Crypto asset manager 21Shares has filed an application with the U.S. Securities and Exchange Commission to launch an exchange-traded fund tied to the price of SEI. The proposal, submitted through an S-1 registration statement, would use price data from CF Benchmarks, which aggregates information across multiple crypto exchanges. If approved, the fund would mark the first SEI-linked ETF available to U.S. investors. What is SEI? SEI is the native token of the Sei blockchain, a layer-1 network launched in August 2023. The platform focuses on decentralized exchange trading infrastructure and marketplace activity. The token itself can be used to pay transaction fees and participate in governance decisions. As of now, SEI trades around $0.30, placing it in the mid-70s by market capitalization rankings. Custody and Staking Options Under the plan, Coinbase Custody Trust Company would serve as the custodian for SEI held by the ETF. In its filing, 21Shares also raised the possibility of staking SEI to generate extra income for the fund. However, the firm emphasized it is still assessing whether staking could expose investors to legal or tax complications. Competing Applications The move comes just months after Canary Capital filed for its own SEI ETF in April. That proposal would give both institutional and retail investors exposure to staked SEI, with returns boosted by staking rewards. Justin Barlow, executive director of the Sei Development Foundation, welcomed the idea of ETFs tied to the project. He said they act as “a gateway for broader adoption, providing a vital bridge between crypto and mainstream markets.” Broader ETF Landscape Currently, the only spot crypto ETFs approved in the U.S. track Bitcoin and Ethereum. However, there is a growing wave of applications for products tied to other blockchains. 21Shares itself already operates the ARK 21Shares Bitcoin ETF and has applied for funds covering assets such as SUI, XRP, and Ondo Finance. Other major issuers including VanEck, Grayscale, and Bitwise are pursuing ETFs linked to Solana, Cardano, and even memecoins like Dogecoin. Regulatory Developments In an effort to streamline the process, the SEC is reportedly considering a system that would automatically approve certain ETFs after 75 days unless the agency raises formal objections. This would reduce the lengthy back-and-forth that has often slowed crypto ETF approvals in the past. 21Shares, for its part, described its SEI filing as a “key milestone in our vision to expand exchange-traded access to the SEI Network.” Outlook With two filings now on the table, the race is on to see which firm, if any, will bring the first SEI ETF to U.S. markets. While regulatory hurdles remain, the growing number of applications suggests rising demand for diversified crypto investment products that go beyond Bitcoin and Ethereum. For SEI, approval of such a fund could mark a major step in its journey from a newly launched blockchain to a mainstream investment asset.
