Nasdaq filed an application with the U.S. SEC to list and trade the 21Shares Dogecoin ETF under Nasdaq Rule 5711(d), a rule that governs the listing and trading of Commodity-Based Trust Shares. Coinbase Custody Trust Company, LLC will be the custodian and will hold all Dogecoin on behalf of the Trust.
Nasdaq explained that when the Trust sells or redeems its shares, DOGE will be transferred in or out of the Trust, as applicable, in exchange for blocks of 10,000 shares (a "basket") that will be based on the amount of Dogecoin attributable to each share of the Trust.
However, Nasdaq's registration statement also stated in part that "Neither the Trust, nor the Sponsor, nor the Dogecoin Custodian, nor any other person associated with the Trust will engage, directly or indirectly, in actions in which any portion of the Trust's Dogecoin is used to earn additional Dogecoin or generate rewards or other income."
The Registration Statement revealed in particular that the Trust was not a registered investment company under the Investment Company Act of 1940, as amended, and was not subject to regulation under the 1940 Act. The Trust was also not a commodity pool for purposes of the Commodity Exchange Act of 1936, as amended, and the sponsor was not subject to regulation by the Commodity Futures Trading Commission (CFTC) as an operator of a commodity pool or commodity trading advisor.
