Solana News Today: Cboe Files First U.S. Staked INJ ETF as SEC Clarifies Staking Rules

Cboe Global Markets’ BZX Exchange has initiated a regulatory process to list the Canary Staked Injective (INJ) ETF, a proposed exchange-traded fund targeting exposure to staked Injective tokens. The filing, submitted under Rule 14.11 by Cboe BZX, follows Canary Capital Group’s S-1 application with the U.S. Securities and Exchange Commission (SEC) on June 27 [1]. The ETF aims to replicate the performance of Injective’s native token while incorporating staking rewards, positioning itself as the first U.S. regulated product tied to a staked Layer-1 blockchain asset [2]. If approved, it would join recently sanctioned staked ETFs for Solana and Ether, marking a broader acceptance of blockchain staking within institutional investment frameworks [3].

The Cboe’s 19b-4 filing underscores a shift in U.S. regulatory attitudes, particularly under the Biden administration, which has shown increased openness to crypto innovation. A pivotal May SEC ruling clarified that staking does not inherently constitute an investment contract, resolving longstanding legal ambiguities [4]. Alison Mangiero of the Crypto Council for Innovation described this guidance as a “major step forward,” emphasizing that staking is integral to blockchain operations rather than a securities activity [5]. The Canary Staked INJ ETF leverages this regulatory clarity, offering investors a vehicle to earn staking yields without directly managing node infrastructure [6].

The proposed fund’s structure mirrors recent staked ETF models, where tokens are delegated to a “qualified staking platform” to generate rewards, which are then distributed to ETF shares. This approach differentiates it from traditional crypto ETFs, which merely hold tokens without active yield generation. Cboe’s prior approval of a Solana spot ETF in July highlights its strategic push to diversify crypto offerings, though the staked INJ ETF’s focus on Layer-1 infrastructure distinguishes it from existing products [7]. Analysts suggest the fund could attract both institutional and retail investors seeking a balance between blockchain exposure and passive income, though regulatory delays remain a risk [8].

Market dynamics for the Injective token (INJ) remain mixed. While the token has surged 33% in recent months, it still trades below its all-time high of $52, set on March 14, 2024 [9]. The ETF’s approval could amplify liquidity and investor interest, particularly if historical ETF inflows for Bitcoin and Ethereum serve as precedents. For instance, Bitcoin’s price exceeded $50,000 in February 2024 after spot ETF approvals, with 75% of price gains attributed to institutional inflows. However, Ethereum’s post-ETF performance has been less robust, with its price dropping 38% within two weeks of launch due to outflows from Grayscale’s ETHE fund [10].

The SEC’s timeline for the staked INJ ETF remains uncertain. While acknowledgment of the filing could occur by early September, the full review process may extend up to 240 days, pushing a final decision to March 2026 [11]. This extended timeline reflects the agency’s cautious approach to novel crypto products, despite recent regulatory advancements. Investors will likely monitor broader market trends and institutional adoption rates, as the success of staked ETFs hinges on both regulatory and market confidence.

Cboe’s initiative underscores the evolving intersection of traditional finance and blockchain technology. By partnering with Canary Capital, the exchange aims to offer a product that bridges decentralized infrastructure and conventional market access. The proposed ETF also highlights the role of U.S. exchanges in pioneering financial instruments, as global markets increasingly recognize crypto’s potential.

Sources:

[1] Cointelegraph

https://cointelegraph.com/news/cboe-staked-inj-etf-of-canary-capital

[2] The Block

https://www.theblock.co/post/364524/cboe-equities-exchange-takes-the-next-step-and-files-for-canarys-staked-inj-fund

[3] X (BSCNews)

https://x.com/BSCNews/status/1950054946650673354

[4] Bitget

https://www.bitget.com/news/detail/12560604883699

[5] CoinGape

https://coingape.com/cboe-files-to-list-invesco-galaxy-solana-etf/

[6] BTCC

https://www.btcc.com/en-US/square/coincentral/705782