Canary Capital files for U.S. spot PEPE ETF

Canary Capital filed with the U.S. Securities and Exchange Commission for permission to list a spot PEPE exchange-traded fund that would hold PEPE tokens directly and trade on U.S. exchanges.

The filing requests authorization for an exchange-traded product that would acquire and hold spot PEPE tokens as its primary assets. The proposed fund would let investors buy and sell shares through brokerages without managing digital wallets or private keys.

The application starts the SEC’s formal review. The agency will assess the filing for completeness and compliance with federal securities laws, may solicit public comment, and could approve the fund, request amendments, or disapprove the application. The review timeline can span several months depending on the complexity of the product and regulatory questions.

Canary Capital’s filing includes disclosures about custody, valuation and operational arrangements. It describes custodial arrangements for holding PEPE tokens, a method for calculating the fund’s daily net asset value using underlying PEPE market prices, and controls intended to guard against market manipulation and custody failures.

The submission addresses liquidity and secondary market trading in PEPE, which the SEC typically examines to determine whether the market supports fair and orderly ETF trading. The SEC approved spot bitcoin ETFs in 2023, a precedent it may consider while evaluating other digital assets on a case-by-case basis.

PEPE is a meme-based cryptocurrency that has experienced rapid price swings and speculative trading since its launch. Those characteristics are likely to be part of the SEC’s assessment of any retail-facing product tied to the token.

If the SEC approves the application, the fund would need to coordinate with an exchange to list shares and with service providers such as custodians and administrators to meet regulatory requirements for transparency, custody and valuation. Investors and issuers will watch the SEC’s determination for guidance on spot ETFs linked to smaller or more speculative cryptocurrencies.