21Shares has filed an S-1 with the SEC to launch an ETF tracking the price of SEI, using an index from CF Benchmarks and custody by Coinbase Custody, kicking off the race for the SEI ETF in the United States.
Canary Capital previously filed for a SEI ETF with direct exposure to staked SEI. Meanwhile, the SEC is reported to be considering a simplified listing mechanism that could automatically approve after 75 days if there are no objections.
MAIN CONTENT
21Shares submitted S-1 for the SEI ETF: using CF Benchmarks to track price, Coinbase Custody for custody, considering staking if no legal/tax risks arise.
Canary Capital has taken the lead with the SEI staking exposure ETF; the ETF is seen as a bridge to traditional markets.
The SEC is reportedly testing a 75-day shortened approval mechanism; SEI is trading around $0.30, ranked 74th on CoinGecko.
How did 21Shares file for the SEI ETF?
21Shares submitted an S-1 registration to the SEC proposing an ETF tracking the price of SEI through CF Benchmarks, aggregating data from multiple cryptocurrency exchanges.
According to the filing, Coinbase Custody Trust Company will serve as the custodian for SEI. 21Shares is also open to the possibility of staking SEI to generate additional profits, but is still evaluating to ensure no unnecessary legal, managerial, or tax risks arise. Utilizing CF Benchmarks helps standardize data sources from multiple exchanges, reducing pricing discrepancies over time.
“The ETF filing is a significant milestone in our vision to expand access to listed trading on the SEI Network.”
– 21Shares US, X post, Thursday, source: https://x.com/21shares_us/status/1961174908597391718
What role does CF Benchmarks play in the ETF structure?
CF Benchmarks provides price indexes for funds tracking SEI, based on aggregated data from multiple exchanges.
This approach aims to ensure index transparency, minimizing the impact of individual exchange volatility. According to the S-1 filing, multi-source data enhances the representation of spot market prices, aligning with regulatory expectations for digital asset ETF products.
What role does Coinbase Custody play in the proposal?
Coinbase Custody Trust Company has been appointed as the custodian for 21Shares' SEI ETF.
Institutional custody helps segregate assets, control private keys, and manage operational risks. 21Shares is also considering staking SEI to increase yield while remaining cautious of legal, managerial, and tax risks. The final decision will depend on compliance assessments to ensure investor interests are not harmed.
What is SEI?
SEI is the native token of the Sei Network, a Layer-1 blockchain launched in August 2023.
Sei Network specializes in trading infrastructure for decentralized exchanges and marketplaces. SEI is used to pay gas fees and participate in on-chain governance. The focus on trading infrastructure helps Sei optimize throughput, latency, and order matching experience, serving as a foundation for decentralized trading applications.
What is the utility of the SEI token in the Sei ecosystem?
SEI is used as gas fees and for governance voting on the Sei network.
Gas fees ensure the sustainable operation of the network, while governance rights allow the community to vote on upgrade proposals, system parameters, and development directions. This model encourages holders to align long-term interests with the growth of the Sei Network.
What is the current price and market position of SEI?
SEI is trading around $0.30, up 4.2% in the last 24 hours; CoinGecko ranks SEI 74th by market cap.
Short-term volatility reflects sentiment ahead of listing product moves like ETFs. A rank of 74 indicates that SEI has achieved significant scale among mid-tier digital assets, yet still has room for growth compared to assets with approved spot ETFs in the U.S. like Bitcoin and Ethereum.
Why is the race for the SEI ETF heating up?
In the United States, apart from Bitcoin and Ethereum, there are currently no other approved spot ETFs; this opens pioneering opportunities for institutions with new assets like SEI.
ETFs help traditional investors access SEI through listed channels without needing to self-manage wallets and custody. The ability to incorporate staking into the structure is another key differentiator, but it closely depends on legal and tax assessments. The fact that multiple organizations are filing reflects the expectation of opening new demand from the capital market.
