; (b) the mid-point 

of the bid-ask price 13 in relation to the 

NAV as of the time the NAV is 

calculated (‘‘Bid-Ask Price’’) and a 

calculation of the premium or discount 

of such price against such NAV; (c) data 

in chart form displaying the frequency 

distribution of discounts and premiums 

of the Bid-Ask Price against the NAV, 

within appropriate ranges for each of 

the four previous calendar quarters (or 

for the life of the Trust, if shorter); (d) 

the prospectus; and (e) other applicable 

quantitative information. The Trust will 

also disseminate the Trust’s holdings on 

a daily basis on the Trust’s website. The 

price of bitcoin will be made available 

by one or more major market data 

vendors, updated at least every 15 

seconds during Regular Trading Hours. 

Information about the MVBTCO, 

including key elements of how the 

MVBTCO is calculated, will be publicly 

available at www.mvis-indices.com/. 

The NAV for the Trust will be 

calculated by the Administrator once a 

day and will be disseminated daily to 

all market participants at the same time. 

To the extent that the Administrator has 

utilized the cascading set of rules 

described in ‘‘bitcoin Market Price’’ 

above, the Trust’s website will note the 

valuation methodology used and the 

price per bitcoin resulting from such 

calculation. Quotation and last-sale 

information regarding the Shares will be 

disseminated through the facilities of 

the Consolidated Tape Association 

(‘‘CTA’’). 

Quotation and last sale information 

for bitcoin is widely disseminated 

through a variety of major market data 

vendors, including Bloomberg and 

Reuters, as well as the MVBTCO. 

Information relating to trading, 

including price and volume 

information, in bitcoin is available from 

major market data vendors and from the 

exchanges on which bitcoin are traded. 

Depth of book information is also 

available from bitcoin exchanges. The 

normal trading hours for bitcoin 

exchanges are 24 hours per day, 365 

days per year. 

The Trust will provide website 

disclosure of its bitcoin holdings daily. 

The website disclosure of the Trust’s 

bitcoin holdings will occur at the same 

time as the disclosure by the Sponsor of 

the bitcoin holdings to Authorized 

Participants so that all market 

participants are provided such portfolio 

information at the same time. Therefore, 

the same portfolio information will be 

provided on the public website as well 

as in electronic files provided to 

Authorized Participants. Accordingly, 

each investor will have access to the 

current bitcoin holdings of the Trust 

through the Trust’s website. 

Rule 14.11(e)(4)—Commodity-Based 

Trust Shares 

The Shares will be subject to BZX 

Rule 14.11(e)(4), which sets forth the 

initial and continued listing criteria 

applicable to Commodity-Based Trust 

Shares. The Exchange will obtain a 

representation that the Trust’s NAV will 

be calculated daily and that these values 

and information about the assets of the 

Trust will be made available to all 

market participants at the same time. 

The Exchange notes that, as defined in 

Rule 14.11(e)(4)(C)(i), the Shares will be: 

(a) Issued by a trust that holds a 

specified commodity 14 deposited with 

the trust; (b) issued by such trust in a 

specified aggregate minimum number in 

return for a deposit of a quantity of the 

underlying commodity; and (c) when 


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aggregated in the same specified 

minimum number, may be redeemed at 

a holder’s request by such trust which 

will deliver to the redeeming holder the 

quantity of the underlying commodity. 

The Exchange notes that in addition to 

the in-kind creation and redemption 

processes described in Rule 

14.11(e)(4)(C)(i), the Trust will also offer 

creations and redemptions of Shares for 

cash in addition to creating and 

redeeming in-kind. The Trust represents 

that the ability to create and redeem for 

cash will allow APs that may otherwise 

be unwilling or unable to source bitcoin 

on their own behalf to participate in the 

creation and redemption of Shares. 

Upon termination of the Trust, the 

Shares will be removed from listing. 

The Trustee, Delaware Trust Company, 

is a trust company having substantial 

capital and surplus and the experience 

and facilities for handling corporate 

trust business, as required under Rule 

14.11(e)(4)(E)(iv)(a) and that no change 

will be made to the trustee without prior 

notice to and approval of the Exchange. 

