title: US investment firm Canary Capital has filed with the Securities and Exchange Commission (SEC) to launch a new exchange-traded fund (ETF) that would combine cryptocurrency and NFTs

The proposed fund Canary PENGU ETF, would include the $PENGU token—issued on the Solana blockchain—and digital assets from the Ethereum-based Pudgy Penguins NFT collection

Canary Capital, a US investment firm, has applied to launch an ETF that would combine cryptocurrency and NFTs in a single investment product, according to a filing with the Securities and Exchange Commission (SEC) on Thursday.

The proposed fund, named Canary PENGU ETF, aims to include both the $PENGU token, issued on the Solana blockchain, and digital assets from the Ethereum-based Pudgy Penguins NFT collection.

This marks the first known attempt to include NFTs in a regulated ETF in the United States.

The SEC filing signals the firm’s intent but does not provide a timeline for review or approval.

What is an ETF?

An exchange-traded fund (ETF) is a financial product that tracks the performance of a specific asset or group of assets. ETFs are traded on stock exchanges and can be bought and sold like individual shares.

ETFs are commonly used to provide investors with exposure to specific sectors, commodities, or indexes without requiring them to directly purchase or manage the underlying assets.

In the context of cryptocurrency, ETFs can give investors exposure to digital tokens without the need to handle wallets, exchanges, or custody.

Why is this significant?

If approved, this would be the first ETF in the US to include NFTs as part of its portfolio. Previous digital asset ETFs, such as those tracking Bitcoin or Ethereum, have only included fungible tokens.

NFTs, however, are unique and variably priced, presenting challenges for inclusion in a regulated investment fund.

Including and valuing such assets, and how they would be stored and audited, are among the topics that would need to be addressed by the SEC. The commission has yet to issue specific guidance on NFT-based ETFs.

Other firms, including VanEck and Bitwise, have submitted proposals for ETFs tied to cryptocurrencies like Solana, Litecoin, and XRP.