The 21Shares exchange-traded fund (ETF) is S-1 registered with the U.S. Securities and Exchange Commission (SEC).
The relocation is a result of the company’s strategy to increase its crypto products. The SEI ETF will enable investors to be exposed to SEI, the native token of the Sei Network.
Key Features of the SEI ETF
The 21Shares SEI ETF is linked to the CF SEI-Dollar Reference Rate, a standard that consolidates SEI trades across various platforms. This will make the fund’s performance pegged to the price movements of SEI in USD. The ETF has been selected to have Coinbase Custody Trust Company as its custodian, which holds the fund’s assets.
Even though the possibility of staking SEI in case of reward is present, 21Shares has never substantiated this as part of the ETF strategy. All the staking would be transferred to third parties and would only be implemented if there are no legal or tax issues. The ETF is designed as a passive product, and it will not be used for leverage or speculative trading.
Custody and Trading Process
Regarding the trading process in the fund, the authorized participants may subscribe or redeem shares either through cash or in-kind transfers. Where cash subscriptions are involved, a third-party SEI Counterparty will convert the funds into SEI. SEI will be deposited with Coinbase Custody afterwards. In the case of in-kind subscriptions, participants will post SEI with the Trust, which will issue shares with the net value of the SEI.
The ETF will not directly carry out SEI transactions with the authorized parties. This also applies to the redemption process, where the participants will get the redemption in either SEI or its cash equivalent, depending on the CF SEI-Dollar Reference Rate.
SEI ETF Competition
The submission of 21Shares contributes to the increasing rivalry of SEI-based ETFs. In April, Canary Capital filed its own S-1 registration of an SEI ETF, which also contemplated staking as part of its offering. The growing popularity of SEI ETFs serves as an indication of the wider attempts to bridge the gap between crypto and traditional finance. Interestingly, ETFs provide an easy route by which institutional and retail investors can become exposed to digital assets.
Other leading asset managers have submitted crypto ETF filings, including VanEck, Bitwise, and Grayscale, targeting assets such as Solana, Cardano, and XRP. According to analysts, many of these ETFs have high approval probabilities, and they anticipate an increasing institutional interest in crypto products.
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