The Exchange also notes that, pursuant 

to Rule 14.11(e)(4)(F), neither the 

Exchange nor any agent of the Exchange 

shall have any liability for damages, 

claims, losses or expenses caused by 

any errors, omissions or delays in 

calculating or disseminating any 

underlying commodity value, the 

current value of the underlying 

commodity required to be deposited to 

the Trust in connection with issuance of 

Commodity-Based Trust Shares; 

resulting from any negligent act or 

omission by the Exchange, or any agent 

of the Exchange, or any act, condition or 

cause beyond the reasonable control of 

the Exchange, its agent, including, but 

not limited to, an act of God; fire; flood; 

extraordinary weather conditions; war; 

insurrection; riot; strike; accident; 

action of government; communications 

or power failure; equipment or software 

malfunction; or any error, omission or 

delay in the reports of transactions in an 

underlying commodity. Finally, as 

required in Rule 14.11(e)(4)(G), the 

Exchange notes that any registered 

market maker (‘‘Market Maker’’) in the 

Shares must file with the Exchange in 

a manner prescribed by the Exchange 

and keep current a list identifying all 

accounts for trading in an underlying 

commodity, related commodity futures 

or options on commodity futures, or any 

other related commodity derivatives, 

which the registered Market Maker may 

have or over which it may exercise 

investment discretion. No registered 

Market Maker shall trade in an 

underlying commodity, related 

commodity futures or options on 

commodity futures, or any other related 

commodity derivatives, in an account in 

which a registered Market Maker, 

directly or indirectly, controls trading 

activities, or has a direct interest in the 

profits or losses thereof, which has not 

been reported to the Exchange as 

required by this Rule. In addition to the 

existing obligations under Exchange 

rules regarding the production of books 

and records (see, e.g., Rule 4.2), the 

registered Market Maker in CommodityBased Trust Shares shall make available 

to the Exchange such books, records or 

other information pertaining to 

transactions by such entity or registered 

or non-registered employee affiliated 

with such entity for its or their own 

accounts for trading the underlying 

physical commodity, related commodity 

futures or options on commodity 

futures, or any other related commodity 

derivatives, as may be requested by the 

Exchange. 

The Trust currently expects that there 

will be at least 100 Shares outstanding 

at the time of commencement of trading 

on the Exchange, which the Exchange 

believes to be sufficient to provide 

adequate market liquidity. Assuming a 

bitcoin price of $8,000 and 

approximately 25 bitcoin per Share, the 

Shares would be approximately 

$200,000 each. With a minimum of 100 

Shares outstanding, the market value of 

all Shares outstanding would be 

approximately $20,000,000. Rules 

14.11(e)(4)(C)(ii)(b) [sic] and (c) provide 

that the Exchange will commence 

delisting proceedings for a series of 

Commodity-Based Trust Shares where 

the applicable trust has fewer than 

50,000 receipts or the market value of 

all receipts issued and outstanding is 

less than $1,000,000, respectively, 

following the initial 12 month period 

following commencement of trading on 

the Exchange. These rules are designed 

to ensure that there are sufficient shares 

and market value outstanding to 

facilitate the creation and redemption 

process and ensure that the arbitrage 

mechanism will keep the price of a 

series of Commodity-Based Trust Shares 

in line with its NAV and prevent 

manipulation in the shares. The 

Exchange is proposing that Rule 

14.11(e)(4)(C)(ii)(b) [sic] would not 

apply to the Shares because the 

Exchange believes that such policy 

concerns are otherwise mitigated. The 

lower number of Shares is merely a 

function of price that will have no 

impact on the creation and redemption 

process and the arbitrage mechanism. 

Whether the Shares are priced equal to 

25 bitcoin with a Basket of 5 Shares or 

the Shares are priced equal to .025 

bitcoin with a Basket of 5,000 Shares, 

the cost to an AP to create or redeem 

will be the exact same and such a 

creation and redemption will have the 

same proportional impact on Shares and 

market value outstanding. Because the 

creation units and redemption units for 

most exchange-traded products are 

between 5,000 and 50,000 shares, it 

makes sense to apply a minimum 

number of shares outstanding to such 

products. Where a creation unit is 5 

shares, the policy concerns that Rule 

14.11(e)(4)(C)(ii)(b) [sic] is designed to 

address are mitigated even where there 

are significantly fewer shares 

outstanding. As such, the Exchange is 

proposing that it would not commence 

delisting proceedings for the Shares if 

the Shares do not satisfy Rule 

14.11(e)(4)(C)(ii)(b) [sic]. 

Trading Halts 

With respect to trading halts, the 

Exchange may consider all relevant 

factors in exercising its discretion to 

halt or suspend trading in the Shares. 

