Nasdaq PHLX’s proposed Bitcoin index choices stay frozen as CME Group challenges the SEC’s authority to approve them.
The Securities and Trade Fee (SEC) granted CME’s petition on July 29 to evaluation the company’s Could approval of QBTC.
The approval had been mechanically stayed since CME filed discover of its problem on June 11, and the company has set no deadline for deciding the case. Public statements are due Aug. 24.
The dispute combines a jurisdictional take a look at with a business combat over institutional Bitcoin choices. CME operates the biggest US federally regulated crypto derivatives franchise beneath Commodity Futures Buying and selling Fee (CFTC) oversight, whereas Nasdaq is looking for to supply comparable direct Bitcoin-options publicity by means of the securities market.
Nasdaq targets a market constructed beneath CFTC guidelines
Nasdaq’s proposal would convey direct Bitcoin index choices into the brokerage and clearing infrastructure traders already use for shares and ETF choices.
QBTC could be a cash-settled contract exercisable at expiration, with intraday pricing linked to the CME CF Bitcoin Actual Time Index and last settlement based mostly on the New York variant of the CME CF Bitcoin Reference Fee. Its multiplier would give every contract reference publicity roughly equal to at least one Bitcoin.
That route locations Nasdaq nearer to a market CME has developed by means of CFTC-regulated futures and choices.
The timing is critical as a result of rising institutional participation has accelerated demand for Bitcoin choices used to hedge publicity, commerce volatility and generate yield.
CME stated in February that its broader cryptocurrency derivatives suite averaged 407,200 contracts per day in 2026, up 46% from a 12 months earlier, whereas common each day open curiosity reached 335,400 contracts.
In the meantime, Nasdaq’s proposal additionally depends on the CME CF benchmark household used throughout CME’s Bitcoin merchandise. The connection offers CME a direct business curiosity in how related publicity reaches traders and which regulatory obligations apply to the exchanges providing it.
CME used the commodities framework when it licensed choices tied on to the BRRNY benchmark in October 2025.
These financially settled swaps represented 0.01 Bitcoin per contract and had been designated for buying and selling by means of CME Globex and clearing by CME Clearing beneath CFTC guidelines. QBTC would carry roughly 100 occasions that reference publicity by means of an SEC-regulated trade.
CME says Nasdaq would achieve permission to supply an economically comparable product with out registering as a chosen contract market or swap execution facility.
The product would even be cleared by the Choices Clearing Company (OCC) in its SEC-regulated capability fairly than beneath the total derivatives clearing framework CME follows.
Its petition describes the approval as a direct aggressive harm and warns that related exemptions may elevate compliance prices for CME exchanges and clearing operations. CME has not quantified any potential lack of buying and selling quantity, charges, or market share.
CME challenges the bridge behind Nasdaq’s approval
That business overlap sits behind CME’s problem to the authorized mechanism SEC workers constructed for QBTC.
CME argues that Bitcoin is a non-security commodity, making a direct choice on its value a commodity-option swap beneath the Commodity Trade Act. Such contracts fall throughout the CFTC’s unique jurisdiction and ordinarily should commerce on CFTC-regulated venues, its petition stated.
SEC workers acknowledged that QBTC couldn’t launch with out CFTC reduction. Nevertheless, the Could approval stated Trade Act Part 3B may deem the contracts securities if the CFTC granted an exemption conditioned on concurrent SEC jurisdiction.
The workers relied partly on Part 717 of the Dodd-Frank Act, which permits concurrent oversight of sure derivatives. It stated the language applies to any qualifying contract receiving the desired CFTC exemption and isn’t restricted to merchandise combining apparent securities and derivatives options.
CME says that interpretation stretches a provision supposed to resolve uncertainty round securities-related derivatives. Underneath its studying, the companies can not use exemptions to switch a traditional commodity choice from the CFTC’s unique jurisdiction into the securities regime.
The group additionally recognized a classification drawback. The workers’s interpretation would deem QBTC itself a safety whereas Bitcoin and the underlying index retained their standing as non-securities.
CME says the construction may create uncertainty over the margin, customer-account, reporting and clearing guidelines governing a contract topic to each securities and commodities oversight.
Moreover, it argues that SEC workers exceeded delegated authority by adopting the interpretation and not using a vote by the total Fee.
The Fee’s choice to listen to the petition doesn’t sign settlement with CME. As an alternative, it transfers the dispute from the Division of Buying and selling and Markets to the commissioners whereas leaving the approval suspended.
The problem may unfold past Bitcoin
CME warns that the workers’s interpretation incorporates no clear restrict proscribing it to cryptocurrency.
Commodity-based ETFs already present securities-market publicity to gold, oil, corn, wheat and different belongings. CME argues that Nasdaq or one other securities trade may use the identical reasoning to hunt direct choices or futures on any commodity represented by an ETF.
Such merchandise may compete with CFTC-regulated contracts whereas working beneath totally different trade, middleman and clearing necessities.
CME says repeated use of the construction may additionally trigger commodity choices to turn into broadly handled as securities, weakening the jurisdiction Congress assigned to the CFTC.
The petition additionally factors to the CFTC’s efforts to defend unique federal jurisdiction over prediction markets. CME argues that permitting one other company to control Bitcoin index choices would undermine the identical jurisdictional place the CFTC has asserted in these instances.
SEC workers left these broader penalties for the CFTC to think about when deciding whether or not to grant exemptive reduction. The Could order centered on whether or not Nasdaq’s guidelines happy securities-market requirements, with any launch conditioned on the CFTC preserving concurrent authority.
The Fee can affirm, modify, overturn, or return the Could approval for additional proceedings.
A ruling for CME would shut Nasdaq’s present route. If Nasdaq prevails, QBTC would nonetheless require CFTC exemptions permitting PHLX to record the contracts and OCC to clear them by means of its SEC-regulated capability. OCC would additionally want the mandatory approvals and an up to date Choices Disclosure Doc.
Till the Fee resolves CME’s problem, Nasdaq’s product stays frozen and the broader query of whether or not securities exchanges can enter markets traditionally reserved for CFTC-regulated commodity derivatives stays unanswered.
