Correspondence 0001213900-24-112541 from Hashdex Nasdaq Crypto Index US ETF (NCIQ) (CIK 0002031069) (NCIQ)
Hashdex Nasdaq Crypto Index US ETF (NCIQ) (CIK 0002031069)
Date: Dec. 26, 2024 · CIK: 0002031069 · Accession: 0001213900-24-112541
AI Filing Summary & Sentiment
File numbers found in text: 333-280990
Referenced dates: August 20, 2024, December 6, 2024
Letter
1900 K Street, NW
Washington, DC 20006-1110
+1 202 261 3300 Main
+1 202 261 3333 Fax
www.dechert.com
ADAM T. TEUFEL
adam.teufel@dechert.com
+1 202 261 3464 Direct
+1 202 261 3164 Fax
December 26, 2024
Via EDGAR
U.S. Securities and Exchange Commission
Division of Corporation Finance
Office of Crypto Assets
100 F Street, N.E.
Washington, DC 20549
Attention: Irene Paik
J. Nolan McWilliams
Kate Tillan
Jason Niethamer
Re: Hashdex Nasdaq Crypto Index US ETF
Amendment No. 2 to Registration Statement on Form S-1
Filed November 25, 2024
File No. 333-280990
Ladies and Gentlemen:
On behalf of our client, Hashdex Nasdaq Crypto Index US ETF (the “Trust” or the “Registrant”), we submit this letter in response to comments from the staff (the “Staff”) of the Securities and Exchange Commission (“SEC” or the “Commission”) received by letter dated December 6, 2024 (the “Comment Letter”), relating to the Trust’s Registration Statement on Form S-1 (File No. 333-280990) filed with the Commission on November 25, 2024 (the “Registration Statement”). On behalf of the Trust, we are concurrently filing via EDGAR Pre-Effective Amendment No. 3 to the Registration Statement on Form S-1 (the “Amendment”).
The Amendment and this correspondence provide the Registrant’s responses to the Comment Letter.
Each of the Staff’s comments from the Comment Letter is repeated below in italics and followed by the Registrant’s response. Capitalized terms used, but not defined, herein are used with the same meaning given to them in the Amendment. Any disclosure changes made in response to the Staff’s comments, as set forth below, in one place are also made in other applicable places of the prospectus contained in the Amendment (the “Prospectus”).
Amendment No. 2 to Registration Statement on Form S-1
Risk Factors
The Trust’s Operating Risks, page 36
1. To the extent material, please include risk factor disclosure that addresses the risks related to your Crypto Custodians and the Prime Execution Agent acting in the same capacity for several competing products.
Response: The Prospectus has been revised accordingly.
Prospectus Summary, page 1
Business of the Trust
The Trust’s Benchmark, page 65
2. We note your revised disclosure on page 66. Please revise for consistency your disclosure on page 65 indicating that “there are no crypto assets other than bitcoin and ether that are eligible for inclusion in the Index based on whether they serve as an underlying asset for a derivative instrument listed on a U.S.-regulated derivatives platform.” Please also disclose whether Nasdaq or the NCIOC has explained why avalanche, chainlink and litecoin are not included in the Index in spite of meeting the eligibility criteria, and if so, describe the reasons.
Response: Nasdaq does not provide specific reasons for assets that are not included in any index. Their Crypto Indexes methodology states on page 3: “Notwithstanding inclusion in the eligible list, the Nasdaq Index Management Committee reserves the right to further exclude any additional assets based on one or more factors, including but not limited to, its review of general reputational, fraud, manipulation, or security concerns connected to the asset. Assets that, in the sole discretion of the Nasdaq Index Management Committee, do not offer utility, do not facilitate novel use cases, or that do not exhibit technical, structural or crypto-economic innovation (e.g., assets inspired by memes or internet jokes) may also be excluded.”
