SEC Advances Canary Capital’s SUI ETF Amid Regulatory Scrutiny

- Formal review opened for Canary’s SUI Spot ETF. - Public comment period underway amid regulatory hurdles. On July 23, 2025, the SEC announced it has formally begun reviewing Canary Capital’s proposed SUI Spot ETF. As the first product of its kind for the U.S. market, its approval would mark a major milestone for cryptocurrency ETFs and make the SUI token the first to be directly held in a U.S.-listed fund. In a statement on July 22, the SEC confirmed that Canary Capital’s application, initially submitted in March, has advanced to the "institution of proceedings" phase. This move follows an earlier delay on June 4, when the SEC extended the review timeline. The regulator's proceedings will now focus on compliance with Section 6(b)(5) of the Securities Exchange Act of 1934, a key criterion requiring measures to prevent fraud and manipulation and to protect investors. The SEC has opened a 21-day public comment window for stakeholders to submit written feedback, which will be followed by a 14-day period for rebuttals. Under SEC policy, the agency must deliver its final decision within 240 days of the original filing. Canary Capital is one of several asset managers seeking approval for SUI-based products, as competitors like 21Shares have also filed applications for a spot SUI ETF. SUI is also a component of the Bitwise Crypto Index ETF, a fund the SEC has approved but has not yet started operating. Meanwhile, Canary Capital, led by former Valkyrie CIO Steven McClurg, has also filed for multiple other crypto ETFs covering Litecoin, XRP, Hedera, and Injective (INJ). Although the announcement did not significantly affect SUI's price, which remained in a narrow trading range, institutional interest in the token appears robust. For example, futures open interest reached $1.2 billion, positioning SUI as the sixth-largest cryptocurrency by this metric. As of 15:09 UTC on July 23, Sui (SUI) traded at $3.779, while its 24-hour trading volume dipped by 3.394%, according to market data.