SEC approved exchange rules for Grayscale Mini and Pando Bitcoin trusts

The U.S. Securities and Exchange Commission on July 26, 2024 approved exchange-rule changes permitting NYSE Arca to list the Grayscale Bitcoin Mini Trust and Cboe BZX Exchange to list the Pando Asset Spot Bitcoin Trust. Both proposed vehicles would hold spot bitcoin, although the Pando filing also contemplated cash and cash equivalents.

The decision expanded the regulated-product pipeline established by the SEC’s January 10 approval of the first group of U.S. spot-bitcoin exchange-traded products. It did not endorse bitcoin, guarantee either trust’s commercial success or authorize trading before every applicable registration and listing condition was satisfied.

What the SEC approved

Release No. 34-100610 approved NYSE Arca’s proposal under its rule for Commodity-Based Trust Shares. The same order granted accelerated approval to Cboe BZX’s amended Pando proposal because the SEC found it substantially similar to previously approved spot-bitcoin products.

The Commission concluded that the proposals were consistent with the Exchange Act requirements governing national securities exchanges. Its reasoning relied substantially on the framework used in January: the SEC found that spot-bitcoin markets remained highly correlated with the regulated Chicago Mercantile Exchange bitcoin-futures market and that the exchanges’ surveillance-sharing arrangements with CME could assist in detecting fraudulent or manipulative activity.

That was a finding about exchange rules and surveillance mechanisms. The SEC expressly applied the statutory test governing whether exchange rules were designed to prevent fraud and manipulation; it did not find that bitcoin markets were immune from either.

The order also considered quotation and last-sale reporting, publication of net asset values, intraday indicative values updated every 15 seconds during regular trading hours, trading-halt procedures and continued-listing requirements. Those provisions were intended to make the shares priceable and subject them to ordinary exchange oversight.

Grayscale’s lower-cost spinoff structure

Grayscale had designed the Bitcoin Mini Trust as an alternative to its existing Grayscale Bitcoin Trust, or GBTC. An issuer announcement filed with the SEC on July 19 said GBTC would contribute 10% of its bitcoin to the new trust. Shareholders recorded at 4:00 p.m. Eastern on July 30 were expected to receive one Mini Trust share for each GBTC share they held, without surrendering their GBTC shares or paying additional consideration.

The proposed distribution mattered because it would seed the new product from an established pool of bitcoin rather than require it to build its entire asset base through new subscriptions. Grayscale’s preliminary documents described the Mini Trust as carrying a materially lower sponsor fee than GBTC, making cost competition the product’s principal institutional distinction.

None of that was final merely because the exchange-rule filing had been approved. Grayscale stated that the distribution remained conditioned on effectiveness of the Mini Trust’s Securities Act registration statement, registration of its shares under the Exchange Act and final NYSE Arca listing approval. Its anticipated July 31 distribution date therefore remained a forecast on July 26.

Why the decision mattered

By July 26, spot-bitcoin products had moved from a one-time regulatory exception toward a repeatable exchange-listing framework. The SEC treated the Grayscale and Pando proposals as substantially similar to products approved in January, suggesting that later applicants could rely on established surveillance, disclosure and trading-control precedents when their structures matched that record.

For Grayscale, the approval removed a central exchange-rule obstacle to reorganizing part of GBTC into a separate product designed to compete on cost. For Pando, it established regulatory clearance for the proposed listing rule, but not that the trust had launched, attracted assets or secured a trading date.

No bitcoin price, return, volume, fund-flow or causal market-reaction claim is made here. Cryptocurrency trades continuously across multiple venues, and the regulatory documents alone cannot isolate the order’s effect on market prices. The verified July 26 development was narrower but durable: two additional spot-bitcoin trust listings cleared the SEC’s exchange-rule review while product-level conditions remained outstanding.