Defiance filed notice with the SEC on July 24 that its BMNR Option Income ETF (YBMN) is closing. The board of ETF Series Solutions Trust approved the shutdown. Portfolio liquidation starts on or about August 13. Trading halts and the fund delists on or about August 21. That’s ten days from today.

We’ve written this exact post three times this month already — Bitwise’s six crypto option-income funds, Hashdex’s spot Bitcoin ETF, and now this one. At some point the pattern stops being news and starts being a checklist. YBMN just gave us the cleanest version of it yet: a fund advertising a 44.40% annualized distribution rate, where 96% of that distribution was the fund handing investors back their own money, wrapped around a single stock — BitMine Immersion Technologies (BMNR) — that’s down 89% from its all-time high.

Quick Verdict: What Happened to YBMN

Fact	Detail
Fund	Defiance BMNR Option Income ETF (YBMN)
Underlying	BitMine Immersion Technologies (BMNR), an Ethereum treasury company
SEC filing	Form 497, filed July 24, 2026
Portfolio liquidation begins	On or about August 13, 2026
Delisting / final trade	On or about August 21, 2026
Advertised distribution rate	44.40% annualized
Return of capital share	96.00% of the most recent distribution
30-day SEC yield	2.01% (the actual income-based figure)
AUM heading into closure	~$3.24 million
YBMN launched	November 24, 2025
YBMN 1-year performance	Roughly -37%
BMNR vs. its all-time high	Down about 89% (from $161.00 on July 3, 2025 to $18.10 on August 10, 2026)

Bottom line: YBMN didn’t fail because Bitmine had a rough quarter. It failed because a 44% headline yield was never real income — it was principal coming back to shareholders while the underlying stock lost almost 90% of its value — and once the AUM fell into low single-digit millions, the fund had no realistic path to staying open.

What Defiance Actually Filed

The mechanics are the same closure playbook we’ve now covered for Bitwise’s six funds and Hashdex’s DEFI, just compressed into a smaller fund with a shorter runway. The board approved Defiance’s proposal to close and liquidate YBMN. Starting on or about August 13, the fund stops running its normal strategy and begins converting its options positions and BMNR exposure to cash. It stops accepting new creation units after the close of business the day before the liquidation date. Trading halts before market open on or about August 21, and shareholders who haven’t sold get cash, pro rata, automatically.

If you’re holding YBMN right now, there’s nothing to do to receive the payout. The decision that mattered was whether to sell before liquidity dried up, and that window is closing fast — by August 13, the fund isn’t running its normal strategy anymore, and secondary-market pricing typically gets uglier from there.

One more thing worth flagging: distributions along the way already reduced your cost basis. If 96% of what you received was return of capital, the tax math on the final liquidation isn’t the simple “I lost money, so no gain” story it might feel like. Check with a tax advisor before assuming the loss offsets anything.

The 44.40% Yield That Was 96% Return of Capital

Here’s the number that makes YBMN worth its own post instead of a footnote in the broader shakeout.

YBMN’s most recent distribution rate ran at 44.40% annualized. On paper, that’s a genuinely attractive income product — more than eight times what a high-yield savings account pays, more than four times a typical dividend stock. Except Defiance’s own 19(a)-1 notice, filed July 16, disclosed that 96.00% of that distribution was classified as return of capital. Not income. Not options premium the fund actually earned. Your own principal, mailed back to you and labeled a “distribution.”

The tell was sitting right next to it: YBMN’s 30-day SEC yield — the standardized, income-only measure regulators require funds to disclose — was 2.01%. That’s the real number. The 44.40% is what you get when you annualize a distribution that’s mostly capital return, and the gap between those two figures is the entire story of this fund.

Return of capital (ROC) is a distribution paid from an investor’s own principal rather than from income the fund actually generated. It reduces your cost basis, often coincides with a shrinking NAV, and can look identical to real income on a brokerage statement — until you check what the fund actually earned versus what it paid out. Apply that definition here and a 44% yield stops looking generous. It starts looking like a fund returning your money to you faster than the market was already taking it away through BMNR’s price decline.

