Canary Funds has submitted an amended S-1 to the U.S. Securities and Exchange Commission (SEC), detailing the confirmed assets for its forthcoming American-Made Crypto ETF. This new exchange-traded fund will track the CoinDesk Made-in-America Index, which focuses on cryptocurrencies that have U.S.-based foundations, teams, or mining activities. The updated filing offers a clearer insight into which assets will be included when the ETF launches.
Details of the Amended Filing
The amended S-1 filing, submitted on December 1, 2023, outlines the operational framework of the ETF, its regulatory classification, and the specific assets it plans to hold. The CoinDesk Made-in-America Index has been adjusted to comply with the SEC’s updated generic listing standards. These standards impose restrictions on the types of crypto assets eligible for inclusion in exchange-listed portfolios, leading to a more selective range of assets.
As of November 26, 2023, the index comprises eight cryptocurrencies: HBAR, AVAX, BTC, LINK, LTC, SOL, XLM, and XRP. Each asset is weighted according to market capitalization, with no single asset exceeding a 20 percent allocation and each having a minimum allocation of one percent.
Criteria for Asset Inclusion
The selection process for the index focused on cryptocurrencies that demonstrate a verifiable connection to U.S. operations. Qualifying criteria include a U.S.-based management team, headquarters, or, for proof-of-work tokens, at least 25 percent of blocks mined by U.S. operators. The index excludes memecoins and any tokens that do not meet the exchange’s listing criteria, narrowing the eligible pool significantly.
This careful selection process allowed major cryptocurrencies like Bitcoin, Solana, XRP, and Avalanche to be included, while others that previously qualified were excluded under the new regulations.
Operational Structure of the ETF
According to the filing, the American-Made Crypto ETF will function as an exchange-traded product listed on Cboe BZX under the ticker MRCA. The ETF will issue and redeem shares in large blocks through authorized participants. These participants will use either cash or cryptocurrency to acquire baskets of shares, and redemptions will be processed in a similar manner.
The primary objective of the ETF is to replicate the performance of the Made-in-America Index. Additionally, the filing mentions a secondary goal of capturing network rewards, such as staking or transaction validation income, when available on supported assets. While this additional income source is not guaranteed, it could offer investors an extra yield opportunity.
As the cryptocurrency landscape evolves, the launch of the American-Made Crypto ETF represents a significant step towards increasing the legitimacy of U.S.-based cryptocurrencies, potentially attracting more institutional investment and interest from retail investors alike.
