US SEC Begins Review of 'Canary Spot PENGU ETF' Including NFT and Meme Coin

The U.S. Securities and Exchange Commission (SEC) has officially received, for the first time, an application for a spot exchange-traded fund (ETF) that includes both non-fungible tokens (NFTs) and meme coins.

The SEC recently accepted the documentation for the 'Canary Spot PENGU ETF' submitted by Canary Capital Group and has begun its formal review process. While Canary has not yet disclosed the specific exchange, they are aiming for a listing on a major U.S. securities exchange. If approved, the Canary Spot PENGU ETF is expected to become the first ETF to simultaneously include both NFTs and meme coins.

The Canary Spot PENGU ETF is comprised mainly of the meme coin 'PENGU' based on the Solana (SOL) blockchain and the popular NFT collection 'Pudgy Penguins.' Between 80~95% of the portfolio will be allocated to the PENGU token, with the remaining 5~15% allocated to Pudgy Penguins NFTs, respectively. The ETF plans to construct its NFT holding list by considering rarity, appeal, and market value by attribute. To secure some liquidity, there will also be limited exposure to Solana and Ethereum (ETH).

Pudgy Penguins is an NFT collection featuring 8,888 penguin images. Recently, physical plush toys, 'Pudgy Toy,' utilizing Pudgy Penguins IP, have been sold through major U.S. offline retail networks such as Walmart and Target. PENGU is the official utility token of the Pudgy Penguins ecosystem and can be used for games, merchandise, and NFT purchases. Its current market capitalization is about $2.3 billion, making it the fifth-largest among meme coins.

Industry observers believe the SEC’s official acceptance could signal the emergence of new types of financial products that include NFTs. As efforts are made to combine meme coins and IP within ETFs, it is analyzed that the boundaries between traditional finance and the Web3 ecosystem are gradually breaking down.