The Exchange will halt trading in the 

Shares under the conditions specified in 

BZX Rule 11.18. Trading may be halted 

because of market conditions or for 

reasons that, in the view of the 

Exchange, make trading in the Shares 

inadvisable. These may include: (1) The 

extent to which trading is not occurring 

in the bitcoin underlying the Shares; or 

(2) whether other unusual conditions or 

circumstances detrimental to the 

maintenance of a fair and orderly 

market are present. Trading in the 

Shares also will be subject to Rule 

14.11(e)(4)(E)(ii), which sets forth 

circumstances under which trading in 

the Shares may be halted. 

Trading Rules 

The Exchange deems the Shares to be 

equity securities, thus rendering trading 

in the Shares subject to the Exchange’s 

existing rules governing the trading of 

equity securities. BZX will allow trading 

in the Shares from 8:00 a.m. until 5:00 

p.m. Eastern Time. The Exchange has 

appropriate rules to facilitate 

transactions in the Shares during all 

trading sessions. As provided in BZX 

Rule 11.11(a) the minimum price 

variation for quoting and entry of orders 

in securities traded on the Exchange is 

$0.01 where the price is greater than 

$1.00 per share or $0.0001 where the 

price is less than $1.00 per share. 

Surveillance 

The Exchange believes that its 

surveillance procedures are adequate to 

properly monitor the trading of the 

Shares on the Exchange during all 

trading sessions and to deter and detect 


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15For a list of the current members and affiliate 

members of ISG, see www.isgportal.com. 16The Pre-Opening Session is from 8:00 a.m. to 

9:30 a.m. Eastern Time. 17The After Hours Trading Session is from 4:00 

p.m. to 5:00 p.m. Eastern Time. 

violations of Exchange rules and the 

applicable federal securities laws. 

Trading of the Shares through the 

Exchange will be subject to the 

Exchange’s surveillance procedures for 

derivative products, including 

Commodity-Based Trust Shares. The 

issuer has represented to the Exchange 

that it will advise the Exchange of any 

failure by the Trust or the Shares to 

comply with the continued listing 

requirements, and, pursuant to its 

obligations under Section 19(g)(1) of the 

Exchange Act, the Exchange will surveil 

for compliance with the continued 

listing requirements. If the Trust or the 

Shares are not in compliance with the 

applicable listing requirements, the 

Exchange will commence delisting 

procedures under Exchange Rule 14.12. 

The Exchange may obtain information 

regarding trading in the Shares and 

listed bitcoin derivatives via the 

Intermarket Surveillance Group (‘‘ISG’’), 

from other exchanges who are members 

or affiliates of the ISG, or with which 

the Exchange has entered into a 

comprehensive surveillance sharing 

agreement.15 In addition, the Exchange 

may obtain information about bitcoin 

transactions, trades and market data 

from bitcoin exchanges with which the 

Exchange has entered into a 

comprehensive surveillance sharing 

agreement as well as certain additional 

information that is publicly available 

through the Bitcoin blockchain. The 

Exchange notes that it has entered into 

a comprehensive surveillance sharing 

agreement with Gemini Exchange. 

Information Circular 

Prior to the commencement of 

trading, the Exchange will inform its 

members in an Information Circular of 

the special characteristics and risks 

associated with trading the Shares. 

Specifically, the Information Circular 

will discuss the following: (i) The 

procedures for the creation and 

redemption of Baskets (and that the 

Shares are not individually redeemable); 

(ii) BZX Rule 3.7, which imposes 

suitability obligations on Exchange 

members with respect to recommending 

transactions in the Shares to customers; 

(iii) how information regarding the IIV 

and the Trust’s NAV are disseminated; 

(iv) the risks involved in trading the 

Shares during the Pre-Opening 16 and 

After Hours Trading Sessions 17 when 

an updated IIV will not be calculated or 

publicly disseminated; (v) the 

requirement that members deliver a 

prospectus to investors purchasing 

newly issued Shares prior to or 

concurrently with the confirmation of a 

transaction; and (vi) trading 

information. 

In addition, the Information Circular 

will advise members, prior to the 

commencement of trading, of the 

prospectus delivery requirements 

applicable to the Shares. Members 

purchasing the Shares for resale to 

investors will deliver a prospectus to 

such investors. The Information Circular 

will also discuss any exemptive, noaction and interpretive relief granted by 

the Commission from any rules under 

the Act. 

Policy Considerations 

The Exchange recognizes that certain 

policy concerns exist as it relates to any 

series of Commodity-Based Trust Shares 

that are listed on the Exchange, but that 

these concerns, as well as certain other 

concerns raised by this proposal 

specifically, are mitigated as it relates to 

the Trust and its holdings for the 

reasons enumerated below. 

