SEC Delayed SUI ETF by Canary Capital Over Regulatory Concerns
Canary Capital’s proposed spot SUI ETF will not get the approval from the U.S. SEC, it got delayed in the latest announcement of SEC. Interest in crypto has increased since this move was made, since it brings more postponed applications for crypto ETFs. The fact that the decision isn’t ready yet indicates that U.S. regulators are very careful about digital assets, despite an increase in interest among investors.
What Is the SUI ETF and Why It Matters
Canary Capital is making efforts to introduce the first spot Exchange Traded Fund that will enable investors to own SUI, the native token of the fast and scalable blockchain. It would enable investors to get exposure to SUI without actually buying the crypto directly. This type of product is primarily attractive to institutional players who prefer regulated, traditional financial tools.
If approved, the SUI ETF would make it easier for regular investors to access the market through stock exchanges. It would also mark another step toward crypto becoming more accepted on Wall Street. After the announcement the price in the currency has decreased by 1.88% in the last 24 hours and trading volume has also reduced by 3.48%, currently trading at $3.20 as per the CoinMarketCap, the decrease in price is also impacted by the cetus protocol hack incident.
Source: CoinMarketCap
SEC’s New Leadership Taking Its Time
The delay comes under the new SEC Chairman, Paul Atkins, who recently took charge. Popular for his previous pro-market stance, he was expected to bring a fresh approach to crypto-related product proposals. However, the SEC under his leadership is still taking a slow and careful path.
The agency said it needs more time to review the filing due to concerns about market manipulation and investor protection. This is a common theme in recent months, especially after issues like bot abuse surfaced on major exchanges. Generally the maximum time duration for reviewing a proposal is 250 days and minimum is 45 days. Here the SEC is not giving green light to any of the ETFs within 45 days.
Canary’s Push and Growing ETF Portfolio
Canary Capital has been proactive in its pursuit of crypto ETFs. Over the past few months, they’ve filed proposals for Litecoin, Hedera, Tron, Solana, SEI, and even Pudgy Penguins. It marks a unique step, being the first-ever proposed ETF based on this token.
At the same time, 21Shares and Nasdaq have joined the race. They recently filed Form 19b-4 with the SEC to back their own SUI ETF. 21Shares, already a known name in crypto product filings, also filed Form S-1 earlier this month. This shows that more firms are lining up to offer exposure to SUI, despite regulatory delays.
Wave of Crypto ETF Delays
The delay of Canary’s SUI ETF is not happening in isolation. In May alone, the SEC postponed at least ten different crypto products decisions. These include proposals for tokens like Cardano, Solana, Dogecoin, XRP, Avalanche, and Litecoin, filed by big firms such as Grayscale, 21Shares, CoinShares, and Bitwise.
Each delay was based on the SEC asking for more legal and technical reviews. For example, Grayscale’s attempt to turn its Cardano and Avalanche trusts into spot Exchange Traded Funds was pushed back for further analysis.
Why Are All ETFs Being Delayed?
Despite growing interest, especially after JPMorgan started offering loans backed by BlackRock’s Bitcoin Exchange Traded Funds, regulators remain cautious. The Commission's prominent reasons are market manipulation, scarcity of appropriate protections, and the requirement for robust legal frameworks. Despite digital assets being noticed by important financial companies, the rules set by U.S. regulators are not clear enough.
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