Canary Capital Files Amended SOL ETF With Staking Feature

Canary Capital, an asset management firm, has submitted an amended filing for a U.S. spot Solana (SOL) exchange-traded fund (ETF) that includes a staking feature. This move aims to enhance investor returns by generating revenue through direct SOL exposure and staking rewards. The amended S-1 filing with the Securities and Exchange Commission (SEC) outlines that Canary Capital will collaborate with Marinade Finance as the staking provider. The trust, named Canary Marinade Solana ETF, seeks to provide exposure to the price of SOL held by the Trust and to earn additional SOL through the validation of transactions in the SOL network’s proof-of-stake (PoS) process.

The SEC’s decision on Canary Capital’s previous SOL ETF application was due in early June, but the regulator may reject the staking request. When asked about the likelihood of approval, an ETF analyst stated that it is unlikely, particularly with the inclusion of staking. The analyst noted that the SEC is not yet ready to approve staking in the ETF Grantor Trust wrapper. Despite recent discussions between the SEC’s Crypto Task Force and stakeholders on ETF staking, tokenization, and other issues, recent requests for spot ETH ETFs by various issuers have been delayed. However, experts remain hopeful that the SEC may greenlight altcoin ETFs by July or October.

Despite the regulatory hurdles, the amended filing by Canary Capital represents a significant step forward in the integration of staking features within ETFs. The inclusion of staking could potentially attract more investors by offering higher returns through both capital appreciation and staking rewards. This development underscores the growing interest in cryptocurrency ETFs and the potential for innovative financial products that cater to the evolving needs of investors.

While the SEC’s stance on staking in ETFs remains cautious, the amended filing by Canary Capital highlights the ongoing efforts by asset managers to push the boundaries of traditional financial products. The collaboration with Marinade Finance as a staking provider further demonstrates the industry’s commitment to exploring new avenues for generating returns in the cryptocurrency space. As the regulatory landscape continues to evolve, the approval of staking features in ETFs could pave the way for more sophisticated and attractive investment options for investors.