The Securities and Exchange Commission has granted the CME Group a petition to review its May approval of bitcoin index options on the Nasdaq, according to a Federal Register order published August 3. Parties may submit written comments by August 24.
The CME challenged Nasdaq's bitcoin options listing after the SEC approved it in May without requiring the same level of surveillance sharing agreements the agency had demanded from CME's own bitcoin futures contracts when those launched in December 2017. That approval set a different standard: Nasdaq's listing relied on its rule changes and an exemptive relief order, a path that did not impose the surveillance-sharing requirements the SEC historically attached to crypto derivatives approvals.
The SEC order does not specify CME's formal objections or indicate whether the agency will ultimately reverse, modify, or uphold Nasdaq's approval. The review is a procedural step that allows interested parties to place arguments on the record before the SEC decides whether to reconsider its May decision.
Nasdaq's bitcoin options had not launched as of early August, pending completion of regulatory relief processes with the Commodity Futures Trading Commission. The CFTC must sign off on certain operational elements before Nasdaq can begin trading. CME, which operates under CFTC jurisdiction, has sought to ensure that any competing bitcoin derivatives product approved by the SEC meets equivalent surveillance and market-integrity standards.
The approval process for Nasdaq's product moved faster than prior SEC actions on crypto derivatives. The agency denied similar bitcoin options proposals from other exchanges multiple times between 2017 and 2023, citing concerns about market manipulation and investor protection. Nasdaq's May approval came without public comment periods or the multi-year reviews that had characterized earlier denials.
The August 24 comment deadline gives market participants, exchanges, and regulators a window to file responses. The SEC has not announced a timeline for issuing a final decision on the petition. If the agency upholds its Nasdaq approval, CME may face competition from a rival exchange offering bitcoin options under a less stringent surveillance regime. If the SEC rescinds or significantly modifies the approval, Nasdaq's launch timeline would shift again and the standard for future crypto derivatives approvals would remain contested.
The number that decides it is whether the SEC modifies Nasdaq's approval before the August 24 comment window closes.
