The move follows SEC guidance treating staking rewards as income, enabling asset managers like Canary to back blockchain-based tokens through delegated staking.
Investment company Canary Capital filed an S-1 application for a staked INJ (INJ) exchange-traded fund (ETF) with the United States Securities and Exchange Commission (SEC) on Thursday.
INJ is the governance, staking and utility token for the Injective Protocol, a layer-1 blockchain network focused on decentralized finance (DeFi) operations.
One of the main objectives of the fund is to accrue staking rewards through providing validation services using an “approved staking platform,” the filing reads.
Canary Capital formed a Delaware Trust for its staked Injective ETF in June, tipping plans for the altcoin investment vehicle. The application marks the latest altcoin ETF filing in the US.
The application also reflects the convergence of traditional and decentralized finance (DeFi). This trend accelerated following guidance from the SEC classifying staking rewards as income and not securities transactions subject to capital gains, opening the door for asset managers to act as validators through delegated staking.
Related: SEC delays in-kind redemption decision for Bitwise crypto ETFs
The line between TradFi and DeFi blurs, polarizing the crypto community
Traditional and decentralized finance are converging into a unified sector, according to Nelli Zaltsman, the head of blockchain payments innovation at Kinexys, a real-world asset tokenization platform launched by banking giant JPMorgan.
Zaltzman told the audience at the RWA Summit 2025 in Cannes, France, that the separation between the two areas of finance may disappear within a few years.
This convergence between digital and traditional finance also opens up opportunities for retail investors to access previously inaccessible investments, including private equity, blurring the line between accredited and retail investors, CoinFund President Christopher Perkins told Cointelegraph.
Other crypto investors have argued that merging the two sectors was inevitable and that mass adoption will come through the merger of the two worlds. Not everyone in the crypto community is convinced by this positive outlook, however.
“Institutions and ETFs are bad for crypto,” investor Nick Rose wrote on X. “Everyone cheers inflows like it’s free money, but Wall Street doesn’t HODL, they hedge, rotate, and dump when risk models say ‘exit’”
“Institutions manage exposure, take profits, rebalance portfolios, etc. Crypto wasn’t built for quarterly reports,” he said.
Magazine: SEC’s U-turn on crypto leaves key questions unanswered
