Analysts raise concerns over Canary Capital’s attempt to list a Trump Coin ETF without a futures market in place.
The push for a Trump-themed cryptocurrency exchange-traded fund (ETF) in the United States has sparked regulatory skepticism, as experts question whether the product can clear the approval process. Canary Capital recently filed for its Canary Trump Coin ETF, which aims to directly hold and provide exposure to the Official Trump (TRUMP) token—a memecoin launched by President Donald Trump earlier this year.
According to Bloomberg ETF analyst Eric Balchunas, the biggest hurdle lies in compliance with SEC requirements, which traditionally mandate that a futures product for the asset must trade for at least six months before an ETF can be approved.
“That doesn’t exist as far as I can see,” Balchunas said, noting that while 40 Act funds can follow a different approval pathway, the challenge remains significant.
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Regulatory Concerns and Market Risks
Unlike previous crypto ETFs that required filings such as Form S-1 and Form 19b-4, Canary’s proposal leans on the Investment Company Act of 1940, similar to the approach REX Shares used for its Solana staking ETF. However, experts warn this method could be seen as a regulatory workaround, raising further scrutiny.
Nate Geraci, president of ETF Store, described the strategy as “a regulatory end-around,” adding that investors should be cautious.
Meanwhile, REX Financial CEO Greg King advised ETF issuers to remain selective, emphasizing that crypto investments “get pretty sketchy below the top 10, certainly below the top 20.” With TRUMP token currently ranked 55th and trading around $8.40—a sharp decline from its all-time high of $46.50 in January—the volatility risk remains high.
The SEC review process for crypto-related ETFs typically spans months, and with the lack of an established futures market for TRUMP, approval appears uncertain. As regulatory scrutiny intensifies, Canary’s bold move may set the tone for future politically-linked crypto products—but investors should tread carefully.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.