What is the Canary Staked SUI ETF?
The Canary Staked SUI ETF is an exchange-traded product designed to provide investors with exposure to the price of SUI, the native token of the SUI Network, through a traditional brokerage account.
In addition to holding SUI, the Trust participates in a staking program administered by the Sponsor, through which staking rewards are earned by validating transactions in the SUI Network’s proof-of-stake process.¹
What is SUI?
SUI is the native, proof-of-stake token of the SUI Network, a permissionless and decentralized blockchain network and development platform.
SUI serves multiple functions on the network: securing the network through staking, enabling governance participation, and paying transaction fees. The network is designed for scalability, low latency, and composability, using an object-based data model and parallel transaction execution.¹
What does “staked” mean?
Staking is the process of committing eligible digital assets to help support the operation and security of certain blockchain networks. In return, participants may receive staking rewards paid by the network.
How does the ETF obtain exposure to SUI?
The Trust holds actual SUI rather than using futures contracts or derivatives.
The value of the Shares is expected to reflect the value of the Trust’s SUI holdings, less fees and expenses.¹
Will the ETF stake all of its SUI?
Under normal circumstances, the Sponsor will seek to stake all of the Trust’s SUI, except for SUI reserved by the Sponsor in its sole discretion to facilitate foreseeable redemption transactions, pay Trust expenses, or otherwise protect the Trust and its assets.
The Trust discloses on its website the percentage of the Trust’s SUI that was staked as of the beginning of each trading day.¹
How are staking rewards treated?
If the Trust receives staking rewards, those rewards become assets of the Trust and are expected to be reflected in the fund’s net asset value (NAV), after expenses.
The Trust does not guarantee that staking rewards will be earned or maintained at any particular level.1
Do investors receive staking rewards directly?
No. Shareholders own shares of the ETF, not the underlying SUI.
Any staking rewards earned by the Trust would generally be reflected through the value of the Trust’s assets rather than being distributed directly to shareholders.¹
How is the Trust’s NAV determined?
The Trust establishes its net asset value (NAV) by reference to the CoinDesk Sui USD CCIXber 60m New York Rate, calculated by CoinDesk Indices based on a 60-minute time-weighted average price aggregated from executed trade flow across major SUI trading platforms.¹
Does buying the ETF mean I own SUI?
No. Investors own shares of the ETF. The Trust owns the underlying SUI on behalf of shareholders.
How is the Trust’s SUI stored?
According to the registration statement, the Trust’s SUI is held by a qualified digital asset custodian using institutional custody solutions. BitGo Trust Company, Inc. serves as the Trust’s custodian and holds all of the Trust’s SUI on the Trust’s behalf, primarily in cold storage. The private keys related to the Trust’s SUI are not accessible to any person or entity except the Custodian, including the Sponsor.¹
Can I transfer my ETF shares to a crypto wallet?
No. ETF shares trade through brokerage accounts and cannot be transferred to blockchain wallets.
Can I redeem ETF shares for SUI?
No. Retail investors generally buy and sell ETF shares on an exchange.
Shares are not redeemable directly for SUI by individual investors.
How does the ETF’s price relate to the price of SUI?
The Trust is designed to track the value of its SUI holdings, less fees and expenses.
Like other exchange-traded products, market prices may vary slightly from NAV during the trading day.
What are the primary risks?
As described in the registration statement, risks include:
- Changes in the market price of SUI
- Digital asset market volatility
- Blockchain and network risks
- Custody risks
- Regulatory developments
- Risks associated with staking, including potential loss of SUI through slashing penalties and liquidity constraints during activation and exit periods
- Operational risks
Investors should review the prospectus carefully before investing. For a more comprehensive list of the Fund’s risks, please view the prospectus. Read the prospectus carefully before investing.¹
Is the ETF guaranteed to earn staking rewards?
No. Staking rewards can vary over time and may be affected by network conditions, validator performance, regulatory developments, or other operational factors. There is no guarantee that staking rewards will continue or achieve any particular level.¹
¹https://www.sec.gov/Archives/edgar/data/2060703/000199937126003565/sui-424b3_021726.htm
Investing Involves Significant Risk. The loss of principal is possible. Canary Staked SUI ETF (the “Fund”) may not be suitable for all investors. This website does not constitute a recommendation of any investment strategy or product for a particular investor. Investors should consult a financial advisor/financial consultant before making any investment decisions.