First, the Exchange believes that the 

policy concerns related to an underlying 

reference asset and its susceptibility to 

manipulation are mitigated as it relates 

to bitcoin because the very nature of the 

bitcoin ecosystem makes manipulation 

of bitcoin difficult. Particularly, in the 

OTC markets, the dual elements of 

principal to principal trading combined 

with the large size at which trades are 

effected should effectively eliminate the 

ability of market participants to 

manipulate the market with small trades 

as may be the case on any individual 

exchange. As noted above, the OTC 

desks that comprise the MVBTCO with 

which the Trust intends to effect 

transactions are well established 

institutions that comply with AML and 

KYC regulatory requirements with 

respect to trading counterparties and 

include entities that are regulated by the 

SEC and FINRA as registered brokerdealers and affiliates of broker-dealers. 

It is the Sponsor’s position that the OTC 

desks have a better measure of the 

market than any exchange-specific 

reference price, whether individually or 

indexed across multiple exchanges. The 

geographically diverse and continuous 

nature of bitcoin trading makes it 

difficult and prohibitively costly to 

manipulate the price of bitcoin and, in 

many instances, the bitcoin market is 

generally less susceptible to 

manipulation than the equity, fixed 

income, and commodity futures 

markets. There are a number of reasons 

this is the case, including that there is 

not inside information about revenue, 

earnings, corporate activities, or sources 

of supply; it is generally not possible to 

disseminate false or misleading 

information about bitcoin in order to 

manipulate; manipulation of the price 

on any single venue would require 

manipulation of the global bitcoin price 

in order to be effective; a substantial 

over-the-counter market provides 

liquidity and shock-absorbing capacity; 

bitcoin’s 24/7/365 nature provides 

constant arbitrage opportunities across 

all trading venues; and it is unlikely that 

any one actor could obtain a dominant 

market share. 

Further, bitcoin is arguably less 

susceptible to manipulation than other 

commodities that underlie ETPs; there 

may be inside information relating to 

the supply of the physical commodity 

such as the discovery of new sources of 

supply or significant disruptions at 

mining facilities that supply the 

commodity that simply are inapplicable 

as it relates to bitcoin. Further, the 

Exchange believes that the 

fragmentation across bitcoin platforms, 

the relatively slow speed of 

transactions, and the capital necessary 

to maintain a significant presence on 

each trading platform make 

manipulation of bitcoin prices through 

continuous trading activity unlikely. 

Moreover, the linkage between the 

bitcoin markets and the presence of 

arbitrageurs in those markets means that 

the manipulation of the price of bitcoin 

price on any single venue would require 

manipulation of the global bitcoin price 

in order to be effective. Arbitrageurs 

must have funds distributed across 

multiple trading platforms in order to 

take advantage of temporary price 

dislocations, thereby making it unlikely 

that there will be strong concentration 

of funds on any particular bitcoin 

exchange or OTC platform. As a result, 

the potential for manipulation on a 

trading platform would require 

overcoming the liquidity supply of such 

arbitrageurs who are effectively 

eliminating any cross-market pricing 

differences. For all of these reasons, 

bitcoin is not particularly susceptible to 

manipulation, especially as compared to 

other approved ETP reference assets. 

Second, the Trust maintains crime, 

excess crime and excess vault risk 

insurance coverage underwritten by 

various insurance carriers that will 

cover the entirety of the Trust’s bitcoin 

holdings. While the Trust remains fully 

confident in its system for securing its 

bitcoin, insurance coverage of all of the 

Trust’s bitcoin holdings eliminates 

exposure to the risk of loss to investors 

through fraud or theft, which in turn 

eliminates most of the custodial issues 


daltland on DSKBBV9HB2PROD with NOTICES
31026 Federal Register / Vol. 83, No. 127 / Monday, July 2, 2018 / Notices 

18 15 U.S.C. 78f. 

19 15 U.S.C. 78f(b)(5). 

associated with a series of CommodityBased Trust Shares based on bitcoin. 

Finally, the Sponsor expects that the 

Shares will be purchased primarily by 

institutional and other substantial 

investors (such as hedge funds, family 

offices, private wealth managers and 

high-net-worth individuals), which will 

provide additional liquidity and 

transparency to the bitcoin market in a 

regulated vehicle such as the Trust. 

With an estimated initial per-share price 

equivalent to 25 bitcoin, the Shares will 

be cost-prohibitive for smaller retail 

investors while allowing larger and 

generally more sophisticated 

institutional investors to gain exposure 

to the price of bitcoin through a 

regulated product while eliminating the 

complications and reducing the risk 

associated with buying and holding 

bitcoin. 

