Based on available reports, the CBOE BZX Exchange has filed with the U.S. Securities and Exchange Commission (SEC) to list the Canary PENGU ETF. If approved, this would be the first ETF to hold a meme coin and non-fungible tokens (NFTs) in a basket; a combination never seen in regulated finance.
Canary Capital Group LLC sponsors the proposed fund and will track PENGU, a utility token on the Solana blockchain, and Pudgy Penguin NFTs, one of the most popular Ethereum-based NFT collections. While crypto ETFs are no longer new, pairing internet culture assets into a regulated vehicle is an experiment in digital asset structuring.
A New Kind of Crypto ETF: What the Filing Says
Filed under Cboe BZX Rule 14.11(e)(4), which governs Commodity-Based Trust Shares, the application is for a Delaware statutory trust that will not be registered under the Investment Company Act of 1940 or recognized as a commodity pool. The ETF will be cash-settled and issue and redeem shares in 10,000-share blocks for cash only; no in-kind crypto redemptions or distributions.
The trust will hold 80–95% of its assets in PENGU tokens, 5–15% in Pudgy Penguin NFTs and small amounts of SOL and ETH for transaction fees and NFT purchases. At least 95% of total assets must be invested in PENGU and NFTs under normal market conditions.
Unlike traditional cryptocurrency ETFs that focus on tokens with their own blockchains like BTC or ETH, PENGU is described in the filing as a “digital collector’s item” and a “utility token” without its own blockchain, designed to unlock services within the Pudgy Penguins ecosystem.
Meme coins Go Mainstream But with Guardrails
The fund’s sponsors seem to be well aware of the concerns around speculative volatility and market manipulation. In the filing, CBOE addresses these issues directly:
“The geographically diverse and continuous nature of PENGU trading makes it difficult and prohibitively costly to manipulate the price of PENGU,” they note, “coordinated manipulation would require global price distortion across multiple platforms, not just isolated exchange activity.”
This is a growing trend among ETF sponsors to meet the SEC’s long-standing concerns around market integrity for crypto-linked funds. Manipulation risks have previously killed several high-profile Bitcoin spot ETF proposals making the inclusion of a meme coin especially bold.
Inside the ETF’s Mechanics: NAVs, IIVs, and Transparency
According to the filing, the Net Asset Value (NAV) of the fund will be calculated daily at 4:00 p.m. ET, while Intraday Indicative Values (IIVs) will be disseminated every 15 seconds during normal trading hours. These data points, along with daily and historical NAVs, creation/redemption activity, and premium/discount information, will be made available to the public through the ETF’s website.
The trust will not engage in proof-of-stake validation, and any rights stemming from forks, airdrops, or derivative chain activity will be disclaimed entirely. Investors will not receive distributions in crypto; the ETF will be strictly cash-based for both issuance and redemptions.
This structure is designed to fit within current SEC tolerance zones while minimizing complexities that could delay approval.
Canary PENGU ETF
Conclusion: The S-1 Filing and the Long SEC Road
While the Form 19b-4 filing starts the clock, Canary Capital Group LLC will still need to file a Form S-1; the actual registration statement with the SEC that includes risk, operations and fund structure disclosures. That can take months and may involve multiple comment rounds from regulators.
Given the novelty of this product, a utility token not backed by its own blockchain, NFTs and no direct commodity classification, it’s hard to know how the SEC will react. If approved, the Canary PENGU ETF could change what is considered an exchange-traded product in the US.
Summary
CBOE has filed with the SEC to list the Canary PENGU ETF, a first-of-its-kind fund combining the Solana-based PENGU meme coin and Ethereum’s Pudgy Penguin NFTs. Sponsored by Canary Capital Group, the ETF will be a Delaware statutory trust and hold 80–95% in PENGU, with the rest in NFTs. The trust is not a commodity pool and does not participate in staking or airdrops.
FAQs
What is the Canary PENGU ETF?
A proposed ETF that holds PENGU memecoin and Pudgy Penguin NFTs, so investors can own internet-native assets in a regulated way.
Will the ETF distribute NFTs or PENGU tokens to investors?
No. Cash only. Shares are issued and redeemed in cash, no digital assets will be distributed to investors.
Is the SEC going to approve this ETF?
Uncertain. The filing meets structural requirements but the inclusion of memecoins and NFTs may raise questions.
What’s unique about this ETF?
First ETF to combine a utility token and NFTs in one product, breaking from traditional crypto ETFs tied to major tokens or futures.
Glossary
ETF (Exchange-Traded Fund): a type of investment fund traded on stock exchanges, holding assets like stocks, commodities or crypto.
Form 19b-4: a document exchanges file with the SEC when proposing rule changes, including new ETF listings.
Form S-1: a registration statement filed with the SEC before offering new securities.
PENGU: Solana-based utility token introduced by Pudgy Penguins in December 2024; giving digital access to its ecosystem.
Pudgy Penguins: popular NFT collection on Ethereum known for its cartoon penguin avatars and strong online community.
NAV (Net Asset Value): value per share of an ETF; calculated daily based on total assets minus liabilities.
Sources
Eric Balchunas on X
Pudgy Penguins
CBOE
Read More: BREAKING: CBOE Submits Canary PENGU ETF Filing to SEC, Merging Meme Coins with NFTs">BREAKING: CBOE Submits Canary PENGU ETF Filing to SEC, Merging Meme Coins with NFTs
