Nasdaq Requests SEC Approval for 21Shares Sui ETF

The ETF will track the price of SUI. Meanwhile, Sui’s ecosystem is managing the fallout of the $220 million exploit involving Cetus, a decentralized exchange, with over half of network validators supporting a recovery vote. While the SEC evaluates Sui ETF proposals, ARK Invest CEO Cathie Wood is still very bullish on ETFs’ long-term relevance, despite the growing interest in crypto wallets.

Sui ETF Race Heats Up

Nasdaq formally filed to list a spot Sui ETF in the United States on behalf of crypto asset manager 21Shares. This filing kicked off the key review process by the Securities and Exchange Commission (SEC). 

The exchange submitted a 19b-4 form on May 23, which happened weeks after 21Shares filed its S-1 registration statement on April 30. Both filings are required before the proposed fund, which would track the price of the Sui (SUI) token, can be approved and listed for trading. The SEC is now on the clock, with an initial 45-day window to accept, reject, or delay the application. However, this timeline can be extended, with a final decision deadline set for Jan. 18, 2026.

19b-4 form to file spot Sui ETF

The proposed ETF would use BitGo and Coinbase Custody as custodians to safeguard the SUI tokens on behalf of the trust. While the filing did not reveal information on the ETF's potential ticker or management fee, it did share  some details about SUI’s role in its native blockchain. According to the documents, the token is used for staking to earn rewards, paying gas fees, enabling liquidity across decentralized applications, and for governance participation. Sui is frequently called a contender to Solana, given its performance-focused architecture for decentralized applications.

Cryptos ranked by market cap (Source: CoinMarketCap)

SUI is currently the 11th-largest cryptocurrency by market cap, with a valuation of $12.3 billion. This is still way behind Solana’s $92 billion. Nonetheless, 21Shares is pushing forward with SUI-based offerings, and already launched exchange-traded products for the token in Europe on Euronext Paris and Amsterdam. 

These listings contributed to the $317.2 million in assets under management (AUM) across all SUI-based exchange-traded products globally, according to CoinShares. Between May 16 and May 24, inflows into these products increased by $2.9 million, which placed SUI just behind Bitcoin, Ethereum, Solana, and XRP in terms of ETP net assets. 

21Shares is also not alone in pursuing a US-listed Sui ETF. Canary Capital filed the necessary forms, which means that the race is on in the spot Sui ETF landscape.

Sui Validators Weigh Cetus Fund Recovery Plan

Although a spot Sui ETF is still in the works, the Sui project itself is dealing with the fallout of a recent security breach. Sui-based decentralized exchange Cetus is moving closer to potentially recovering a large portion of the $220 million in digital assets lost during a major exploit on May 22. 

Shortly after the breach, Cetus was able to freeze $162 million of the stolen funds, and it has since started a community governance vote to determine the path forward. The vote is set to conclude by June 3, and it will decide whether the frozen assets can be recovered from the attacker and placed in a multisig trust account for eventual redistribution to affected users.

The recovery proposal is part of a plan that includes using the Cetus treasury and securing a critical emergency loan from the Sui Foundation. If approved, the combined resources will make it possible for Cetus to fully compensate the users impacted by the exploit. According to a May 27 post by the Sui Foundation on X, 52.9% of validators have already voted in favor of the proposal, while 46.7% have yet to vote.

The incident reignited discussions about the role of Sui validators, particularly their ability to freeze funds. Some in the community raised concerns about potential centralization risks, while others applauded the swift action as a necessary security measure. Under Sui’s governance model, tokenholders can stake their SUI with validators who vote in accordance with their preferences.

Cetus explained that, if the vote passes and the frozen funds are recovered, a 100% reimbursement for all users will be possible, supported by both the Sui Foundation loan and community backing. Regardless of the vote’s final outcome, Cetus committed to starting a recovery process and said that it will publish a comprehensive plan with details about the next steps for affected users.

Crypto ETFs Are Here to Stay

With regards to whether a Sui ETF will actually perform well, Cathie Wood might have the answer to that. The ARK Invest CEO believes that cryptocurrency ETFs will continue to play a major role in the financial ecosystem, even as direct wallet adoption grows over the next decade. 

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At the Solana Accelerate event in New York on May 23, Wood spoke about the simplicity and convenience of ETFs for mainstream investors, and suggested they will stay relevant as a user-friendly bridge to more complex forms of crypto engagement. “Wallets seem so complicated, so much friction for consumers, they just wanna push a button,” she said. Despite this, Wood still acknowledged that wallets offer a critical layer of security, and she called them “insurance policies against something going wrong in the traditional world.”

While direct wallet use continues to grow, ETFs are still attracting a lot of attention. In fact, US-based spot Bitcoin ETFs recorded approximately $2.75 billion in inflows during the week ending May 23. This coincided with Bitcoin’s surge to a new all-time high of $111,970. Since the launch of spot Bitcoin ETFs in January 2024, they have accumulated roughly $44.49 billion in inflows. 

Spot Ether ETFs have seen more modest success with about $2.77 billion in inflows. Wood attributed part of Ether ETFs’ slower uptake to regulatory constraints, particularly the SEC’s refusal to permit staking. The SEC also recently delayed its decision on Bitwise’s proposal to incorporate staking in its Ether ETF.

Nevertheless, Wood sees Ether as a critical stepping stone for new crypto investors, especially those beginning to explore smart contracts. She believes that many will start with Ether and eventually migrate to other ecosystems like Solana as they deepen their understanding. 

However, she acknowledged potential skepticism toward Solana among older investors, particularly after President Donald Trump’s meme coin launch on the network. TRUMP saw a rapid 50% decline shortly after its debut in January, which possibly only reinforced doubts among traditional investors. While Wood did not share a price target for Solana, she confirmed that there is ongoing research and that she will reveal it once finalized.