21Shares Files S-1 for SEI ETF Targeting Token Tracking and Staking Rewards

TLDR

• 21Shares Files for First-Ever SEI ETF With Potential Staking Rewards

• New Sei ETF Aims to Track SEI Token Price and Offer Staking Yields

• SEI ETF: Layer 1 Blockchain Exposure With Cash or In-Kind Redemptions

• 21Shares’ Proposed SEI ETF Targets Token Price, Benchmark, and Custody

• Crypto ETF Evolution: 21Shares Adds Staking Option to SEI Token Fund

21Shares has filed an S-1 registration statement with the U.S. Securities and Exchange Commission(SEC) for the Sei ETF. The proposed exchange-traded fund seeks to track the price of SEI, the native token of the Sei Network. It also aims to earn staking rewards where legally permissible, adding a unique feature among crypto-based ETFs.

SEI ETF to Track Layer 1 Blockchain Token Performance

The Sei ETF intends to offer exposure to SEI, a Layer 1 proof-of-stake blockchain token. The Trust will passively track SEI’s price without using leverage, derivatives, or speculative trading strategies. Its performance will reflect the CF SEI-Dollar Reference Rate, adjusted for expenses and any staking rewards.

The Pricing Benchmark, maintained by CF Benchmarks Ltd, aggregates SEI trade data from multiple exchanges. The Trust values its shares daily based on this benchmark and Coinbase Custody will securely hold all SEI on behalf of the Trust.

The Trust may stake SEI to generate additional returns if the Sponsor determines it poses no legal or tax risks. However, the Sponsor has not yet approved staking under current conditions. The fund may later consider liquid staking tokens if deemed permissible.

Subscription and Redemption in Cash or SEI

Authorized Participants can subscribe or redeem shares of the Sei ETF either in cash or in-kind. In cash transactions, a third-party SEI Counterparty will convert U.S. dollars into SEI and deposit them with the Custodian. The Trust does not directly engage with Authorized Participants for SEI transactions.

For in-kind transactions, Authorized Participants deliver SEI directly to the Trust. In return, the Transfer Agent issues shares based on the SEI value minus any fees or liabilities. Redemptions return SEI or its equivalent cash value based on the benchmark price.

All SEI used in these processes is handled by designated third-party counterparties. These entities must meet standards of financial strength, regulatory oversight and a reliable settlement record. The Sponsor performs due diligence in selecting eligible counterparties for such tasks.

Seed Funding and Planned Market Launch

The Sponsor has already contributed seed capital by purchasing two shares at $50.00 each. This initial investment will support the launch process of the Sei ETF. An affiliate of the Sponsor plans to acquire additional Initial Seed Creation Baskets after registration approval.

These seed shares may be sold or redeemed following the listing, and the proceeds will be used to purchase SEI. The Trust expects to list the shares under a yet-to-be-confirmed ticker symbol. Shareholders will buy and sell shares on the secondary market through brokers.

While the SEI ETF is not subject to oversight under the Investment Company Act or the CFTC, it will operate under SEC regulations. Unless extended, the offering will remain open for up to three years. Shareholders will bear typical brokerage fees during trading.

 

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