21Shares seeks SEC nod for spot SUI ETF

- SEC officially acknowledges 21Shares' SUI spot ETF application - If approved, the first spot ETF on the Sui blockchain [Unblock Media] On June 5, 2025 (UTC), the U.S. Securities and Exchange Commission (SEC) officially acknowledged the SUI spot ETF application submitted by 21Shares, indicating the possibility of expanding regulated cryptocurrency investment products beyond Bitcoin and Ethereum. If this product is approved, it would become the first spot ETF linked to the Sui blockchain, a Layer 1 protocol known for its parallel execution and object-centric model. This reflects the interest of institutions in expanding access to alternative Layer 1 assets through traditional market infrastructure. Unlike futures-based ETFs, spot ETFs are backed directly by the underlying asset, not deriving value from derivatives contracts. This is crucial for cryptocurrency investors, as futures ETFs have historically moved differently from actual market prices, hindering investors from fully capturing gains during bull markets. Market analysts at BlockBridge Capital commented, "The SUI spot ETF could eliminate these inefficiencies and open the door for traditional investors to directly invest in SUI." The cryptocurrency community has long pointed to the absence of spot ETFs as an obstacle to greater acceptance. Spot products enable institutions to bring in capital with clearer regulation and risk management, potentially improving overall market depth and price stability. Acknowledgment by the SEC does not guarantee approval, but it is an important first step in the regulatory process. This acknowledgment comes several months after the approval of several Bitcoin spot ETFs, which brought in billions of dollars in net inflows. Experts believe this move could influence regulatory agencies in other jurisdictions. Emily Zhao, an ETF strategist at Parallax Advisors, noted, "After the approval of the U.S. Bitcoin spot ETF, Hong Kong, Canada, and Dubai accelerated their own cryptocurrency ETF frameworks. The approval of SUI would also send another global signal." Beyond its regulatory implications, the potential for a spot SUI ETF could draw institutional attention to the Sui ecosystem. If approved, pension funds, endowments, and asset managers could gain exposure to an alternative blockchain network without the worries of custody arrangements. According to data from CryptoCompare, daily trading volumes of U.S.-listed cryptocurrency ETFs increased by 38% following Bitcoin ETF approvals. Similar dynamics could occur, albeit to a lesser extent, with SUI. The SEC's acknowledgment of 21Shares' SUI spot ETF application marks another significant milestone in the gradual integration of cryptocurrencies into traditional finance. Whether or not the application receives full approval, it reaffirms the shift in regulatory stance towards accommodating a broader range of digital asset products. As spot ETF applications begin to cover assets beyond Bitcoin and Ethereum, the coming months will define how Layer 1 ecosystems are priced, regulated, and adopted by institutions.