The U.S. Securities and Exchange Commission (SEC) has taken two significant regulatory steps affecting cryptocurrency markets. The first action involves a Nasdaq rule filing that removes position and exercise limits on options tied to spot Bitcoin and Ether ETFs. The second is a new SEC proposal to amend a key broker-dealer reporting rule, potentially excluding crypto assets from certain over-the-counter (OTC) market requirements.
Nasdaq's ETF Options Rule Change
The SEC published a Nasdaq rule filing (release 34-104649) on January 21, 2026, which removes a 25,000-contract cap on position and exercise limits for options overlying spot Bitcoin and Ether ETF shares. This self-regulatory organization rule change, submitted under Exchange Act Rule 19b-4, received immediate effectiveness upon filing, though the SEC retains authority to suspend the rule change within 60 days. The public comment deadline was set for February 17, 2026.
The filing specifically names ETF products from six major issuers: BlackRock, Fidelity, Bitwise, Grayscale, ARK/21Shares, and VanEck. These are among the most actively traded spot Bitcoin and Ether ETFs in the U.S. market. The 25,000-contract ceiling was initially applied when crypto ETF options first launched, reflecting regulatory caution around a new asset class. Nasdaq argues that removing these restrictions aligns the treatment of crypto ETF options with how other commodity-based fund options are handled, allowing market makers to provide deeper liquidity and institutional investors to build larger hedged positions.
SEC's OTC Rule Proposal
Separately, the SEC has proposed an amendment to Rule 15c2-11, a broker-dealer reporting rule first adopted in 1971 aimed at reducing fraud in the penny stock market. The proposal would limit the scope of reporting requirements for over-the-counter broker-dealers to "equity securities," reversing a 2021 interpretation that included fixed-income securities. This change has raised questions about whether it applies to crypto securities.
SEC Commissioner Hester Peirce, leader of the agency's crypto task force, welcomed the proposal, stating that the SEC had created years of uncertainty through previous amendments. "The Commission should have granted long-term no-action relief while we assessed whether the application of the rule to the fixed income market was appropriate and then amended the rule as necessary," Peirce said.
The SEC has opened a 60-day period for public comment on the proposal. Peirce noted she is "particularly interested in commenters' views as to the questions about the definition of 'equity security,' the rule's application to crypto assets, and the appropriate next steps." This development comes as both the SEC and Commodities Futures Trading Commission (CFTC) have been pushing to establish regulatory clarity for crypto in the U.S., recently signing a memo agreeing to coordinate oversight of financial markets.
