Crypto asset manager 21Shares has made a significant move in the digital asset space by filing with the US Securities and Exchange Commission (SEC) to introduce an exchange-traded fund (ETF) that tracks the price of SEI. This filing follows a similar application by Canary Capital earlier this year in April.
The S-1 registration statement submitted to the SEC on Thursday outlines plans to use CF Benchmarks, a renowned crypto price index provider, to monitor SEI’s price. This will involve aggregating data from multiple cryptocurrency exchanges to ensure accuracy and reliability.
SEI is the native token of the SEI network, a layer-1 blockchain that launched in August 2023. This blockchain is designed specifically for trading infrastructure, focusing on decentralized exchanges and marketplaces. The SEI token serves various functions, including paying for network gas fees and participating in governance decisions.
To ensure asset security, Coinbase Custody Trust Company has been chosen to act as the custodian for SEI. Additionally, 21Shares has proposed the possibility of staking SEI to generate extra returns. However, the firm has noted in its filing that it is still evaluating any potential “undue legal, regulatory, or tax risk.”
Race for First SEI ETF
Currently, the US market only has approved spot crypto ETFs for Bitcoin and Ethereum. Several applications have been submitted for ETFs targeting other cryptocurrencies, but none have yet gained approval.
In a post on X (formerly Twitter) on Thursday, 21Shares highlighted the significance of their ETF filing, describing it as a “key milestone in our vision to expand exchange-traded access to the SEI Network.” Representatives from Cointelegraph have reached out to 21Shares for more insights on this development.
As of now, SEI is trading at $0.30, experiencing a 4.2% increase in the last 24 hours. According to CoinGecko, SEI holds the 74th position in terms of market capitalization.
Another SEI ETF Has Already Been Filed
Canary Capital, a US digital asset investment firm, submitted an application for an SEI ETF in April. This ETF aims to provide both institutional and retail investors with direct exposure to staked SEI, offering passive income through staking rewards, as outlined in a statement from the SEI network on April 30.
Justin Barlow, the executive director at the Sei Development Foundation, commented on Canary Capital’s filing, emphasizing that ETFs act as a “gateway for broader adoption, providing a vital bridge between crypto and mainstream markets.”
A Flood of Other ETF Applications Waiting in the Wings
21Shares already offers several ETFs, including the ARK 21Shares Bitcoin ETF, which tracks Bitcoin (BTC) prices. The company has also applied for ETFs to track other digital assets such as SUI (SUI), XRP (XRP), and Ondo, the token associated with DeFi platform Ondo Finance.
Other ETF issuers, including VanEck, Bitwise, and Grayscale, have submitted applications for cryptocurrencies like Solana (SOL), while others are pursuing products linked to XRP, Cardano (ADA), and even memecoins like Dogecoin (DOGE).
In an effort to streamline the approval process, the SEC is reportedly considering a simplified listing structure that could automate a significant portion of the procedure. According to crypto journalist Eleanor Terrett, under this proposed system, issuers would submit the standard SEC form S-1 and wait 75 days. If the SEC does not issue a formal objection within this period, the ETF would be automatically approved for listing, potentially reducing the back-and-forth communication between fund managers and the regulator.
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