Canary Capital Shakes Up Crypto Markets—Files First-Ever Spot Sei ETF with Staking Twist

Wall Street’s latest crypto play isn’t just dipping toes—it’s cannonballing into DeFi waters. Canary Capital just dropped the ultimate alpha: a spot Sei ETF filing that includes yield-generating staking rewards. Who needs boring old savings accounts when you can let the SEC babysit your crypto yield?

The move marks a seismic shift—regulators are finally being forced to grapple with proof-of-stake mechanics. Either they adapt or risk looking technologically illiterate (again). Meanwhile, TradFi brokers are scrambling to explain staking yields to clients who still think ’APY’ is a typo.

This isn’t your grandfather’s Bitcoin ETF. By baking staking directly into the structure, Canary’s throwing down the gauntlet—either the SEC evolves its 20th-century framework, or gets left watching from the sidelines as crypto eats finance. Place your bets now.

Canary Capital’s Spot Sei ETF to Include Staking for Added Investor Yield

The fund also plans to stake a portion of its SEI holdings through one or more infrastructure providers, potentially offering additional yield to shareholders.

The ETF would handle share creation and redemption in cash, consistent with the structure used by recently approved spot Bitcoin and Ethereum ETFs in the U.S.

Sei is an Ethereum Virtual Machine (EVM)-compatible Layer 1 blockchain built with the Cosmos SDK.

It features rapid execution and supports Inter-Blockchain Communication (IBC), enabling cross-chain interoperability.

The network aims to deliver the programmability of Ethereum with the high-speed performance of Solana.

The filing adds to a growing list of crypto ETF proposals from Canary Capital, which has recently submitted applications tied to assets such as Sui, Hedera, Litecoin, Pengu, and most notably, TRON — the latter also featuring a staking component.

The move comes as the industry experiences increased Optimism under the more crypto-friendly Trump administration.

Since January, the SEC has dropped several lawsuits against crypto firms and hosted public roundtables. Former Commissioner Paul Atkins now chairs the SEC, replacing Gary Gensler.

Analysts Increase Odds of Approval for Crypto ETFs

Meanwhile, Bloomberg ETF analysts Eric Balchunas and James Seyffart have placed high odds on the approval of several spot crypto ETFs.

Would love to hear directly from Atkins, but all good chance of happening. Here’s our latest odds of approval for all the dif spot ETFs via @JSeyff https://t.co/nLhYJJmO9U pic.twitter.com/4AcJVwhics

According to their latest update, Solana and Litecoin lead the pack with a 90% approval likelihood, followed by XRP (85%), Dogecoin and Hedera (80%), and Cardano, Avalanche, and Polkadot (75%).

While spot Bitcoin and Ethereum ETFs have already received approval, the SEC has yet to greenlight any ETF product with staking functionality — something already seen in markets like Canada and Europe.

In a parallel development, the Crypto Council for Innovation, backed by major firms including a16zcrypto, Consensys, and Kraken, has called on the SEC for regulatory clarity on staking.

In a letter to Commissioner Hester Peirce, the coalition argued that staking is a technical process, not a securities transaction, and urged the agency to support its responsible inclusion in ETFs.

Last week, the SEC postponed its decision on several proposed spot cryptocurrency ETFs.

The applications include ETFs tracking the spot prices of Polkadot (DOT) and Hedera (HBAR), as well as a dual crypto fund focused on Bitcoin (BTC) and Ethereum (ETH).

The SEC now has until June 11 to decide on Nasdaq’s filings for the Canary HBAR ETF and the conversion of Grayscale’s Polkadot Trust into an ETF.