SEC approves listing of 3x leveraged bitcoin and ether ETFs on Cboe BZX

The U.S. Securities and Exchange Commission has cleared exchange-traded products that seek three times the daily return of bitcoin and ether for listing on a U.S. exchange. The SEC on Oct. 2 issued an order approving a proposed rule change filed by Cboe BZX Exchange. The order covers six 3x products in the VS Trust, sponsored by Volatility Shares.

The six are the 3x Bitcoin, Ether, Gold, Silver, Crude Oil and Natural Gas ETFs. Although each carries "ETF" in its name, the SEC order said they are Commodity-Based Trust Shares rather than funds regulated under the Investment Company Act of 1940, making them exchange-traded products (ETPs) in legal terms. The approval was issued by the SEC's Division of Trading and Markets under delegated authority.

Three times the daily move, reset every day

Each product seeks daily investment results, before fees and expenses, of three times the daily performance of its underlying asset. If bitcoin rises 1% in a day, the product aims to rise 3%; if bitcoin falls 1%, it aims to fall 3%. Because the leverage resets daily, returns over several days can differ from three times the underlying asset's return. For example, if the underlying asset gains 10% one day and loses 10% the next, it is down 1%, while a 3x product that rises 30% and then falls 30% is down 9%.

In the order, the SEC noted that Regulation Best Interest (Reg BI) applies when broker-dealers recommend such products to retail customers, and that the Financial Industry Regulatory Authority (FINRA) imposes heightened sales practice and margin requirements on leveraged and inverse products. Cboe BZX rules also require exchange members to have a reasonable basis to believe a customer has the knowledge, experience and financial ability to bear the risks before recommending these products.

CME futures, not spot coins

The bitcoin and ether 3x products will not buy or hold the coins. Their benchmarks are built from the first- and second-month bitcoin and ether futures contracts traded on the Chicago Mercantile Exchange (CME), and the funds will invest in those futures together with cash and cash equivalents. Each month, the futures positions roll from the near-month contract to the next over a five-day period beginning on the sixth business day before expiry, with about 20% moved each day.

If the benchmark futures become unavailable because of price limits, higher margin or similar constraints, the funds may invest in longer-dated futures, other ETFs and ETPs tracking the same asset, or options on them. The trust is registered as a commodity pool with the Commodity Futures Trading Commission (CFTC), and each fund will also be registered as a commodity pool. U.S. Bank serves as custodian and Wilmington Trust as trustee.

Why the funds needed their own approval

On Sept. 17, 2025, the SEC approved generic listing standards for Commodity-Based Trust Shares, allowing qualifying products to list without a separate rule change. Those standards, however, explicitly exclude products that seek a multiple or inverse of an asset's return. That is why the 3x products needed an individual rule change.

Cboe BZX filed the proposal on Aug. 10, and the SEC published notice of it on Aug. 14. The notice ran in the Federal Register on Aug. 19, and no comments were received. In the order, the SEC accepted the exchange's representation that, apart from the 3x leverage, the six products meet all other requirements of the generic listing standards, and said leveraged products on each underlying asset already trade on U.S. exchanges. As examples, it cited the same sponsor's 2x bitcoin product BITX and 2x ether product ETHU.

Trading waits on the S-1

The approval allows the exchange to list the products. According to the Cboe BZX filing, the VS Trust must file a registration statement on Form S-1 under the Securities Act of 1933, and the shares will not trade until it becomes effective. No listing date has been announced.

As of 12:30 p.m. KST on Oct. 3, after the approval became public, bitcoin traded at $84,599 on Binance, down 0.88% over 24 hours, and ether was at $2,679, down 1.39%. At the same time, bitcoin traded at 114,899,000 won on Upbit, about 0.8% above Binance's price converted into won, a gap known as the kimchi premium (the difference between prices on Korean exchanges and global markets).