The U.S. Securities and Exchange Commission on October 4, 2022 opened formal proceedings over Cboe BZX Exchange’s proposal to list and trade shares of the VanEck Bitcoin Trust. The order moved the application into a deeper review focused on manipulation, market surveillance and investor protection.
The distinction is important: the SEC did not approve or reject the product on October 4. It instituted proceedings under Section 19(b)(2)(B) of the Exchange Act and invited written evidence. For U.S. crypto markets, that meant a proposed exchange-traded vehicle holding bitcoin directly remained blocked from launch while the regulator tested whether Cboe’s safeguards satisfied federal exchange law.
A spot-bitcoin proposal under examination
Cboe filed the proposed rule change on June 24, 2022, and the SEC published it for comment on July 13. After extending its initial review on August 24, the Commission had set October 11 as the deadline to approve, disapprove or begin proceedings. The October 4 order chose the third path, one week before that deadline.
VanEck’s proposed trust would have held bitcoin through a third-party regulated custodian. Its shares were designed to reflect the MVIS CryptoCompare Bitcoin Benchmark Rate, less operating expenses. The proposed benchmark drew from Bitstamp, Coinbase, Gemini, itBit and Kraken. It used trades from twenty three-minute periods before 4 p.m. Eastern, calculated a volume-weighted median for each interval, discarded the highest and lowest contributed prices, then averaged the remainder equally.
Those mechanics mattered because the product was intended to turn spot-bitcoin exposure into shares tradable on a national securities exchange. The filing contemplated in-kind creation and redemption in blocks of 50,000 shares, with authorized participants delivering bitcoin for new shares or receiving bitcoin when redeeming them. An intraday indicative value would have updated every 15 seconds during regular exchange hours. None of those planned operations was live on October 4.
The SEC’s unresolved questions
The Commission asked whether the trust and its shares would be susceptible to manipulation and whether bitcoin markets were sufficiently liquid and transparent. It also asked whether the Chicago Mercantile Exchange’s bitcoin-futures market qualified as a regulated market of significant size related to spot bitcoin.
That surveillance question was the institutional center of the proceeding. Cboe argued that the product’s in-kind structure, futures-led price discovery, the size of bitcoin trading and the ability to execute large transactions reduced manipulation risk. The SEC sought data on whether those features could substitute for a comprehensive surveillance-sharing agreement with a regulated market tied to the underlying spot asset.
The order itself said opening proceedings did not mean the Commission had reached a conclusion. That caution limits the event-day inference: the action signaled continued regulatory resistance, but it did not establish that manipulation had occurred, that VanEck’s benchmark was defective or that the application would ultimately fail.
Why the October 4 step mattered
By October 2022, the SEC had allowed exchange-traded funds based on regulated bitcoin futures while declining multiple proposals holding bitcoin directly. The VanEck review kept that dividing line intact. Investors could obtain futures-based exposure in a brokerage account, but this proposed spot-backed trust could not trade without a separate exchange-rule approval.
No price or volume claim is made here. Bitcoin trades continuously across fragmented venues, and the surviving official record does not show that the October 4 procedural order caused a measurable market move. The significance is regulatory and structural: the SEC identified the evidence it believed Cboe still needed to supply before spot bitcoin could enter the national exchange framework through this proposal.
Later context
On March 10, 2023, the SEC disapproved this specific Cboe rule-change proposal. That later outcome clarifies the file’s history; it should not be read backward as a decision already made on October 4, 2022.
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