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January 2024 marked a pivotal point in the crypto industry: the US Securities and Exchange Commission (SEC) approved a bunch of Bitcoin (BTC) Spot exchange-traded funds (ETFs) after a decade of resisting it. Later that year, several Ethereum (ETH) Spot ETFs were also approved. These early successes encouraged investment funds focused on digital assets to seek approvals for other altcoins, as ETF applications for Dogecoin (DOGE), Polkadot (DOT), Solana (SOL), Avalanche (AVAX) and other high-cap cryptos have ended up on the SEC's desk in recent months.
Until Mar 20, 2025, one thing had never occurred: an NFT-based crypto ETF application. Such a move was thought to border on impossibility, given how stringently and at length the SEC evaluated ETF applications even for established fungible cryptos. And yet, the Canary Capital investment manager submitted an application to the SEC for approval of the first NFT-focused crypto ETF product, the PENGU Spot ETF, triggering a mini-revolution in the emerging space at the junction of crypto and traditional finance.
If approved, this ETF will be the first of its kind in the industry, based on a mix of PENGU tokens and Pudgy Penguins NFTs. Many observers expect Canary Capital to struggle mightily for SEC endorsement of its revolutionary product. Nevertheless, the SEC now has a track record of approving crypto ETFs — which raises hopes for both the altcoin ETFs mentioned above and the PENGU Spot ETF application.
Key Takeaways:
The proposed PENGU Spot ETF is an exchange-traded fund based on the PENGU token and the Pudgy Penguins NFTs. Its provider, Canary Capital, lodged an application for its approval with the US SEC on Mar 20, 2025. As of early April 2025, the regulator has yet to consider the application.
Canary Capital's application has historical significance as the first instance of an NFT-based ETF product submitted for approval to the SEC. It's also the first ETF that includes a relatively small-cap cryptocurrency as a significant element.