Canary Capital’s Bold Move: XRP and Solana ETFs Eye SEC Approval Amid Shutdown

The race to bring spot crypto Exchange-Traded Funds (ETFs) to the U.S. market is not slowing down. Despite the regulatory friction caused by an impending U.S. federal government shutdown, Canary Capital has pressed forward, filing critical amendments to its spot XRP and Solana ETF registration statements. This assertive move signals a high level of confidence from the asset manager and reflects the growing institutional demand to integrate major altcoins into traditional investment vehicles.

The recent amendments submitted for the Canary XRP ETF and the Canary Marinade SOL ETF (which incorporates staking rewards) are pivotal. They address key terms the Securities and Exchange Commission (SEC) typically scrutinizes, most notably the fund’s operational cost. By disclosing a fixed management fee (expense ratio) and adjusting other structural details, Canary Capital is attempting to finalize the regulatory paperwork necessary for a potential batch approval.

The Fee Wars Begin: Significance of the 0.50% Expense Ratio

The single most newsworthy detail in the latest filings from Canary Capital is the disclosure of a competitive 0.50% commission (expense ratio) for both its XRP and Solana funds. This move is a direct response to the ongoing “fee war” sparked by the approval of spot Bitcoin ETFs.

Understanding the Expense Ratio

The expense ratio is the annual fee charged by the fund sponsor to cover the costs of managing the ETF, including administration, custody, and marketing. It is deducted from the fund’s assets and directly impacts an investor’s long-term returns.

A Competitive Edge

• Against Competitors: While the 0.50% fee is higher than some zero-fee or significantly discounted offerings for other crypto assets (like Bitwise’s highly aggressive 0.20% fee for a competing Solana staking ETF), it represents a significant reduction from Canary Capital’s previously designated 0.95% sponsor fee for its HBAR and Litecoin proposals. The 0.50% figure stakes a claim as a mid-tier, competitive offering in a new asset class known for higher operational costs due to the complexity of crypto custody and security.
• The Staking Component: For the Canary Marinade SOL ETF, the 0.50% fee is particularly interesting as the fund is designed to incorporate staking rewards via the Marinade Finance protocol. Bloomberg Senior ETF analysts noted that the expense ratio applies without cutting into the underlying Solana staking rewards. This positions the ETF as a compelling product, offering traditional investors potential yield generation—a feature unavailable to holders of non-yielding crypto ETFs.

The move to a fixed, competitive fee signals that the SEC feedback loop is nearing its final stages. Fund managers only typically disclose final fees when they are very close to receiving approval, indicating they are ready to compete for assets under management (AUM) from day one.

Solana and XRP: Navigating Regulatory Uncertainty

The very fact that the SEC is reportedly close to approving ETFs for XRP and Solana marks a significant shift in the U.S. regulatory environment. For years, the SEC’s stance on most non-Bitcoin, non-Ethereum assets was one of ambiguity or outright hostility.

The XRP Clarity

The ongoing legal battles, particularly the court ruling that determined XRP was not a security when sold on exchanges, provided the necessary regulatory clarity that emboldened issuers like Canary Capital. The proposed Canary XRP ETF directly benefits from this judicial precedent, allowing the SEC to consider the product without the immediate, paralyzing “unregistered security” designation that has halted other altcoin filings. The ETF’s potential approval would cement XRP’s status as a viable, regulated asset class within the U.S. financial system.

The Solana Staking Innovation

The Canary Marinade SOL ETF is a pioneering product due to its inclusion of staking. Solana’s high-performance blockchain is secured by Proof-of-Stake (PoS), which generates rewards. Integrating staking into an ETF introduces a new dynamic, offering investors a total return profile (price appreciation + yield). While the SEC has historically been cautious about features that complicate the security analysis of an asset, the recent regulatory shift and the structure provided by Canary Capital appear to be meeting the agency’s requirements.

The integration of Marinade Finance, a decentralized staking protocol, is crucial. It shows a commitment to leveraging decentralized mechanisms to generate yield while BitGo maintains custody of the private keys, addressing the institutional need for security and control.

The Government Shutdown and Approval Timeline

The most recent filings occurred amidst the threat and subsequent reality of a partial U.S. federal government shutdown. This creates a uniquely pressurized environment for regulatory action.

SEC Operation Delays

During a shutdown, the SEC is typically forced to furlough non-essential staff, severely limiting its capacity to review and approve complex, time-sensitive applications like crypto ETFs. Deadlines tied to the mandatory review processes (e.g., the 19b-4 process) are often suspended or passed without action. This regulatory pause creates a backlog that must be processed once the government reopens.

The Race Against the Clock

By filing Amendment #6 (a high number of amendments suggests intensive dialogue with the SEC) and disclosing the final fees during this chaotic period, Canary Capital demonstrated that the legal and commercial aspects of their filing are essentially complete. The firm is positioning itself for immediate approval the moment the government resumes full operations. Analysts suggest the SEC may choose to batch-approve single-product crypto ETFs in the weeks following the shutdown, making Canary Capital’s proactive filing a strategic advantage.

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Conclusion: Mainstreaming Altcoins

The advancement of the Canary XRP ETF and the Canary Marinade SOL ETF signifies more than just two new financial products; it represents the formal acceptance of major altcoins—specifically XRP and Solana—into the regulated U.S. capital markets. The willingness of Canary Capital to engage deeply with the SEC, make necessary structural changes, and enter a competitive fee structure (0.50%) confirms that institutional investors are prepared to dedicate significant resources to bring digital assets to the mainstream. This development is crucial for expanding the crypto market beyond Bitcoin and Ethereum, bringing new liquidity and legitimacy to the XRP and Solana ecosystems.