What notable aspects did Canary Capital's previous SEI ETF filing have?
Canary Capital filed for the SEI ETF in April, proposing 'direct exposure to staked SEI' and 'passive income from staking rewards,' according to Sei Network's statement on April 30.
Positioning on staked SEI aims at optimizing yield, but comes with high compliance demands. The perspective from the Sei Development Foundation emphasizes the role of ETFs as a bridge connecting traditional markets with digital assets, potentially expanding the pool of both institutional and individual investors.
“ETFs are the gateway to widespread acceptance, providing a crucial bridge between cryptocurrency and traditional markets.”
– Justin Barlow, CEO of Sei Development Foundation, April 30, source: https://blog.sei.io/sei-ecosystem-continues-momentum-with-landmark-etf-filing-in-the-u-s/
What other products is 21Shares pursuing beyond SEI?
21Shares has an ARK 21Shares Bitcoin ETF tracking the price of Bitcoin and is filing for SUI, XRP, and Ondo (Ondo Finance's token).
A diverse portfolio demonstrates a multi-asset coverage strategy in the cryptocurrency ecosystem. With experience deploying Bitcoin ETFs, 21Shares has operational advantages, management dialogue, and a partner network, enhancing its ability to finalize new proposals like SEI.
How are other issuers racing for altcoin ETFs?
VanEck, Bitwise, and Grayscale have filed for Solana; other organizations are pursuing products linked to XRP, Cardano, and even Dogecoin.
The diversification of ETF proposals indicates that the market wants to introduce additional assets beyond Bitcoin and Ethereum into traditional listing channels. However, each asset has different legal, liquidity, and infrastructure profiles, so the regulatory assessment process may not be uniform.
How is the SEC considering the new ETF approval mechanism?
According to journalist Eleanor Terrett, the SEC is said to be studying a simplified listing structure, automatically approving after 75 days if there are no formal objections.
This mechanism, if implemented, could significantly reduce back-and-forth exchanges between fund managers and regulators, shortening the product launch timeline. However, this is still reported information and may change based on the SEC's practical implementation.
What are the differences between the two current SEI ETF proposals?
The most significant difference is in asset exposure: 21Shares tracks spot SEI and considers staking depending on risk, while Canary Capital emphasizes direct exposure to staked SEI and passive income from staking rewards.
This difference leads to implications for compliance, taxation, and operational structure. Any staking mechanism in the ETF will also need rigorous assessment for legal risks and disclosure obligations to investors.
Criteria 21Shares SEI ETF (proposal) Canary Capital SEI ETF (proposal) Asset exposure Tracking spot SEI price through CF Benchmarks Direct exposure to staked SEI Staking Possible consideration, but assessing legal/tax risks Aiming for passive income from staking rewards Custody Coinbase Custody Trust Company Not mentioned in Sei Network's April 30 statement Index provider CF Benchmarks Not mentioned in Sei Network's April 30 statement Approval status in the U.S. Pending review Pending review
Frequently Asked Questions
When might the SEI ETF be approved?
No official date yet. According to Eleanor Terrett, the SEC is said to be considering a 75-day automatic approval mechanism if there are no objections, but there is no guarantee of its application.
Is the 21Shares SEI ETF certain to implement staking?
No. 21Shares stated it is evaluating to ensure there are no unnecessary legal, managerial, or tax risks before deciding.
What is SEI used for in the Sei network?
SEI is used to pay gas fees and participate in on-chain governance for the Sei Network, a Layer-1 blockchain focused on trading infrastructure.
What spot ETFs are currently available in the United States?
As of the time of writing, only Bitcoin and Ethereum have approved spot ETFs in the United States.
What are the current price and market cap rankings of SEI?
SEI is around $0.30, up 4.2% in 24 hours; ranked 74th on CoinGecko.
Source: https://tintucbitcoin.com/21shares-nop-don-etf-sei-dau-canary/
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