21Shares has submitted an S-1 registration statement with the SEC for an SEI exchange-traded fund (ETF), in an effort to broaden its crypto product lineup. Per the exchange, the fund, 21Shares SEI ETF, will offer investors exposure to SEI, the native token of the Sei Network.
The 21Shares SEI ETF, once live, will track the CF SEI-Dollar Reference Rate in USD. Moreover, the fund could potentially stake some of its SEI to generate rewards, but 21Shares has not confirmed if this will be done. The exchange commented on their filing on X, describing it as a “key milestone in our vision to expand exchange-traded access to the SEI Network.”
Coinbase Custody Trust Company will hold custody of investors’ assets for the 21Shares ETF
Sei Network is built as a Layer 1 blockchain and focuses on high-performance trading and exchange-based apps. SEI, its native token, is used for fees, governance, and staking. According to the SEC, an SEI ETF is structured as a passive product, intended only to mirror SEI’s price movements. It will not employ leverage, derivatives, or speculative trading.
On August 28, 21Shares filed an S-1 registration statement with the SEC for its SEI ETF. The fund’s performance will be based on the CF SEI-Dollar Reference Rate, a benchmark managed by CF Benchmarks Ltd. that aggregates SEI trades from multiple venues. This measure values shares daily, with Coinbase Custody managing the fund’s SEI holdings.
Staking SEI to generate extra yield remains an option for the Trust, but only if the Sponsor determines there are no legal or tax issues. The Sponsor has yet to authorize staking, though liquid staking tokens may be considered later if allowed. Any staking, however, would be outsourced to third-party providers.
Shares of the Sei ETF may be subscribed to or redeemed by Authorized Participants using cash or in-kind transfers. When cash is used, a third-party SEI Counterparty converts the funds into SEI. It deposits them with the Custodian, since the Trust does not handle SEI dealings directly with Authorized Participants. For in-kind subscriptions, Authorized Participants deposit SEI with the Trust, which then issues shares reflecting the net value of that SEI. Upon redemption, they receive either SEI or the corresponding cash amount based on the benchmark rate.
Nonetheless, the company will be looking for a timely SEC decision, though the regulator has a history of delays, including its recent postponement of the 21Shares Polkadot ETF. Coinbase Custody Trust Company will be the custodian for the ETF. The firm also provided custody services for 21Shares’ ONDO tokens when that ETF was filed. According to the exchange’s filing, all assets will be in cold storage, while private keys will remain offline to prevent theft or misplacement.
Canary Capital filed its SEI ETF application in April
With the ETF filing, 21Shares joins the growing SEI ETF competition, first sparked by Canary Capital’s S-1 and later by Cboe’s 19b-4 for a staked version. In April, Canary Capital applied for its SEI ETF, which, at the time, claimed it would provide both institutional and retail investors with exposure to staked SEI and potential staking rewards.
Following Canary Capital’s filing, Justin Barlow, the executive director of the Sei Development Foundation, even said ETFs were an on-ramp to broader acceptance, an instrument that bridged crypto with mainstream finance.
Multiple other exchanges have submitted altcoin ETF applications for the US regulator to review. VanEck, Bitwise, and Grayscale have filed with the SEC for Solana ETFs, as other asset managers explore offerings tied to XRP, Cardano, Dogecoin, HBAR, and Litecoin. Analysts at Bloomberg put the approval odds for many of these ETFs at above 90%.
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Source: https://www.cryptopolitan.com/21shares-files-with-sec-for-sei-etf/
