Canary Capital Registers Staked Sei ETF Amid Regulatory Shifts

Canary Capital has recently registered a statutory trust for a staked Sei (SEI) ETF, marking a significant advancement in the development of innovative crypto investment products. This move comes at a time when the regulatory landscape for cryptocurrencies is evolving, and the potential for passive income through staking rewards is attracting a broader range of investors to the market.

The registration of the trust on April 23 under file number 10171975 indicates a growing interest in crypto ETFs, particularly in light of anticipated regulatory developments from the SEC. This development follows Canary Capital's recent filing for a staked ETF based on Tron (TRX) on April 18, and the firm is also pursuing ETF registrations for several other altcoins, including Pudgy Penguins (PENGU), Axelar (AXL), Solana (SOL), XRP (XRP), and more. This signals Canary Capital's broader push into crypto-based investment products.

A potential Canary Staked SEI ETF would track the price of SEI like conventional ETFs, but with the added benefit of staking rewards. This structure could provide investors with passive income alongside market exposure. Notably, this feature has yet to be approved for any US spot crypto ETF. The SEC has historically been cautious about staking in ETFs, as evidenced by the withdrawal of several staking ETF proposals last year. However, with a more pro-crypto administration in place, issuers are now making another attempt. Franklin Templeton submitted an S-1 in February to launch an SOL ETF with staking provisions, and the NYSE has also filed a request to the SEC on behalf of Grayscale seeking approval to add staking to its spot Ethereum (ETH) ETFs.

Despite these efforts, the SEC's reluctance to greenlight such products suggests that Canary Capital’s SEI ETF may face a prolonged review process. The regulator extended the decision deadline from April 17 to July 2025, indicating a cautious approach. Nevertheless, the registration comes amid growing institutional interest in Sei, highlighted by World Liberty Financial’s (WLFI) accumulation of 5.9 million SEI worth around $1.1 million, fueling optimism about its potential. A user on the social platform X noted, “SEI isn’t just making promises—it’s taking action, and institutional players are beginning to pay attention.”

The Sei Foundation has also been working to strengthen its presence in the US by launching the Sei Development Foundation on April 2. This initiative seeks to promote the growth and visibility of the Sei protocol, providing critical support to developers and builders within its ecosystem. Despite these developments, the SEI token has faced market challenges, depreciating by 70.3% over the past year and dipping by 3.2% over the past day. At the time of writing, SEI was trading at $0.19. In line with its price struggles, Sei’s Total Value Locked (TVL) has also experienced a decline recently, dropping by 8.3% after hitting an all-time high (ATH) last week. At the time of writing, the TVL was at $382 million.

Canary Capital’s motion toward launching a staked Sei ETF illustrates not only innovation in the crypto space but also the potential for passive income opportunities. While facing numerous hurdles, the projected SEC approval process remains critical to the product’s future viability. Stakeholders in the crypto industry will be observing these developments closely, especially given the broader market dynamics affecting SEI and other cryptocurrencies.