Canary Capital Establishes Trust for Staked Injective ETF in Delaware

Canary Capital, a prominent asset manager, has taken a significant step towards launching an exchange-traded fund (ETF) focused on the Injective token by establishing a trust in Delaware. This move is a common initial step for ETF issuers, as it sets the stage for further regulatory filings with the Securities and Exchange Commission (SEC). The Delaware Division of Corporations website confirms the formation of the entity “Canary Staked INJ ETF” on Monday, indicating Canary Capital's intent to offer a fund based around staked Injective (INJ).

The creation of a Delaware trust does not necessarily mean that Canary Capital will proceed with launching an ETF, but it is a strong indicator of their plans. Several crypto-tracking ETFs have started with the creation of a Delaware-based trust, suggesting that this could be a precursor to a formal ETF launch. Canary Capital has previously filed for an ETF in April to hold the Tron blockchain’s native token, TRX, and stake a portion of the tokens to generate yield. This experience could provide valuable insights into the regulatory and operational challenges of launching a staked crypto ETF.

The Injective token, which powers the Injective blockchain, has seen a modest rally in recent days, with a 3.7% gain over the last 24 hours following the announcement of the Delaware trust. The blockchain, which focuses on artificial intelligence agents and tokenizing real-world assets and stocks, has also experienced a slight uptick in transactions and users over the past week. This positive market sentiment could be attributed to the potential for increased liquidity and investment opportunities that an ETF would bring.

However, the regulatory landscape for crypto-staking ETFs remains uncertain. The SEC has expressed concerns that such ETFs might not comply with securities laws, as they could fail to meet the definition of an investment company. This regulatory hurdle was highlighted in a recent letter from the SEC to REX Financial and Osprey Funds, which are seeking to launch ETFs tracking Ether (ETH) and Solana (SOL) with staking. Despite these concerns, analysts remain optimistic that the companies and the SEC can find a way to overcome the legal challenges.

Canary Capital's move to create a Delaware trust for a staked Injective ETF is a significant development in the crypto ETF space. While the regulatory environment poses challenges, the potential for increased investment and liquidity in the Injective token could drive further market interest and growth. As the process unfolds, it will be crucial to monitor the regulatory developments and market reactions to assess the viability and impact of a staked Injective ETF.