Canary Capital Files for Staked SEI ETF Offering Direct Exposure and Staking Rewards

In a significant move for crypto investors, Canary Capital has officially filed a Form S-1 registration with the U.S. Securities and Exchange Commission (SEC), proposing the launch of a new exchange-traded fund (ETF) named the Canary Staked SEI ETF. This innovative fund is designed to offer investors direct exposure to the SEI token, the native digital asset of the Sei Network, while also generating passive income through staking rewards.

What Makes the Canary Staked SEI ETF Stand Out? Unlike traditional crypto ETFs that rely on futures or synthetic products, this ETF aims to track the real-time spot market value of SEI. The pricing will be benchmarked by CoinDesk Indices, Inc., which will serve as the fund’s official price data provider. The Net Asset Value (NAV) of the ETF will be calculated daily at 4:00 PM ET, using an aggregated average of SEI prices from leading digital asset exchanges.

Importantly, this fund does not use derivatives. Instead, it will physically hold SEI tokens in a secure custody arrangement, offering a more transparent and direct form of exposure.

Custody Handled by BitGo and Coinbase Custody

To ensure secure handling of the underlying SEI tokens, Canary Capital has designated BitGo Trust Company, Inc., and Coinbase Custody Trust Company, LLC as official custodians. While these custodians are not FDIC-insured, both firms maintain comprehensive private insurance policies to protect digital assets under management.

This custodial structure removes the burden of managing private keys and complex blockchain wallets for investors. It enables traditional investors to gain exposure to SEI using standard brokerage accounts, while the custodians handle the behind-the-scenes crypto storage.

Integrated Staking for Added Yield

One of the ETF’s most appealing features is its built-in staking component, designed to enhance returns by participating in the Sei Network’s proof-of-stake (PoS) consensus system. Through this mechanism, the fund will contribute to network validation and, in return, earn staking rewards in SEI.

All staking operations will be conducted under strict regulatory oversight and managed by approved validators. The fund’s custodians will supervise the process to ensure the safety and compliance of all staking-related activities.

This strategy not only gives investors exposure to the price appreciation of SEI but also unlocks passive income potential through the staking rewards, making it a dual-benefit offering in the crypto ETF space.

A Strategic Move in Canary Capital’s Expanding Crypto Portfolio

The Canary Staked SEI ETF reflects the firm’s growing interest in staking-enabled ETFs. This application follows a previous filing for a similar ETF focused on TRX (Tron), underscoring Canary Capital’s long-term commitment to bringing blockchain-based yield opportunities to mainstream investors.

The fund is specifically designed to lower the barrier to entry for those interested in digital assets, making it easier to invest in SEI without navigating the complexities of blockchain technology. If approved, it would mark a major step forward in combining traditional finance (TradFi) access with DeFi rewards.

What to Expect Next

Canary Capital’s proposal represents a bold step in the evolution of crypto investment vehicles. By combining direct token ownership with staking income, the Canary Staked SEI ETF could offer a unique blend of growth and yield for investors. While the SEC review is still pending, the fund signals a growing trend toward regulated, yield-generating crypto ETFs, a development that could further legitimize digital assets in traditional markets. 

Stay tuned for updates as Canary Capital awaits regulatory approval. If approved, the Canary Staked SEI ETF could become a game-changer for crypto-curious investors looking to benefit from both price exposure and staking rewards, all within the comfort of their brokerage account.