SEC Reviews Nasdaq’s Polkadot Trust Listing Amid Fraud Concerns

The U.S. Securities and Exchange Commission (SEC) has officially begun reviewing Nasdaq’s application to list and trade shares of the 21Shares Polkadot Trust. The SEC’s decision to initiate this review is driven by unresolved concerns about fraud and investor protection. Nasdaq submitted the proposal on March 17, 2025, with the aim of listing the DOT-backed trust under Nasdaq Rule 5711(d), which governs Commodity-based Trust Shares. If approved, this would be one of the first U.S. listed investment products directly tied to Polkadot (DOT).

The 21Shares Polkadot Trust, sponsored by 21Shares US LLC, is designed to track the performance of DOT using the CME CF Polkadot-Dollar Reference Rate. The digital assets would be securely held by Coinbase Custody, and the trust would issue or redeem shares in blocks of 10,000, settled entirely in cash. The SEC’s review will focus on whether the proposal complies with section 6(b)(5) of the Securities Exchange Act, which requires that exchange listings must prevent fraud, manipulation, and protect investors.

The SEC has also opened a comment window to seek public input. Interested parties, including investors, legal experts, and industry stakeholders, are invited to submit written comments within 21 days of the proposal’s publication in the Federal Register. Those wishing to submit rebuttals will have 35 days from the publication date. This move by the SEC is significant for 21Shares and other ETF issuers looking to expand beyond Bitcoin and Ethereum. The decision will serve as a critical benchmark, especially with the new chairman Paul Atkins, who has garnered high hopes from crypto enthusiasts.