SEC Approves Multi-Cryptocurrency Commodity Trust Options for NYSE American

TLDR

• SEC approved options listings for multi-cryptocurrency commodity trusts on NYSE American.
• Earlier rules allowed options only on single-crypto commodity trusts.
• Each crypto asset must average at least $700M in daily market value over 12 months.
• Each asset’s derivatives market must have a surveillance-sharing agreement.
• Trust shares must meet ETF options standards and be listed as NMS stocks.

The U.S. Securities and Exchange Commission has approved a rule change allowing the listing and trading of options on multi-cryptocurrency commodity trusts on NYSE American, expanding a framework that previously applied only to trusts holding a single crypto asset. The decision gives exchanges a path to list options on baskets of digital assets, provided that each asset in the basket meets specific liquidity and surveillance standards.

Under the approved rule, every crypto asset held by an eligible trust must have maintained an average daily market value of at least $700 million during the previous 12 months. In addition, derivatives based on each asset must trade on a market covered by a comprehensive surveillance-sharing agreement with the exchange. The trust shares themselves must satisfy initial and continued listing requirements for exchange-traded fund options and must be classified as National Market System stocks.

The SEC said the rule change is designed to allow investors to access additional crypto-related investment and hedging tools within an exchange-regulated structure. By extending the listing framework beyond single-asset products, the change opens the way for options tied to trusts that hold more than one cryptocurrency, while keeping in place standards linked to trading volume, oversight and market surveillance.

New path for multi-crypto trust options

The rule change marks a broader step in the development of crypto-linked exchange products in the United States. Until now, options listings were generally limited to commodity trusts tied to one digital asset. The updated framework permits a trust with multiple crypto holdings to qualify, provided each underlying asset independently meets the required tests.

That requirement is central to the SEC’s approval. Rather than treating a basket of crypto assets as a single unit for eligibility purposes, the rule requires each component to pass liquidity and monitoring checks. This approach keeps the focus on the trading profile of each underlying asset and whether its derivatives market can support surveillance measures designed to detect and deter manipulation.

The listing venue also retains the authority to suspend trading if an underlying crypto asset no longer satisfies the standards. That means an approved product would remain subject to ongoing review after listing, not just at launch. The same options rules that apply to traditional ETF options, including margin requirements, position limits, and ongoing compliance obligations, would also apply to these products.

SEC cites market structure and investor access

The approval expands the range of regulated crypto-linked products available on U.S. exchanges and may offer investors another way to manage exposure to digital assets without direct token ownership. Options tied to multi-crypto trusts can be used for hedging, income strategies, or directional positioning, depending on the investor and the structure of the trust.

The SEC said the change can improve market efficiency by allowing such products to come to market without requiring a separate approval process each time a qualifying trust seeks an options listing. That may reduce delays for exchanges and issuers while keeping the core standards in place. The decision also reflects the regulator’s continued focus on surveillance-sharing agreements as part of the approval process for exchange-traded crypto products.

The development comes after the New York Stock Exchange agreed in March to pay a $9 million civil penalty to settle SEC charges tied to a January 2023 systems error that disrupted the market open and triggered sharp price swings in several blue-chip stocks. That settlement was related to an operational issue in which the exchange’s primary and backup systems were running simultaneously.