Coinbase PBA, page 74
3. We note your disclosure on page 41 that the Coinbase PBA has been agreed in principle and “upon execution will reflect the disclosed terms” and your discussion of the terms of the Coinbase PBA starting on page 74. Please confirm that upon execution of the Coinbase PBA, it will be filed as an exhibit to the registration statement in a pre-effective amendment, and the material terms of the agreement will be disclosed in more detail, including but not limited to:
● Whether customer assets are held in segregated accounts and not commingled;
● Quantification of the limitations on liability of Coinbase Custody;
● The geographic location of the private keys;
● The amount of coverage provided by Coinbase Custody’s insurance policy and any coverage limitations;
● More detailed information about how Coinbase, Inc. will be compensated under the Master Trading Agreement;
● More detailed information about who will be responsible for fees associated with crypto transactions; and
● Whether there are any limits on the percentage or amount of Trust’s assets that may be held at the Prime Execution Agent at any point in time.
Response: We confirm that, upon execution, the Coinbase PBA will be filed as an exhibit to the registration statement, and its material terms will be disclosed in further detail.
Regarding the last item, the Trust will not impose formal limits on the percentage or amount of Trust assets that may be held at a Prime Execution Agent at any given time. However, the Sponsor will implement a counterparty risk assessment process to determine appropriate asset allocations among Custodians, the Prime Execution Agent, and other Crypto Trading Counterparties.
The Trust’s Service Providers, page 90
4. Refer comment 37 of our letter dated August 20, 2024. Please revise to:
● Identify any Crypto Trading Counterparties with whom the Sponsor has entered into an agreement;
● Describe the approval process of Crypto Trading Counterparties, including any specific criteria for engagement as a Crypto Trading Counterparty, such as whether the Crypto Trading Counterparty may be an affiliate of the Trust and/or Sponsor; and
● Disclose the material terms of any agreement you have with Crypto Trading Counterparties, including whether and to what extent there will be any contractual obligations on the part of the Crypto Trading Counterparties to participate in cash orders for creations or redemptions.
Response: The Prospectus has been revised accordingly
* * *
Sincerely,
/s/ Adam T. Teufel
Show Raw Text
CORRESP
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filename1.htm
1900 K Street, NW
Washington, DC 20006-1110
+1 202 261 3300 Main
+1 202 261 3333 Fax
www.dechert.com
ADAM T. TEUFEL
adam.teufel@dechert.com
+1 202 261 3464 Direct
+1 202 261 3164 Fax
December 26, 2024
Via EDGAR
U.S. Securities and Exchange Commission
Division of Corporation Finance
Office of Crypto Assets
100 F Street, N.E.
Washington, DC 20549
Attention:
Irene Paik
J. Nolan McWilliams
Kate Tillan
Jason Niethamer
Re: Hashdex
Nasdaq Crypto Index US ETF
Amendment No. 2 to Registration Statement on Form S-1
Filed November 25, 2024
File No. 333-280990
Ladies and Gentlemen:
On behalf of our client, Hashdex Nasdaq Crypto Index US ETF (the “Trust”
or the “Registrant”), we submit this letter in response to comments from the staff (the “Staff”)
of the Securities and Exchange Commission (“SEC” or the “Commission”) received by letter dated December
6, 2024 (the “Comment Letter”), relating to the Trust’s Registration Statement on Form S-1 (File No. 333-280990)
filed with the Commission on November 25, 2024 (the “Registration Statement”). On behalf of the Trust, we are concurrently
filing via EDGAR Pre-Effective Amendment No. 3 to the Registration Statement on Form S-1 (the “Amendment”).
The Amendment and this correspondence provide the Registrant’s
responses to the Comment Letter.
Each of the Staff’s comments from the Comment Letter is repeated
below in italics and followed by the Registrant’s response. Capitalized terms used, but not defined, herein are used with the same
meaning given to them in the Amendment. Any disclosure changes made in response to the Staff’s comments, as set forth below, in
one place are also made in other applicable places of the prospectus contained in the Amendment (the “Prospectus”).