2. Statutory Basis 

The Exchange believes that the 

proposal is consistent with Section 6(b) 

of the Act 18 in general and Section 

6(b)(5) of the Act 19 in particular in that 

it is designed to prevent fraudulent and 

manipulative acts and practices, to 

promote just and equitable principles of 

trade, to foster cooperation and 

coordination with persons engaged in 

facilitating transactions in securities, to 

remove impediments to and perfect the 

mechanism of a free and open market 

and a national market system and, in 

general, to protect investors and the 

public interest. 

The Exchange believes that the 

proposed rule change is designed to 

prevent fraudulent and manipulative 

acts and practices in that the Shares will 

be listed on the Exchange pursuant to 

the initial and continued listing criteria 

in Exchange Rule 14.11(e)(4). The 

Exchange believes that its surveillance 

procedures are adequate to properly 

monitor the trading of the Shares on the 

Exchange during all trading sessions 

and to deter and detect violations of 

Exchange rules and the applicable 

federal securities laws. Trading of the 

Shares through the Exchange will be 

subject to the Exchange’s surveillance 

procedures for derivative products, 

including Commodity-Based Trust 

Shares. The issuer has represented to 

the Exchange that it will advise the 

Exchange of any failure by the Trust or 

the Shares to comply with the 

continued listing requirements, and, 

pursuant to its obligations under 

Section 19(g)(1) of the Exchange Act, the 

Exchange will surveil for compliance 

with the continued listing requirements. 

If the Trust or the Shares are not in 

compliance with the applicable listing 

requirements, the Exchange will 

commence delisting procedures under 

Exchange Rule 14.12. The Exchange 

may obtain information regarding 

trading in the Shares and listed bitcoin 

derivatives via the ISG, from other 

exchanges who are members or affiliates 

of the ISG, or with which the Exchange 

has entered into a comprehensive 

surveillance sharing agreement. In 

addition, the Exchange may obtain 

information about bitcoin transactions, 

trades and market data from bitcoin 

exchanges with which the Exchange has 

entered into a comprehensive 

surveillance sharing agreement as well 

as certain additional information that is 

publicly available through the Bitcoin 

blockchain. The Exchange notes that it 

has entered into a comprehensive 

surveillance sharing agreement with 

Gemini Exchange. 

The proposal is designed to perfect 

the mechanism of a free and open 

market and, in general, to protect 

investors and the public interest in that 

it will facilitate the listing and trading 

of Commodity-Based Trust Shares based 

on the price of bitcoin that will enhance 

competition among market participants, 

to the benefit of investors and to the 

marketplace, and will allow institution 

and other substantial investors access to 

bitcoin exposure without requiring 

direct access to the bitcoin market and 

the associated complications. Despite 

the growing investor interest in bitcoin, 

the primary means for investors to gain 

access to bitcoin exposure remains 

either through direct investment 

through bitcoin exchanges, over-thecounter trading, or bitcoin derivatives 

contracts. For investors simply wishing 

to express an investment viewpoint in 

bitcoin, investment through derivatives 

is complex and requires active 

management and direct investment in 

bitcoin brings with it significant 

inconvenience, complexity, expense, 

and risk. The Shares would therefore 

represent a significant innovation in the 

bitcoin market by providing an 

inexpensive and simple vehicle for 

investors to gain exposure to bitcoin in 

a secure and easily accessible product 

that is familiar and transparent to 

investors. Such an innovation would 

help to perfect the mechanism of a free 

and open market and, in general, to 

protect investors and the public interest 

by improving investor access to bitcoin 

exposure through efficient and 

transparent exchange-traded derivative 

products. 

As noted above, the Sponsor expects 

that the Shares will be purchased 

primarily by institutional and other 

substantial investors (such as hedge 

funds, family offices, private wealth 

managers and high-net-worth 

individuals), which will provide 

additional liquidity and transparency to 

the bitcoin market in a regulated vehicle 

such as the Trust. With an estimated 

initial per-share price equivalent to 25 

bitcoin, the Shares will be costprohibitive for smaller retail investors 

while allowing larger and generally 

more sophisticated institutional 

investors to gain exposure to the price 

of bitcoin through a regulated product 

while eliminating the complications and 

reducing the risk associated with buying 

and holding bitcoin. 

The Exchange also believes that 

allowing cash creations and 

redemptions, in addition to the in-kind 

creations described in Rule 

14.11(e)(4)(C)(i), will allow APs that 

may otherwise be unwilling or unable to 

source bitcoin on their own behalf to 

participate in the creation and 

redemption of Shares, further acting to 

perfect the mechanism of a free and 

open market and, in general, to protect 

investors and the public interest. 

