SEC Halts Nasdaq Bitcoin Options Plan Amid CME Jurisdiction Challenge

Nasdaq's plan to list cash-settled bitcoin index options on its exchange has hit a snag due to regulatory uncertainty. The Securities and Exchange Commission (SEC) has paused its earlier approval of the QBTC product, citing a challenge from CME Group.

CME argued that bitcoin is a commodity and that options tied directly to its value fall under the Commodity Futures Trading Commission's exclusive jurisdiction rather than the SEC's. If this argument prevails, Nasdaq would need to either register under the CFTC framework as a futures or swaps venue or redesign the contracts so they track a security.

The dispute centers around whether securities exchanges can list derivatives tied to commodities and clarifies regulatory oversight of crypto-linked derivatives. Interested parties can submit comments supporting or opposing the decision by August 24.