SEC Initiates Formal Review of Canary Funds’ SUI Spot ETF

The U.S. Securities and Exchange Commission (SEC) has officially commenced a formal review of Canary Funds’ proposed SUI Spot Exchange-Traded Fund (ETF), marking a pivotal progression toward the potential listing of a SUI investment product in the United States. This development underscores the accelerating integration of digital assets into established financial frameworks and signals an intensified regulatory focus on crypto-native investment vehicles.

• Canary Funds initially filed its SUI ETF proposal on March 17, 2025.
• The proposed rule change for the ETF was published in the Federal Register on April 25, 2025, initiating the public comment period.
• The SEC formally instituted proceedings to evaluate the proposal on July 22, 2025, following a review period extension on June 4, 2025.
• The agency is statutorily required to issue a final decision by approximately December 25, 2025.
• The ETF aims to track SUI’s performance by holding actual SUI tokens, benchmarked against the CoinDesk SUI USD CCIX 60-minute New York Rate.
• A core focus of the SEC’s review is ensuring the ETF’s compliance with Section 6(b)(5) of the Exchange Act, emphasizing fraud prevention and investor protection.

The Regulatory Journey for SUI

Canary Funds initiated this process by submitting its proposal on March 17, 2025, a move swiftly followed by Cboe BZX Exchange’s filing of a proposed rule change. This rule change, essential for listing and trading shares of the Canary SUI ETF, was officially published in the Federal Register on April 25, 2025. This publication formally opened the mandatory public comment period for the application, inviting input from interested parties.

Further escalating its scrutiny, the SEC formally instituted proceedings to assess the Cboe exchange’s proposed rule change on July 22, 2025. This decision came after the agency had already extended its review period on June 4, 2025, acting under the provisions of Section 19(b)(2) of the Securities Exchange Act. The SEC explicitly stated that these proceedings should not be interpreted as an indication of a pre-determined outcome, but rather as a necessary step for a more comprehensive and analytical phase of evaluation.

SEC’s Review Process and Investor Protection

As part of its thorough examination, the SEC has formally invited public commentary, specifically requesting written input regarding the Cboe BZX Exchange’s rationale for the ETF’s listing. Standard procedure for these proceedings typically involves a 21-day public comment window, subsequently followed by a 14-day rebuttal period, allowing for a structured dialogue between the agency and the public. A central tenet of this rigorous review is to ensure that the proposed ETF rigorously adheres to Section 6(b)(5) of the Exchange Act, a critical mandate focused on preventing fraudulent activities and robustly safeguarding investor interests. The agency is statutorily bound to render a final decision, whether approval or disapproval, within 240 calendar days from the Federal Register publication date, placing the anticipated deadline around December 25, 2025. The ETF itself is designed to mirror SUI’s performance by directly holding actual SUI tokens, with its valuation precisely tracking the CoinDesk SUI USD CCIX 60-minute New York Rate.

Market Dynamics and Broader Digital Asset Strategy

Despite these significant regulatory movements, the market price of the SUI token has demonstrated relative stability, largely consolidating around the $3.87 mark. While CoinGecko data indicates a minor 0.4% decline over the most recent 24-hour period, SUI has concurrently registered an impressive 53% gain over the past 30 days, reflecting underlying positive sentiment. This SUI application is not an isolated effort but forms an integral part of Canary Capital’s expansive strategy in the burgeoning crypto ETF sector. The firm has concurrently filed for a diverse range of other digital asset ETFs, including those tracking Injective, Litecoin, Hedera, TRON, XRP, and PENGU. This broad portfolio of applications clearly underscores a growing and sustained institutional appetite for diversified and regulated investment products within the dynamic digital asset landscape.