Canary Capital files S-1 for Hedera HBAR spot ETF

0 2,001 1 minute read

Key Takeaways

Canary Capital filed an S-1 registration for a new ETF providing regulated HBAR exposure.
Security measures for the HBAR ETF include cold storage with 24/7 monitoring and multi-authentication.

Canary Capital has filed an S-1 registration statement for a new HBAR ETF, aiming to provide investors with exposure to Hedera’s HBAR token, according to the filing.

The announcement spurred a sharp reaction in the market, with HBAR currently surging over 20% to reach $0.066, though the price shows signs of rapid fluctuation.

Canary Capital’s filing highlights a meticulously structured ETF model that employs “Authorized Participants” to facilitate the creation and redemption of shares, aligning with industry standards for crypto-based investment vehicles.

The fund’s holdings will be managed in secure custodial accounts, with a significant emphasis on security.

A portion of HBAR will be kept in “cold storage” across multiple, geographically separated locations, utilizing rigorous security measures, including 24/7 monitoring, video surveillance, multi-person controls, and multi-factor authentication.

In its S-1 filing, Canary Capital outlines conditions under which the Trust could face termination.

The Trust would be required to shut down if its shares are delisted from their primary exchange and cannot be relisted on a comparable platform within five days.

Additionally, if US regulators determine that the Trust qualifies as an investment company or a commodity pool, the operation would also cease due to impracticality.

Other triggers include regulatory actions by agencies like FinCEN, the SEC, or the CFTC that would impose licensing or compliance burdens on the Trust inconsistent with its grantor trust structure, requiring the Trust to adapt or wind down.

Upon termination, the Trust would liquidate its HBAR assets and distribute proceeds to shareholders, ensuring that all remaining liabilities, including taxes and fees, are resolved.

The filing notes that shareholders will receive cash proceeds instead of HBAR, streamlining transactions.

This move follows Canary Capital’s recent filings for similar ETFs based on XRP, Solana, and Litecoin, signaling the firm’s broader commitment to expanding crypto-based investment offerings.