Canary Files TRUMP Token ETF Amid Regulatory Hurdles and 69% Price Drop

Canary Capital has filed with the U.S. Securities and Exchange Commission (SEC) for the Canary Trump Coin ETF, a proposed exchange-traded fund that would directly hold Official Trump (TRUMP) tokens. This filing marks a potential milestone in token-backed exchange-traded products (ETPs), offering investors exposure to a memecoin through a traditional ETF structure. The product would not rely on a futures contract to track TRUMP, which raises regulatory questions about its eligibility for approval [1].

A key challenge for the ETF’s approval is the absence of a six-month active futures market for TRUMP, a standard requirement for many crypto ETFs. Eric Balchunas, an ETF analyst with Bloomberg, noted that the lack of a well-established futures product could hinder the SEC’s approval process. This hurdle may prompt Canary to pursue a different regulatory route, potentially under the Investment Company Act of 1940 (a “40 Act” fund), which some recent crypto products have adopted [1].

The TRUMP token, which is ranked 55th by market capitalization, has experienced a significant decline, falling 69% from its January all-time high. As of the filing date, it was trading at $8.40 according to CoinMarketCap [1]. Analysts have expressed concerns over the token’s volatility, governance structure, and lack of broader institutional adoption, all of which could impact the ETF’s viability.

Canary Capital officially established the legal entity for the proposed ETF with the Delaware State Department on August 14, 2025 [1]. The company is not the only firm pursuing a TRUMP-based ETF. REX Financial has also submitted a filing for an ETF that would track TRUMP using a 1940 Act structure, though it would invest in shares of an offshore vehicle rather than holding the token directly.

The ETF filing includes a number of risk disclosures, particularly emphasizing the speculative nature of the investment. The fund explicitly warns that it may not be suitable for investors who cannot tolerate high levels of risk. REX Financial’s CEO, Greg King, has publicly advised caution when selecting tokens outside the top 20 by market capitalization, describing smaller-cap tokens as “pretty sketchy” [1].

While the SEC review process for ETFs can vary in length, it often takes several months and may extend beyond a year when additional safeguards or documentation are required. The use of a 1940 Act structure could influence both the timeline and the conditions for approval [1].

The filing represents a novel approach to token-backed ETFs, with the potential to expand the range of digital assets available to traditional investors. However, the absence of a futures market, regulatory scrutiny over custody and valuation, and the token’s market position are all critical factors that could determine the ETF’s success. Investors and market participants will be closely watching for updates from the SEC and further developments from rival ETF issuers [1].

Source: [1] Canary Seeks TRUMP ETF, Analyst Says Absence of Six-Month Futures Could Hamper SEC Approval (https://en.coinotag.com/canary-seeks-trump-etf-analyst-says-absence-of-six-month-futures-could-hamper-sec-approval/)