The Exchange also believes that not 

commencing delisting proceedings for 

the Shares if the Shares do not satisfy 

Rule 14.11(e)(4)(C)(ii)(b) [sic] is 

consistent with the Act because where 

a creation unit is 5 shares, the policy 

concerns that Rule 14.11(e)(4)(C)(ii)(b) 

[sic] is designed to address related to 

minimum receipts outstanding 

following the 12 month period 

following commencement of trading on 

the Exchange are mitigated even where 

there are significantly fewer shares 

outstanding. The Exchange believes that 

the lower number of Shares is merely a 

function of price that will have no 

impact on the creation and redemption 

process and the arbitrage mechanism. 

The Exchange also believes that the 

proposal promotes market transparency 

in that a large amount of information is 

currently available about bitcoin and 

will be available regarding the Trust and 

the Shares. The Exchange will obtain a 

representation that the Trust’s NAV will 

be calculated daily and that these values 

and information about the assets of the 

Trust will be made available to all 

market participants at the same time. 

Quotation and last sale information for 

bitcoin is widely disseminated through 

a variety of major market data vendors, 

including Bloomberg and Reuters. The 

spot price of bitcoin is available on a 24- 

hour basis from major market data 

vendors, including Bloomberg and 

Reuters, as well as the MVBTCO. 

Information relating to trading, 

including price and volume 

information, in bitcoin is available from 


daltland on DSKBBV9HB2PROD with NOTICES
Federal Register / Vol. 83, No. 127 / Monday, July 2, 2018 / Notices 31027 

major market data vendors and from the 

exchanges on which bitcoin are traded. 

Depth of book information is also 

available from bitcoin exchanges. The 

normal trading hours for bitcoin 

exchanges are 24 hours per day, 365 

days per year. The Trust will provide 

website disclosure of its bitcoin 

holdings daily. The website disclosure 

of the Trust’s bitcoin holdings will 

occur at the same time as the disclosure 

by the Sponsor of the bitcoin holdings 

to Authorized Participants so that all 

market participants are provided such 

portfolio information at the same time. 

The website for the Trust, which will be 

publicly accessible at no charge, will 

contain the following information: (a) 

The current NAV per Share daily and 

the prior business day’s NAV and the 

reported closing price; (b) the Bid-Ask 

Price and a calculation of the premium 

or discount of such price against such 

NAV; (c) data in chart form displaying 

the frequency distribution of discounts 

and premiums of the Bid-Ask Price 

against the NAV, within appropriate 

ranges for each of the four previous 

calendar quarters (or for the life of the 

Trust, if shorter); (d) the prospectus; and 

(e) other applicable quantitative 

information. The Trust will also 

disseminate the Trust’s holdings on a 

daily basis on the Trust’s website. The 

price of bitcoin will be made available 

by one or more major market data 

vendors, updated at least every 15 

seconds during Regular Trading Hours. 

Information about the MVBTCO, 

including key elements of how the 

MVBTCO is calculated, will be publicly 

available at www.mvis-indices.com/. 

The IIV will be widely disseminated on 

a per Share basis every 15 seconds 

during the Exchange’s Regular Trading 

Hours by one or more major market data 

vendors. In addition, the IIV will be 

available through on-line information 

services. 

The Exchange also recognizes that 

certain broader policy concerns exist as 

it relates to any series of CommodityBased Trust Shares that are listed on the 

Exchange, but that these concerns, as 

well as certain other concerns raised by 

this proposal and related to bitcoin 

specifically, are mitigated as it relates to 

the Trust and its holdings for the 

reasons enumerated below. 

First, the Exchange believes that the 

policy concerns related to an underlying 

reference asset and its susceptibility to 

manipulation are mitigated as it relates 

to bitcoin because the very nature of the 

bitcoin ecosystem makes manipulation 

of bitcoin difficult. Particularly, in the 

OTC markets, the dual elements of 

principal to principal trading combined 

with the large size at which trades are 

effected should effectively eliminate the 

ability of market participants to 

manipulate the market with small trades 

as may be the case on any individual 

exchange. As noted above, the OTC 

desks that comprise the MVBTCO with 

which the Trust intends to effect 

transactions are well established 

institutions that comply with AML and 

KYC regulatory requirements with 

respect to trading counterparties and 

include entities that are regulated by the 

SEC and FINRA as registered brokerdealers and affiliates of broker-dealers. 

