Exchange operator CME Group is requesting that a staff ruling conditionally approving Nasdaq PHLX’s proposal for cash-settled bitcoin index options be overturned by the Securities and Exchange Commission (SEC). The group argues that the contracts should only be governed by the Commodity Futures Trading Commission (CFTC).
The SEC approved CME’s petition for review in an order dated July 29 and suspended the approval while the whole Commission deliberated on the case. Written arguments in favor of or against the approval must be submitted by August 24. The commissioners’ agreement with CME’s reasoning is not stated in the order.
In 2024, Nasdaq initially revealed intentions to provide bitcoin index choices with CF Benchmarks. Because the underlying instruments for those options are securities, the proposed contracts are different from the options that are now trading on spot bitcoin ETFs. The jurisdictional problem at the heart of CME’s complaint would arise if Nasdaq’s contracts instead made reference to an index that tracks bitcoin itself. A request for comment from The Block was not immediately answered by CME or Nasdaq.
Source: sec.gov
On May 22, Nasdaq’s application was accepted by the SEC’s Division of Trading and Markets through delegated power; however, Nasdaq was unable to start trading the options until it received exemptions from the CFTC.
The CFTC exemptions that Nasdaq requires would enable the Options Clearing Corporation to clear the contracts without registering as a CFTC-regulated derivatives clearing organization and enable Nasdaq PHLX (formerly the Philadelphia Stock Exchange) to offer the contracts under concurrent SEC and CFTC oversight.
In its petition, CME said, however, that bitcoin is a non-security commodity and that options based on its value fall within the CFTC’s exclusive authority as commodity option swaps. The exchange operator stated that the SEC cannot take over control of a product that has no securities-related characteristics, nor can the CFTC utilize an exemption to provide the SEC that jurisdiction.
In its lawsuit, CME also said that the Division of Trading and Markets had overreached its power by interpreting Section 717 of the Dodd-Frank Act in a unique way. It warned that the ruling would allow securities exchanges to offer options or futures linked to other non-security commodities in accordance with SEC regulations, and it requested that the whole Commission revoke the permission.
In its petition, CME claimed that the SEC’s approval of the options would allow Nasdaq’s product to directly compete with CME’s services and would result in additional regulatory expenses for CME’s clearing and exchange businesses.
THE BLOCK: The SEC has kept Nasdaq PHLX’s proposed cash-settled bitcoin index options on hold after granting CME Group’s petition for review.
CME argues the contracts fall exclusively under CFTC jurisdiction. Written statements are due Aug. 24. pic.twitter.com/u9rfj0fQn3
— The Block (@TheBlockCo) August 2, 2026
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