Ethereum News Today: 21Shares Files for SEI ETF as SEC Weighs Staking Risks

21Shares, a prominent crypto asset manager, has filed an S-1 registration statement with the U.S. Securities and Exchange Commission (SEC) to launch an exchange-traded fund (ETF) tracking the price of SEI, the native token of the Sei network. The proposed 21Shares SEI ETF aims to provide institutional and retail investors with direct exposure to the token, expanding the firm’s lineup of crypto-backed products in the U.S. The filing was submitted on August 28, 2025, and follows Canary Capital’s earlier application for an SEI ETF in April [1]. The fund is designed as a passive investment vehicle, meaning it will track the CF SEI-Dollar Reference Rate—New York Variant, a benchmark provided by CF Benchmarks Ltd.—without using leverage, derivatives, or active trading strategies [2].

The Sei network, launched in August 2023, is a layer 1 blockchain optimized for decentralized trading infrastructure. Its native token, SEI, can be used to pay for gas fees and participate in network governance. As of the filing date, SEI traded at $0.30, with a 4.2% increase in the previous 24 hours. According to CoinGecko, SEI ranks 74th in market capitalization among cryptocurrencies [1]. The proposed ETF also includes a potential staking component, allowing the fund to generate additional returns from staking rewards, provided no legal, regulatory, or tax risks arise. If approved, the fund would join a growing list of crypto ETFs seeking entry into the U.S. market, which currently lacks spot ETFs for altcoins beyond Bitcoin and Ethereum [1].

Coinbase Custody Trust Company has been designated as the SEI custodian for the ETF. The firm will hold the tokens in cold storage to mitigate the risks of cyber threats, a practice that has become standard in the custody of digital assets. The ETF will not actively trade SEI tokens except in cases related to the issuance and redemption of shares. Authorized participants, typically large financial institutions, will facilitate these transactions, either in-kind or through cash conversions via designated counterparties [2]. This structure allows investors to gain exposure to SEI through traditional brokerage platforms without the need to manage or store the underlying crypto tokens directly [2].

The SEC’s approval process for crypto ETFs remains cautious, as evidenced by the delays in rulings on previous applications, including 21Shares’ Polkadot ETF and Grayscale’s proposed staking additions to its Ethereum fund. The regulatory uncertainty surrounding staking has also affected the proposed SEI ETF, with the firm explicitly stating that it will not proceed with staking unless it is deemed legally and tax-compliant. The SEC has, however, signaled a potential shift in its approach, with reports indicating that it is exploring a streamlined approval process that could reduce the time to market for new ETFs. Under this proposed system, issuers would submit the standard S-1 form and receive automatic approval if the SEC does not raise formal objections within 75 days [1].

The filing of the 21Shares SEI ETF underscores the increasing demand for diversified exposure to altcoins in the U.S. market, where interest in Ethereum and Bitcoin ETFs has already shown strong investor appetite. The firm has previously launched the ARK 21Shares Bitcoin ETF and applied for ETFs tracking SUI and XRP, while other major players such as VanEck, Bitwise, and Grayscale have submitted applications for funds tied to Solana, Cardano, and even memecoins like Dogecoin. If the SEC approves the SEI ETF, it could serve as a catalyst for broader adoption of altcoin-based exchange-traded products, further bridging the gap between traditional finance and the crypto market [1].

Source:

[1] 21Shares Files SEI ETF SEC Filing (https://cointelegraph.com/news/21shares-files-sei-etf-sec-filing-crypto-staking)

[2] 21Shares Seeks SEC Nod to Launch First SEI ETF (https://coingape.com/21shares-seeks-sec-nod-to-launch-first-sei-etf/)

[3] 21Shares Core Ethereum ETF (https://www.21shares.com/en-us/products-us/teth)

[4] 21Shares Files for Sei ETF with Possible Staking as SEC Reviews Altcoin Funds (https://www.theblock.co/post/368732/21shares-files-for-sei-etf-with-possible-staking-as-sec-reviews-altcoin-funds)