Nasdaq has formally requested U.S. Securities and Exchange Commission (SEC) approval to launch an exchange-traded fund (ETF) tracking a basket of cryptocurrencies through a proposed regulatory framework designed to address market integrity concerns.
Nasdaq’s Latest Proposal Filing Sets a New Standard for Crypto Market Oversight
The Nasdaq Stock Market LLC submitted a 131-page Form 19b-4 to regulators on Feb. 18, 2025, outlining plans to adopt Rule 5712 for listing “Commodity- and Digital Asset-Based Investment Interests.” The proposal specifically targets the Hashdex Nasdaq Crypto Index US ETF (NCIQ), which would hold bitcoin (BTC), ethereum (ETH), and possibly other digital assets under a passive management strategy.
Under the new rule, at least 90% of the fund’s holdings must derive from assets traded on platforms sharing surveillance data via the Intermarket Surveillance Group or through formal agreements. This mirrors standards applied to commodity-based ETFs, requiring issuers to maintain transparency with regulators about portfolio composition and trading activity. Nasdaq emphasized the structure’s novel means to prevent fraud and manipulation through diversified exposure across multiple cryptocurrencies.
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Custody protocols require assets to be held by vetted institutions like Bitgo and Coinbase, with creation/redemption processes exclusively using cash transactions. The fund’s net asset value would update every 15 seconds using Nasdaq’s proprietary index methodology, which applies algorithmic penalties to outlier pricing data from six pre-approved trading platforms.
With the Trump administration vowing to end Biden’s war against crypto, expectations are high for comprehensive regulation to promote market integrity. Nasdaq’s ETF proposal reflects this newfound regulatory landscape, as several industry stakeholders aim to ensure transparency and investor protection with new funds. The administration’s “commitment to making America the crypto capital” signals a new era for digital assets, paving the way for responsible industry growth.
Source: Bitcoin