It is the Sponsor’s position that the OTC 

desks have a better measure of the 

market than any exchange-specific 

reference price, whether individually or 

indexed across multiple exchanges. The 

geographically diverse and continuous 

nature of bitcoin trading makes it 

difficult and prohibitively costly to 

manipulate the price of bitcoin and, in 

many instances, the bitcoin market is 

generally less susceptible to 

manipulation than the equity, fixed 

income, and commodity futures 

markets. There are a number of reasons 

this is the case, including that there is 

not inside information about revenue, 

earnings, corporate activities, or sources 

of supply; it is generally not possible to 

disseminate false or misleading 

information about bitcoin in order to 

manipulate; manipulation of the price 

on any single venue would require 

manipulation of the global bitcoin price 

in order to be effective; a substantial 

over-the-counter market provides 

liquidity and shock-absorbing capacity; 

bitcoin’s 24/7/365 nature provides 

constant arbitrage opportunities across 

all trading venues; and it is unlikely that 

any one actor could obtain a dominant 

market share. 

Further, bitcoin is arguably less 

susceptible to manipulation than other 

commodities that underlie ETPs; there 

may be inside information relating to 

the supply of the physical commodity 

such as the discovery of new sources of 

supply or significant disruptions at 

mining facilities that supply the 

commodity that simply are inapplicable 

as it relates to bitcoin. Further, the 

Exchange believes that the 

fragmentation across bitcoin platforms, 

the relatively slow speed of 

transactions, and the capital necessary 

to maintain a significant presence on 

each trading platform make 

manipulation of bitcoin prices through 

continuous trading activity unlikely. 

Moreover, the linkage between the 

bitcoin markets and the presence of 

arbitrageurs in those markets means that 

the manipulation of the price of bitcoin 

price on any single venue would require 

manipulation of the global bitcoin price 

in order to be effective. Arbitrageurs 

must have funds distributed across 

multiple trading platforms in order to 

take advantage of temporary price 

dislocations, thereby making it unlikely 

that there will be strong concentration 

of funds on any particular bitcoin 

exchange or OTC platform. As a result, 

the potential for manipulation on a 

trading platform would require 

overcoming the liquidity supply of such 

arbitrageurs who are effectively 

eliminating any cross-market pricing 

differences. For all of these reasons, 

bitcoin is not particularly susceptible to 

manipulation, especially as compared to 

other approved ETP reference assets. 

Second, the Trust maintains crime, 

excess crime and excess vault risk 

insurance coverage underwritten by 

various insurance carriers that will 

cover the entirety of the Trust’s bitcoin 

holdings. While the Trust remains fully 

confident in its system for securing its 

bitcoin, insurance coverage of all of the 

Trust’s bitcoin holdings eliminates 

exposure to the risk of loss to investors 

through fraud or theft, which in turn 

eliminates most of the custodial issues 

associated with a series of CommodityBased Trust Shares based on bitcoin. 

For the above reasons, the Exchange 

believes that the proposed rule change 

is consistent with the requirements of 

Section 6(b)(5) of the Act. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition that is not 

necessary or appropriate in furtherance 

of the purpose of the Act. The Exchange 

notes that the proposed rule change, 

rather will facilitate the listing and 

trading of an additional exchange-traded 

product that will enhance competition 

among both market participants and 

listing venues, to the benefit of investors 

and the marketplace. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

The Exchange has neither solicited 

nor received written comments on the 

proposed rule change. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Within 45 days of the date of 

publication of this notice in the Federal 

Register or within such longer period (i) 

as the Commission may designate up to 

90 days of such date if it finds such 

longer period to be appropriate and 


daltland on DSKBBV9HB2PROD with NOTICES
31028 Federal Register / Vol. 83, No. 127 / Monday, July 2, 2018 / Notices 

20 17 CFR 200.30–3(a)(12). 

publishes its reasons for so finding or 

(ii) as to which the Exchange consents, 

the Commission will: (a) By order 

approve or disapprove such proposed 

rule change, or (b) institute proceedings 

to determine whether the proposed rule 

change should be disapproved. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an email to rule-comments@

sec.gov. Please include File Number SR– 

CboeBZX–2018–040 on the subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street NE, 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–CboeBZX–2018–040. This 

file number should be included on the 

subject line if email is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

internet website (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for website viewing and 

printing in the Commission’s Public 

Reference Room, 100 F Street NE, 

Washington, DC 20549 on official 

business days between the hours of 

10:00 a.m. and 3:00 p.m. Copies of such 

filing also will be available for 

inspection and copying at the principal 

office of the Exchange. All comments 

received will be posted without change. 

