The US Securities and Exchange Commission delayed the launch of Nasdaq PHLX’s proposed Bitcoin index options after agreeing to conduct a full Commission review of the product.
The SEC issued the review order on July 29, while its publication in the Federal Register on Aug. 3 established Aug. 24 as the deadline for interested parties to submit written statements supporting or opposing the previous approval.
The order does not determine whether CME Group’s legal challenge is valid. Instead, it formally accepts the matter for review and keeps the SEC staff’s May 22 approval suspended until the Commission issues another decision.
Nasdaq Bitcoin Options Remain Unable to Launch
Nasdaq PHLX proposed cash-settled, European-style Bitcoin options under the ticker QBTC. The contracts would track the CME CF Bitcoin Real Time Index divided by 100.
Final settlement would be based on the New York variant of the CME CF Bitcoin Reference Rate, also divided by 100. The proposed rules included a position and exercise limit of 24,000 contracts.
Unlike options linked to shares of spot Bitcoin exchange-traded funds, QBTC would directly reference an index tracking the price of Bitcoin. This distinction is central to the regulatory dispute. Spot Bitcoin ETF shares are classified as securities, while Bitcoin itself is generally treated as a commodity under US derivatives law.
SEC staff initially approved the Nasdaq rule change through delegated authority on May 22. CME filed notice of its intention to appeal on June 11, which automatically stayed the approval. CME then submitted its formal petition on June 18 and requested that the full Commission overturn the staff decision.
CME Says Bitcoin Options Fall Under CFTC Authority
CME argues that Bitcoin is a non-security commodity and that options directly linked to Bitcoin’s value should be classified as commodity option swaps. According to CME, the Commodity Exchange Act gives the Commodity Futures Trading Commission exclusive jurisdiction over these types of Bitcoin derivatives.
The exchange operator described the SEC staff’s legal interpretation as erroneous and claimed that the Division of Trading and Markets exceeded its delegated authority by approving the product.
However, the SEC’s latest order does not support or reject CME’s arguments. The Commission has only agreed to review the dispute and has not yet issued findings on the merits.
CME also argued that the approval could impose more regulatory costs on its exchanges and clearing operations while allowing a competing Bitcoin product to enter the market. The company asked the SEC commissioners to withdraw the staff approval instead of waiting for the outcome of a separate CFTC exemption process.
Until the SEC completes its review and issues another order, Nasdaq PHLX will not be able to launch its proposed Bitcoin index options.
