The Chicago-headquartered stock exchange NYSE Arca has applied for a rule change with the Securities and Exchange Commission (SEC) to list shares in a proposed Bitcoin investment fund.
According to the May 20 filing, the stock and options exchange is planning to establish a trust named the United States Bitcoin and Treasury Investment Trust, which will be managed by Wilshire Phoenix Funds. The sole purpose of the investment trust would be to invest in Bitcoin and short-term US Treasury securities.
“NYSE Arca, Inc., proposes (1) to amend NYSE Arca Rule 8.201-E (Commodity-Based Trust Shares) to provide for issuance and redemption of such securities for the underlying commodity and/or cash, and (2) to list and trade the shares of the United States Bitcoin and Treasury Investment Trust under NYSE Arca Rule 8.201-E, as proposed to be amended,” the filing stated.
The Chicago-headquartered exchange also elaborated that it would appoint Coinbase’s custody arm to provide custodial service for the trust’s crypto investments. A tie with Coinbase will also provide up to $200 million insurance coverage, which the crypto exchange bought to protect the funds stored in its wallets from attacks.
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“According to the Registration Statement, the Trust has obtained insurance for the bitcoin held by the Trust, through the Bitcoin Custodian,” the filing added. “Currently, the Bitcoin Custodian, either directly or through an affiliate, procures fidelity (also known as crime) insurance to protect the organization from risks such as theft of funds.”
“Specifically, the fidelity insurance coverage program provides coverage for the theft of funds held in hot or cold storage and provides a limit excess of $200,000,000.”
Not Ready for Bitcoin ETF Yet
It is to be noted that the recent filing is a separate move from NYSE Arca’s existing push for a Bitcoin-backed exchange-traded fund (ETF) along with asset-manager Bitwise.
Meanwhile, the SEC is reluctant to approve a Bitcoin-backed ETF as last week it delayed the decision date for Bitwise’s application followed by a similar decision for Cboe’s application.