Regulators Test Waters for First Staked Crypto ETF in U.S. Markets

The U.S. Securities and Exchange Commission (SEC) has initiated a public comment period for a proposed staked Injective (INJ) Exchange-Traded Fund (ETF), led by crypto platform Canary. This development marks a significant step in the regulatory landscape for crypto-backed financial products, as the SEC seeks to evaluate the compliance and feasibility of such instruments. The proposed ETF would represent a novel integration of blockchain-based tokenization and traditional financial markets, offering investors exposure to INJ tokens through a regulated vehicle [1].

Injective, a layer-1 blockchain protocol, has positioned itself as a high-performance platform for decentralized finance (DeFi) applications. Its native token, INJ, is currently priced at $14.47, with a market capitalization of $1.45 billion. Over the past 24 hours, INJ has shown moderate volatility, trading between $12.92 and $15.04. Its all-time high stands at approximately $52.75, while its lowest recorded price is $0.6557. The token’s circulating supply is 99.97 million, with a total supply capped at 100 million [1].

The proposed ETF is part of a broader strategy by Injective to expand its utility beyond the DeFi space. The platform recently integrated with investment platform Republic, aiming to democratize access to private market assets. This partnership allows Republic users to invest in privately-held firms through blockchain-based financial instruments such as “Mirror Tokens,” which track shares of companies like SpaceX. Republic, a FINRA-registered funding portal with operations in multiple jurisdictions, brings a layer of institutional credibility to the collaboration [2].

The integration between Republic and Injective also includes technical and regulatory benefits. Republic, having previously become a validator on the Injective network, now enables direct interoperability between Injective’s high-performance Layer 1 blockchain and Republic’s tokenized investment ecosystem. This collaboration could potentially streamline the tokenization of private assets and expand the reach of institutional-grade blockchain solutions to retail investors [2].

The proposed staked INJ ETF aligns with broader industry trends, including the tokenization of traditional assets and the increasing convergence of crypto and conventional financial instruments. If approved, the ETF would represent the first of its kind in the U.S., offering a regulated avenue for investors to gain exposure to staked INJ tokens. This development could serve as a model for future crypto-backed ETFs and influence how the SEC handles similar proposals from other platforms.

Investors and industry participants are closely monitoring the SEC’s evaluation process, as the outcome may set a precedent for the regulatory treatment of blockchain-based financial products. With market interest in crypto ETFs growing and the broader crypto market showing resilience despite macroeconomic headwinds, the proposed staked INJ ETF could attract both institutional and retail demand, provided it meets regulatory standards and investor expectations [1].

Source:

[1] Injective Price Today: Live INJ-to-USD (https://www.mexc.com/price/INJ)

[2] Injective teams with Republic as part of push to democratize investing in private firms like SpaceX (https://www.theblock.co/post/367840/injective-teams-with-republic-as-part-of-push-to-democratize-investing-in-private-firms-like-spacex)