BMNR Fell 89% From Its High — and YBMN Couldn’t Outrun It

YBMN exists to generate income by writing covered calls against BMNR, BitMine Immersion Technologies — a company that pivoted to an Ethereum treasury strategy in mid-2025 and became one of the most-watched, most-volatile tickers on the market for it. BMNR hit an all-time high of $161.00 on July 3, 2025. As of the August 10 close, it sat at $18.10. That’s a decline of roughly 89%, driven largely by Ethereum’s price collapsing well off its own highs over the same stretch.

A covered-call structure gives you premium income in exchange for capping your upside. It doesn’t insulate you from a nearly 90% decline in the reference stock — it just changes how that decline shows up. Instead of a straight mark-to-market loss, you get a NAV that erodes month over month while distributions keep flowing, funded increasingly by your own capital because the collected options premium alone can’t cover what the fund promised to pay out. YBMN launched November 24, 2025, already well after BMNR’s July peak, and is still down roughly 37% over its short life. We’ve documented this exact single-stock, treasury-company failure mode before with MSTY — a different issuer, a different ticker (MicroStrategy instead of Bitmine), the same structural trap.

Why a $3.24 Million Fund Doesn’t Survive

YBMN’s assets under management sat at roughly $3.24 million heading into the closure — barely a rounding error for an issuer running dozens of funds, and nowhere near enough for a 0.85% expense ratio to cover options execution, custody, index licensing, and compliance. On $3.24 million, that expense ratio generates well under $30,000 a year in gross fee revenue. Fund administration alone typically costs more than that.

That’s the same arithmetic behind the 13-fund closure wave from REX, YieldMax, and Defiance back in June and Bitwise’s six crypto funds this month: once AUM falls into low single-digit millions, the math stops working regardless of how the strategy performed on paper. The difference with YBMN is that the underperformance wasn’t subtle or hidden in a footnote. A 96% ROC disclosure and an 89%-off-highs underlying stock told investors exactly what was happening, and they redeemed accordingly.

How to Spot the Next One of These Before It Closes

Same framework we’ve built out across this site’s coverage of the 2026 income-ETF shakeout, applied to single-stock crypto and crypto-treasury option-income funds specifically:

1. Compare the advertised distribution rate to the 30-day SEC yield. A wide gap between the two — YBMN’s was 44.40% versus 2.01% — is the single fastest way to spot a fund funding its payout with your own capital instead of real income.
2. Read the most recent 19(a)-1 notice, not just the yield on the fund’s homepage. Every fund that pays distributions with any ROC component has to disclose the breakdown. If it’s above 50%, treat the advertised yield as fiction until proven otherwise.
3. Check the underlying stock’s decline from its all-time high, not just its 52-week range. BMNR’s 52-week high understated the real damage; the all-time high from July 2025 told the actual story.
4. Check AUM against $10 million. Below that line, an issuer’s fixed costs of running the fund typically exceed what the expense ratio can generate, and closure becomes a matter of when, not if.
5. Ask what specifically funds the yield. Options premium against a single volatile stock is a fundamentally less reliable income source than dividends from a diversified basket or interest income with an audit trail behind it.

None of that means every options-income ETF on a volatile stock is doomed. It means the headline yield is close to useless as a standalone number, and the honest read always starts with what percentage of the distribution is actually income.

The Bottom Line

YBMN advertised a 44.40% yield. Ninety-six percent of it was your own money coming back to you. The stock underneath it, BMNR, lost close to 90% of its value from its 2025 peak. And the fund — at $3.24 million in assets — never had the scale to survive that combination once investors started reading the distribution notices instead of just the headline number.

This is the fourth closure of this exact shape we’ve covered on this site since June. YieldMax and REX in June, Hashdex in early August, Bitwise’s six funds days ago, and now YBMN. If you’re holding anything that pairs a double-digit-plus yield with a single crypto-linked stock underneath it, pull the 19(a)-1 notice this week. The pattern isn’t subtle anymore, and it isn’t going away.

---

Liquidation details from Defiance’s SEC Form 497 filing, July 24, 2026. Distribution rate and return of capital figures per Dividend.com’s YBMN data page, citing Defiance’s July 16, 2026 19(a)-1 notice. AUM and fund performance per StockAnalysis.com. BMNR price history per StockAnalysis.com. This is not financial advice. Verify current fund status and your own cost basis before making tax or investment decisions.