CME freezes Nasdaq’s major Bitcoin launch, warning a legal loophole could upend the entire commodities market
Nasdaq PHLX’s proposed Bitcoin index options, QBTC, remain on hold while CME challenges the SEC’s approval. CME says Bitcoin is a commodity, so a direct option on its price belongs under CFTC jurisdiction, not the securities regime. The SEC nevertheless approved QBTC in May using a structure that would rely on CFTC exemptive relief and then treat the contracts as securities under Exchange Act Section 3B and Dodd-Frank Section 717. QBTC would be cash-settled, use CME CF Bitcoin benchmarks, and clear through OCC. CME argues this would let Nasdaq offer an economically similar product without becoming a CFTC-regulated derivatives venue, creating competitive harm and jurisdictional confusion. The SEC has agreed to review the case, with public statements due Aug. 24, but the approval stays frozen until the commissioners act.
