Nikolas Sargeant
Crypto asset manager 21Shares has filed with the US Securities and Exchange Commission to launch an exchange-traded fund tracking the price of SEI, entering a competitive race with Canary Capital for the first SEI ETF. The S-1 registration statement filed Thursday proposes using CF Benchmarks to track SEI's price through data from multiple cryptocurrency exchanges, with Coinbase Custody Trust Company serving as the token custodian.
SEI operates as the native token of the SEI network, a layer-1 blockchain launched in August 2023 that specializes in trading infrastructure for decentralized exchanges and marketplaces. The token functions both as a means to pay network gas fees and participate in governance decisions. Currently trading at $0.30 after a 4.2% daily increase, SEI ranks 74th by market capitalization according to CoinGecko data.
The 21Shares filing notably explores the possibility of staking SEI tokens to generate additional returns for investors, though the company acknowledges it's still investigating potential legal, regulatory, and tax risks associated with this approach. This staking component could provide passive income opportunities for ETF holders, similar to what Canary Capital proposed in its April filing for a competing SEI ETF that would offer "direct exposure to staked SEI" with "passive income via staking rewards."
The SEI ETF applications represent part of a broader trend as crypto ETF issuers expand beyond Bitcoin and Ethereum. 21Shares already operates the ARK 21Shares Bitcoin ETF and has pending applications for ETFs tracking SUI, XRP, and Ondo tokens. Meanwhile, other major issuers including VanEck, Bitwise, and Grayscale are pursuing ETFs for various cryptocurrencies including Solana, Cardano, and even memecoins like Dogecoin, as the SEC reportedly explores streamlined approval processes that could accelerate future launches.