Amendment No. 2 to Registration Statement on Form S-1
Risk Factors
The Trust’s Operating Risks, page 36
1. To the extent material, please include risk factor disclosure
that addresses the risks related to your Crypto Custodians and the Prime Execution Agent acting in the same capacity for several competing
products.
Response: The Prospectus has been revised accordingly.
Prospectus Summary, page 1
Business of the Trust
The Trust’s Benchmark, page 65
2. We note your revised disclosure on page 66. Please revise for
consistency your disclosure on page 65 indicating that “there are no crypto assets other than bitcoin and ether that are eligible
for inclusion in the Index based on whether they serve as an underlying asset for a derivative instrument listed on a U.S.-regulated derivatives
platform.” Please also disclose whether Nasdaq or the NCIOC has explained why avalanche, chainlink and litecoin are not included
in the Index in spite of meeting the eligibility criteria, and if so, describe the reasons.
Response: Nasdaq does not provide specific reasons for assets
that are not included in any index. Their Crypto Indexes methodology states on page 3: “Notwithstanding inclusion in the eligible
list, the Nasdaq Index Management Committee reserves the right to further exclude any additional assets based on one or more factors,
including but not limited to, its review of general reputational, fraud, manipulation, or security concerns connected to the asset. Assets
that, in the sole discretion of the Nasdaq Index Management Committee, do not offer utility, do not facilitate novel use cases, or that
do not exhibit technical, structural or crypto-economic innovation (e.g., assets inspired by memes or internet jokes) may also be excluded.”
Coinbase PBA, page 74
3. We note your disclosure on page 41 that the Coinbase PBA has
been agreed in principle and “upon execution will reflect the disclosed terms” and your discussion of the terms of the Coinbase
PBA starting on page 74. Please confirm that upon execution of the Coinbase PBA, it will be filed as an exhibit to the registration statement
in a pre-effective amendment, and the material terms of the agreement will be disclosed in more detail, including but not limited to:
● Whether customer assets are held in segregated accounts and not commingled;
● Quantification of the limitations on liability of Coinbase Custody;
● The geographic location of the private keys;
● The amount of coverage provided by Coinbase Custody’s insurance policy
and any coverage limitations;
● More detailed information about how Coinbase, Inc. will be compensated
under the Master Trading Agreement;
● More detailed information about who will be responsible for fees associated
with crypto transactions; and
● Whether there are any limits on the percentage or amount of Trust’s assets
that may be held at the Prime Execution Agent at any point in time.
Response: We confirm that, upon execution, the Coinbase PBA
will be filed as an exhibit to the registration statement, and its material terms will be disclosed in further detail.
Regarding the last item, the Trust will not impose formal limits on the percentage or amount of Trust assets that may be held at a Prime
Execution Agent at any given time. However, the Sponsor will implement a counterparty risk assessment process to determine appropriate
asset allocations among Custodians, the Prime Execution Agent, and other Crypto Trading Counterparties.
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The Trust’s Service Providers, page 90
4. Refer comment 37 of our letter dated August 20, 2024. Please
revise to:
● Identify any Crypto Trading Counterparties with whom the Sponsor has entered
into an agreement;
● Describe the approval process of Crypto Trading Counterparties, including
any specific criteria for engagement as a Crypto Trading Counterparty, such as whether the Crypto Trading Counterparty may be an affiliate
of the Trust and/or Sponsor; and
● Disclose the material terms of any agreement you have with Crypto Trading
Counterparties, including whether and to what extent there will be any contractual obligations on the part of the Crypto Trading Counterparties
to participate in cash orders for creations or redemptions.
Response: The Prospectus has been revised accordingly
* * *
Sincerely,
/s/ Adam T. Teufel
Adam T. Teufel
cc: Samir
Kerbage, Hashdex
Julia Castelo Branco Rocha, Hashdex
Davi Marques, Hashdex
Neel Maitra, Dechert LLP
Anna Tomczyk, Dechert LLP
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