The meme coin of U.S. President Donald Trump may soon launch an exchange-traded fund (ETF) in the United States. Canary Capital is the first to submit an application for a product that buys and holds the token, but analysts question how the fund will navigate regulatory hurdles.
In documents submitted to the U.S. Securities and Exchange Commission (SEC) on Tuesday, Canary stated that its fund, "Canary Trump Coin ETF," will directly hold and provide investment exposure to Official Trump (TRUMP).
Trump launched the token in January, just days before he was set to return to the White House. According to TradingView data, the token is currently ranked 55th by market capitalization, down 69% from its historical high of $46.50 set the day before Trump's inauguration on January 19.
The token has sparked controversy, with critics arguing that anyone can anonymously purchase influence over the president through the token, raising concerns about conflicts of interest as Trump could guide cryptocurrency policy.
Canary must also submit additional documents for its product to pass through the SEC's usual approval process, which typically takes nearly a year.
Bloomberg ETF analyst Eric Balchunas wrote on X on Tuesday that he questioned whether the ETF would "get approved," as ETFs need to have at least six months of futures products on the exchange.
"As far as I can see, such products do not exist," Balchunas stated, but added that it might exist under the Investment Company Act of 1940 (i.e., "40 Act" funds).
Unlike other cryptocurrency ETF issuers that must submit S-1 and 19b-4 forms to register and notify the SEC, 40 Act funds follow a different regulatory path, similar to how REX Shares brought its Solana (SOL) staking ETF to market.
REX has also submitted an application for an ETF tracking TRUMP under the 40 Act, which will purchase shares of offshore companies holding the token.
ETF Store President Nate Geraci described this strategy as a "regulatory workaround."
Canary's application documents explain that the fund may not be a suitable investment for shareholders who cannot "bear more risk than what an exchange-traded product not holding $Trump may involve."
"These shares are speculative securities," the application documents added.
This comes after comments from REX Financial CEO Greg King on Monday, who warned ETF issuers to be cautious when choosing the cryptocurrencies their funds track, as the market "becomes quite dubious below the top 10, and even more so below the top 20."
Canary Capital established a legal entity for the Trump Coin ETF with the Delaware government on August 14.
Related: Trump Media & Technology Group to establish CRO treasury company through $6.42 billion deal with Crypto.com
Original article: “ETF Analyst Questions How Canary's TRUMP Fund Will 'Get Approved'”
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