The Fund’s investment objectives, risks, charges and expenses should be considered before investing. The prospectus contains this and other important information, and it may be obtained at https://canaryetfs.com/SUI/prospectus/. Read it carefully before investing.
The Fund is not a registered commodity pool or an investment company registered under the Investment Company Act of 1940. Shares of the Fund are not subject to the same regulatory requirements as mutual funds. These investments are not suitable for all investors. Funds focusing on a single asset generally experience greater volatility. Please ask your financial advisor for more information about these risks. Digital assets, such as SUI, are a relatively new asset class, and the market for digital assets is subject to rapid changes and uncertainty. Digital assets are largely unregulated and digital asset investments may be more susceptible to fraud and manipulation than more regulated investments.
SUI is subject to unique and substantial risks, including significant price volatility and lack of liquidity, and theft. The value of an investment in the Fund could decline significantly and without warning, including to zero. SUI is subject to rapid price swings, including as a result of actions and statements by influencers and the media, changes in the supply of and demand for digital assets, and other factors. There is no assurance that SUI will maintain its value over the long-term.
Fund Risks
Failure by the Fund’s Custodians to exercise due care in the safekeeping of the Fund’s SUI could result in a loss to the Fund. Investors cannot be assured that the Custodians will maintain adequate insurance with respect to the SUI held by the Custodians on behalf of the Fund to cover such losses.
The Fund is new with a limited operating history. The Fund is not actively managed and will not take any actions to take advantage, or mitigate the impacts, of volatility in the price of SUI. An investment in the Fund is not a direct investment in SUI. Investors will not have any rights that SUI holders have and will not have the right to receive any redemption proceeds in SUI. Shares of the Fund are generally bought and sold at market price (not NAV) and are not individually redeemed from the Fund. Only Authorized Participants may trade directly with the Fund and only large blocks of Shares called “creation units.” Your brokerage commissions will reduce returns.
The amount of SUI represented by shares of the Fund will decrease over the life of the Fund due to sales of SUI necessary to pay the sponsor’s fee and fund expenses. Without increases in the price of SUI sufficient to compensate for that decrease, the price of the shares will also decline, and investors will lose money on their investment. The liquidation of the Fund may occur at a time when the disposition of the Fund’s SUI will result in losses to investors.
Staking rewards generated by the Fund’s staking program will be subject to fees shared among the Staking Provider and its network of validators. The amounts owed or paid to the Staking Provider and its network of validators are collectively referred to as the “Staking Fees.” The Staking Fees will reduce the amount of SUI rewards that are generated from the Fund’s staking program that are received by the Fund.
Staking activity comes with a risk of loss of SUI. None of the Fund’s assets, including any staked assets, are subject to the protections enjoyed by depositors with Federal Deposit Insurance Corporation (“FDIC”) or SIPC member institutions. The staked assets may also be subject to “slashing” penalties. Slashings occur when a validator attests to two different histories of the chain and penalties occur when a validator is offline for a prolonged period of time. The Fund itself will not engage in staking activities, including the operation of a validator node. Instead, the staking program will be operated through the Fund’s service providers, including the Custodian and Luganodes (the Fund’s initial “Staking Provider”). While the Sponsor does not expect the activities of the Staking Provider to result in slashing penalties, there can be no guarantee that slashing penalties will not occur. Furthermore, the Custodian’s liability to the Fund for the actions of the Staking Provider is limited, and the Custodian may lack the assets or insurance in order to support the recovery of any losses incurred. Accordingly, there can be no guarantee that the Fund would recover any of its staked assets, or the value thereof, if it is subject to slashing or penalties.
The Fund’s Marketing Agent is Paralel Distributors LLC which is not affiliated with Canary Capital Group LLC or its affiliates, U.S. Bank Global Fund Services, U.S. Bank National Association, BitGo Trust Company LLC, Gemini Trust Company LLC, Luganodes and Everstake.
