Canary Capital has submitted documentation to the SEC through the Cboe BZX Exchange for an exchange-traded fund (ETF) tracking SUI, a cryptocurrency from a blockchain created in May 2023 by former Facebook engineers. The blockchain employs a dual-layer consensus mechanism known as Narwhal and Bullshark. SUI is currently the 21st largest cryptocurrency in the market with a market capitalization of around $6.7 billion and a fully diluted market cap exceeding $22.5 billion.
The proposed ETF would be the first to follow SUI's performance and may involve staking parts of its holdings through trusted providers to potentially earn staking rewards. Canary Capital, headquartered in Nashville, filed its initial registration statement with the SEC in March and has since submitted the proposal. Cboe has included protective measures in its filing to prevent fraud and manipulation, similar to safeguards applied to Bitcoin and Ethereum ETFs.
SUI is gaining popularity in decentralized finance (DeFi), with various projects launching on its platform. For instance, DeepBook is introducing its DEEP token on Oct. 14, offering a central limit order book for DeFi. Moreover, SatLayer, a Bitcoin restaking platform, announced its integration with the SUI network in December to enable Bitcoin to be utilized in DeFi applications on SUI's network, potentially expanding the DeFi ecosystem.
Despite its growth, SUI has faced challenges, including addressing insider trading allegations and experiencing a temporary network outage in November due to a bug. Canary Capital's initiative to establish a SUI ETF is part of a broader strategy to introduce multiple crypto ETFs targeting assets like Litecoin, Solana, XRP, and Hedera. Their Litecoin ETF has already been listed on the Depository Trust and Clearing Corporation under the ticker LTCC, indicating readiness for launch.
This development aligns with the collaboration between World Liberty Financial (WLFI) and the Sui blockchain. WLFI, a crypto project endorsed by President Trump, is cooperating with Sui to create new products and integrate SUI-based assets into its Macro Strategy fund. The SEC is currently reviewing several ETF proposals linked to crypto assets following the approval of Bitcoin and Ethereum ETFs.