How Spot Bitcoin ETFs Are Regulated in the US: The SEC Rules Explained

Spot Bitcoin ETFs are exchange-traded trusts that hold Bitcoin and are listed on national securities exchanges under SEC-approved rules. The SEC approved the first 11 on January 10, 2024, in Release No. 34-99306. They are structured as Commodity-Based Trust Shares, which are not registered as investment companies under the Investment Company Act of 1940.

Two later SEC actions changed how they work. On July 29, 2025, the SEC permitted in-kind creations and redemptions. On September 17, 2025, it approved generic listing standards that let exchanges list qualifying products without a separate rule filing for each one.

A spot Bitcoin ETF is a trust whose shares trade on a stock exchange and whose assets are Bitcoin. “Spot” means the trust holds Bitcoin itself, rather than futures contracts on Bitcoin.

The SEC uses the term exchange-traded product, or ETP, in its orders and statements. “ETF” is the common market term. Both refer to the same products in this guide.

The legal category matters. According to Release No. 34-99306, the SEC’s January 2024 order is titled, in part, “Order Granting Accelerated Approval of Proposed Rule Changes, as Modified by Amendments Thereto, to List and Trade Bitcoin-Based Commodity-Based Trust Shares and Trust Units.”

No. NYSE Arca’s generic listing standard was published in the Federal Register as Release No. 34-103974. Under its definition, a Commodity-Based Trust Share “is not registered as an investment company pursuant to the Investment Company Act of 1940.”

On January 10, 2024. Release No. 34-99306 approved 11 proposals at three exchanges:

Technically, the SEC did not approve the funds themselves. It approved the exchanges’ proposed rule changes to list and trade their shares.

A court decision. In his statement of January 10, 2024, Gensler explained that “The U.S. Court of Appeals for the District of Columbia held that the Commission failed to adequately explain its reasoning” in its earlier denial of the Grayscale proposal.

Given that decision, he described approval as the “most sustainable path forward.” The order itself states: “The Commission is considering in this order the remand of the Grayscale Order and the other Proposals referenced above.”

No. Gensler wrote: “While we approved the listing and trading of certain spot bitcoin ETP shares today, we did not approve or endorse bitcoin.”

He also wrote that the action was “cabined to ETPs holding one non-security commodity, bitcoin.” That phrase, from the SEC chair at the time, describes Bitcoin as a commodity rather than a security.

Disclosure and exchange oversight. Gensler’s statement said that “sponsors of bitcoin ETPs will be required to provide full, fair, and truthful disclosure about the products.” It also noted that “these products will be listed and traded on registered national securities exchanges.”

On those exchanges, he wrote, “Such regulated exchanges also have rules designed to address certain conflicts of interest.”

They are the way new ETF shares are created or retired using Bitcoin itself rather than cash. Large market participants called authorized participants create and redeem ETF shares directly with the trust.

The January 2024 order did not allow this for spot Bitcoin products. Release No. 34-99306 states that the proposals “only contemplate cash creation and redemption by authorized participants,” and that in-kind processes were outside the scope of the order.

On July 29, 2025. The SEC’s press release, “SEC Permits In-Kind Creations and Redemptions for Crypto ETPs,” announced orders allowing authorized participants to create and redeem shares in kind.

The release notes that the spot Bitcoin and ether products had been “limited to creations and redemptions on an in-cash basis.” The change aligns them with other commodity-based ETPs.

Chairman Paul S. Atkins said the approvals “make these products less costly and more efficient.”

According to the same press release, the Commission also approved:

Rules that let an exchange list a qualifying product without first asking the SEC for a rule change. On September 17, 2025, the SEC approved generic listing standards for Commodity-Based Trust Shares at three national securities exchanges.

Under these standards, qualifying products can be listed “without first submitting a proposed rule change to the Commission” under Section 19(b) of the Securities Exchange Act. Before, each new spot product needed its own rule filing and approval, as in January 2024.

NYSE Arca’s version, published in the Federal Register on September 18, 2025, requires each underlying commodity to meet at least one of three tests:

Bitcoin futures on CFTC-regulated exchanges go back to December 2017. On December 1, 2017, the CFTC noted that CME and the CBOE Futures Exchange “self-certified new contracts for bitcoin futures products.”

Two related items, according to the SEC’s press release:

Chairman Atkins said: “By approving these generic listing standards, we are ensuring that our capital markets remain the best place in the world.”

The trusts hold Bitcoin, and the SEC has since described Bitcoin as a non-security. In March 2026, the SEC issued an interpretation, Release Nos. 33-11412 and 34-105020, that lists “Bitcoin (BTC)” among its examples of digital commodities. It states: “A digital commodity itself, as described in this release, is not a security because it does not have the economic characteristics of a security.”

The ETF shares are a different matter. They are securities listed on national securities exchanges, while the Bitcoin the trust holds is, in the SEC’s 2026 view, a digital commodity.

The sources above lead to a few clear points:

On January 10, 2024. In Release No. 34-99306, the SEC approved 11 proposals from NYSE Arca, Nasdaq and Cboe BZX to list and trade Bitcoin-based Commodity-Based Trust Shares, including the Grayscale Bitcoin Trust, iShares Bitcoin Trust and Fidelity Wise Origin Bitcoin Fund.

Because of a court decision. Then-Chair Gary Gensler wrote that the D.C. Circuit held the Commission “failed to adequately explain its reasoning” in denying Grayscale’s proposal. He called approval the “most sustainable path forward.” He also stated the SEC “did not approve or endorse bitcoin.”

No. Under NYSE Arca’s generic listing standard, a Commodity-Based Trust Share “is not registered as an investment company pursuant to the Investment Company Act of 1940.” Spot Bitcoin ETFs are listed as Commodity-Based Trust Shares, a category built for trusts that hold a spot commodity.

The SEC permitted in-kind creations and redemptions on July 29, 2025. Before that, spot Bitcoin products were limited to cash. The same day, it approved options on certain spot Bitcoin ETPs and higher options position limits of up to 250,000 contracts.

Approved by the SEC on September 17, 2025, they let three exchanges list qualifying Commodity-Based Trust Shares without first filing a proposed rule change under Section 19(b). One test is a futures contract trading on a designated contract market for at least six months.

Not directly. A spot Bitcoin ETF share is a security issued by a trust that holds Bitcoin, listed on a national securities exchange. The trust holds the Bitcoin. The shareholder holds shares in the trust, which trade like other exchange-listed securities.

This article is general information and not legal advice.

Spot Bitcoin products are regulated differently from one country to the next. Compare more than 140 countries on The Bitcoin Act’s interactive Global Bitcoin Regulatory Map: https://thebitcoinact.xyz/bitcoin-legal-map

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