Persons submitting comments are 

cautioned that we do not redact or edit 

personal identifying information from 

comment submissions. You should 

submit only information that you wish 

to make available publicly. All 

submissions should refer to File 

Number SR–CboeBZX–2018–040, and 

should be submitted on or before July 

23, 2018. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.20

Eduardo A. Aleman, 

Assistant Secretary. 

[FR Doc. 2018–14114 Filed 6–29–18; 8:45 am] 

BILLING CODE 8011–01–P 

SMALL BUSINESS ADMINISTRATION 

[Disaster Declaration #15576 and #15577; 

MARYLAND Disaster Number MD–00036] 

Presidential Declaration of a Major 

Disaster for Public Assistance Only for 

the State of Maryland 

AGENCY: U.S. Small Business 

Administration. 

ACTION: Notice. 

SUMMARY: This is a Notice of the 

Presidential declaration of a major 

disaster for Public Assistance Only for 

the State of Maryland (FEMA–4374– 

DR), dated 06/25/2018. 

Incident: Severe Storms and Flooding. 

Incident Period: 05/15/2018 through 

05/19/2018. 

DATES: Issued on 06/25/2018. 

Physical Loan Application Deadline 

Date: 08/24/2018. 

Economic Injury (EIDL) Loan 

Application Deadline Date: 03/25/2019. 

ADDRESSES: Submit completed loan 

applications to: U.S. Small Business 

Administration, Processing and 

Disbursement Center, 14925 Kingsport 

Road, Fort Worth, TX 76155. 

FOR FURTHER INFORMATION CONTACT: A. 

Escobar, Office of Disaster Assistance, 

U.S. Small Business Administration, 

409 3rd Street SW, Suite 6050, 

Washington, DC 20416, (202) 205–6734. 

SUPPLEMENTARY INFORMATION: Notice is 

hereby given that as a result of the 

President’s major disaster declaration on 

06/25/2018, Private Non-Profit 

organizations that provide essential 

services of a governmental nature may 

file disaster loan applications at the 

address listed above or other locally 

announced locations. 

The following areas have been 

determined to be adversely affected by 

the disaster: 

Primary Counties: Frederick, 

Washington 

The Interest Rates are: 

Percent 

For Physical Damage: 

Percent 

Non-Profit Organizations with 

Credit Available Elsewhere ... 2.500 

Non-Profit Organizations without Credit Available Elsewhere ..................................... 2.500 

For Economic Injury: 

Non-Profit Organizations without Credit Available Elsewhere ..................................... 2.500 

The number assigned to this disaster 

for physical damage is 155766 and for 

economic injury is 155770. 

(Catalog of Federal Domestic Assistance 

Number 59008) 

James Rivera, 

Associate Administrator for Disaster 

Assistance. 

[FR Doc. 2018–14164 Filed 6–29–18; 8:45 am] 

BILLING CODE 8025–01–P 

SMALL BUSINESS ADMINISTRATION 

[Disaster Declaration #15574 and #15575; 

Oklahoma Disaster Number OK–00122] 

Presidential Declaration of a Major 

Disaster for Public Assistance Only for 

the State of Oklahoma 

AGENCY: U.S. Small Business 

Administration. 

ACTION: Notice. 

SUMMARY: This is a Notice of the 

Presidential declaration of a major 

disaster for Public Assistance Only for 

the State of Oklahoma (FEMA–4373– 

DR), dated 06/25/2018. 

Incident: Wildfires. 

Incident Period: 04/11/2018 through 

04/20/2018. 

DATES: Issued on 06/25/2018. 

Physical Loan Application Deadline 

Date: 08/24/2018. 

Economic Injury (EIDL) Loan 

Application Deadline Date: 03/25/2019. 

ADDRESSES: Submit completed loan 

applications to: U.S. Small Business 

Administration, Processing and 

Disbursement Center, 14925 Kingsport 

Road, Fort Worth, TX 76155. 

FOR FURTHER INFORMATION CONTACT: A. 

Escobar, Office of Disaster Assistance, 

U.S. Small Business Administration, 

409 3rd Street SW, Suite 6050, 

Washington, DC 20416, (202) 205–6734. 

SUPPLEMENTARY INFORMATION: Notice is 

hereby given that as a result of the 

President’s major disaster declaration on 

06/25/2018, Private Non-Profit 

organizations that provide essential 

services of a governmental nature may 

file disaster loan applications at the 

address listed above or other locally 

announced locations. 


daltland on DSKBBV9HB2PROD with NOTICES