Canary Funds has submitted an amended S-1 registration statement to the U.S. Securities and Exchange Commission (SEC), announcing the confirmed assets for its upcoming American-Made Crypto ETF. This new exchange-traded fund will track the CoinDesk Made-in-America Index, which is specifically designed to include cryptocurrencies that have strong ties to the United States, whether through their foundations, teams, or mining activities.
The filing, dated December 1, 2023, provides a detailed outline of the ETF’s operational framework and the regulatory classifications that govern it. It reflects the SEC’s recently established generic listing standards, which impose stricter criteria for crypto assets to be included in publicly traded portfolios. Consequently, the updated index now features only those assets that meet these requirements.
Key Assets in the American-Made Crypto ETF
As of November 26, 2023, the CoinDesk Made-in-America Index comprises eight cryptocurrencies: HBAR, AVAX, BTC, LINK, LTC, SOL, XLM, and XRP. Each asset is weighted according to its market capitalization, with a maximum allocation of 20 percent and a minimum of 1 percent. This structure ensures a balanced representation of assets while adhering to the new regulatory guidelines.
The choice of these specific cryptocurrencies stems from their demonstrable connections to U.S.-based operations. Qualifying characteristics include having a management team or headquarters located in the United States, or in the case of proof-of-work tokens, at least 25 percent of their blocks mined by U.S. operators. Notably, the index explicitly excludes memecoins and other tokens that fail to meet the exchange’s listing criteria, significantly narrowing the pool of eligible assets.
Operational Mechanics of the ETF
The American-Made Crypto ETF will function as an exchange-traded product listed on Cboe BZX under the ticker symbol MRCA. The ETF will issue and redeem shares in large blocks through authorized participants. These entities will exchange either cash or cryptocurrencies to acquire baskets of ETF shares, with redemptions processed in a similar manner.
The primary objective of the ETF is to closely mirror the performance of the Made-in-America Index. Additionally, the filing indicates a secondary goal of capturing network rewards, such as staking or transaction validation income, when applicable. While these rewards are not guaranteed, they could provide an extra source of yield for investors.
In summary, the emergence of the American-Made Crypto ETF represents a significant development in the cryptocurrency market, offering investors a structured and regulated avenue to invest in U.S.-based crypto assets. With a carefully selected lineup of established cryptocurrencies, the ETF aims to combine investment potential with compliance to evolving regulatory standards.
