Cboe Applies to SEC for First US 3x Bitcoin and Ethereum Leveraged ETFs

Cboe seeks SEC approval for 3x leveraged crypto ETFs under CFTC commodity pool structure, marking a shift from traditional 1940 Act regulation.

Woofun AI reports that Cboe BZX submitted an application to the SEC on August 15 for rule changes to list the first 3x leveraged Bitcoin and Ethereum ETFs in the U.S. The filing also includes proposals for 3x leveraged ETFs tracking gold, silver, crude oil, and natural gas. These funds will utilize a 'commodity pool' structure regulated by the CFTC, rather than the traditional ETF framework supervised by the SEC under the Investment Company Act of 1940. Issued by Volatility Shares LLC and managed under VS Trust, the products aim to deliver three times the daily performance of their underlying assets using futures contracts from CME Group or COMEX as collateral.

Since these leverage products do not meet existing standard listing requirements, Cboe must submit a separate S-1 registration filing under the Securities Act of 1933 alongside the rule change request. Cboe asserts this structure provides an additional layer of federal regulation. Market analysts note that 3x leverage ETFs are primarily targeted at short-term traders and professional investors, rather than long-term holders. Volatility Shares has previously launched 2x Bitcoin and Ethereum strategy ETFs in the U.S., while the European market introduced the first 3x and inverse 3x Bitcoin and Ethereum ETF products last year.