21Shares Requests SEC Permission to Launch Its Inaugural SEI ETF

On August 28, crypto asset manager 21Shares filed an application with the U.S. Securities and Exchange Commission (SEC) to launch an SEI exchange-traded fund (ETF). The fund is designed to track the market price of SEI, the native token of the Sei Network, and bring regulated exposure of the asset to investors.

SEC Potential Delay Breeds Concern for ETF Issuers

According to its S-1 registration statement, the SEI ETF will be structured as a passive investment vehicle.

In simple terms, it will only follow SEI’s price. It will not use leverage, derivatives, or speculative trading methods.

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Instead, its value will be tied directly to the CF SEI-Dollar Reference Rate – New York Variant, a benchmark calculated by CF Benchmarks Ltd. The shares of the ETF will be priced daily based on this benchmark.

The filing also revealed another feature. 21Shares noted that it may consider staking a portion of SEI tokens within the fund. The aim is to allow the ETF to reflect potential rewards from staking activity.

This would mark a new milestone, as the SEC has not yet approved staking within any crypto ETFs. The uncertainty makes the decision crucial, not only for 21Shares but also for the wider market.

This move is not happening in isolation. Back in April, Canary Capital became the first U.S. firm to file for an SEI ETF. Its proposal promised direct exposure to staked SEI, including the possibility of earning passive income through staking rewards.

The SEC has yet to act on that application. This lingering silence now echoes in the concerns surrounding the new filing from 21Shares.

The history adds to the worry. Earlier this year, 21Shares also filed for a Polkadot ETF. The SEC initially planned to deliver a decision by June 24. Instead, it pushed the deadline to November 8, 2025.

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Many fear that the SEI ETF could face a similar drawn-out path. For issuers, the repeated delays raise doubts about when, or even if, the SEC will allow new crypto ETFs beyond Bitcoin and Ethereum to enter the market.

Coinbase Custody Will Act as SEI ETF Custodian

The filing also named Coinbase Custody Trust Company as the custodian of the proposed SEI ETF. All SEI tokens will be held under its care on behalf of investors.

21Shares stressed that assets will be stored in cold storage facilities, with private keys kept offline to reduce the risk of theft or loss.

This detail matters. Security has long been a sticking point for regulators when reviewing crypto ETFs. Custody arrangements provide reassurance to both investors and the SEC.

From a broader perspective, custody is more than storage. Analysts believe a trusted custodian could improve investor confidence and reduce one of the SEC’s main reservations.

If these safeguards prove reliable, it may open the door for other tokens to enter the ETF market through similar structures.

The context is also shifting. On August 1, the SEC and the Commodity Futures Trading Commission (CFTC) launched a joint initiative called “Crypto Sprint.”

The goal is to provide clearer guidance on digital assets, mitigate regulatory conflicts, and make the U.S. a stronger hub for crypto innovation.

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For years, the agencies disagreed on whether tokens were securities, commodities, or even payment assets. The lack of clarity caused investors to hesitate and pushed innovators to friendlier markets overseas.

Now, the mood is changing. With stronger coordination between regulators and a more pro-crypto administration under Donald Trump, industry observers believe the path may be smoother for both the Polkadot ETF and the SEI ETF.

If the SEC aligns its approach with market demands and gives a clear green light, more applications for crypto ETFs will likely follow.