Canary Capital Files for Sei ETF, Aims to Offer Staking Rewards

Canary Capital, a prominent issuer of crypto funds, has submitted an application to the U.S. Securities and Exchange Commission (SEC) for the first exchange-traded fund (ETF) focused on sei, the token of the Sei layer-1 blockchain. This filing, made on Thursday, marks a significant step in the evolution of crypto investment products. The Canary Staked Sei ETF is designed to provide investors with exposure to the price of Sei while also offering the opportunity to earn additional yield through staking.

The ETF's investment objective is to provide exposure to the price of Sei held by the Trust, with a secondary objective of earning additional Sei through the validation of transactions in the Sei Network’s proof-of-stake process. Staking, a process where proof-of-stake coins or tokens are pledged to a network in exchange for rewards, is a key feature of this ETF. This allows investors to not only benefit from the price movements of Sei but also from the rewards generated through staking.

Canary Capital's application adds to its growing list of altcoin-focused funds, which includes ETFs based on Litecoin, Pengu, and Sui. Sei, currently the 85th most valuable cryptocurrency by market cap, has seen recent price movements, trading at just over $0.225 after a 7% jump in 24 hours. This filing comes at a time when the SEC has a growing stack of crypto ETF applications awaiting review, reflecting the increasing interest in crypto investment products.

Top asset managers have been actively seeking regulatory approval for various crypto ETFs since the U.S. President Donald Trump entered the White House, campaigning to reduce regulation and support the crypto space. Under former SEC Chair Gary Gensler, the SEC was initially hesitant to approve spot Bitcoin ETFs. However, when the regulator finally gave the green light to these products in early 2024, they experienced the most successful launch in ETF history. The SEC also approved Ethereum ETFs last year, although they have not seen the same level of trading activity as their Bitcoin counterparts. Fund managers are now hopeful that the SEC will approve funds tracking the price of other digital coins such as Solana, Dogecoin, and XRP.