Asset manager Canary Capital has filed to list an exchange-traded fund (ETF) holding Pengu (PENGU), the governance token of the Pudgy Penguins non-fungible token (NFT) project, US regulatory filings show. 

The ETF is the latest in a slew of filings for new US investment products tied to spot cryptocurrencies, including altcoins and memecoins. 

According to the filing, the ETF is intended to hold spot PENGU as well as various Pudgy Penguins NFTs. It would be the first US ETF to hold NFTs if approved. 

Additionally, “[t]he Trust will also hold other digital assets, such as SOL and ETH, that are necessary or incidental to the purchase, sale and transfer of the Trust’s PENGU and Pudgy Penguins NFTs,” the filing said. 

Launched in December, PUDGY has a roughly $438-million market capitalization as of March 20, according to CoinGecko.

On March 18, Canary filed to list the first US ETF holding Sui (SUI), the native token of the Sui layer-1 blockchain network.

Related: Canary Capital proposes first Sui ETF in US SEC filing

Policy reversal

The US Securities and Exchange Commission has acknowledged dozens of filings for new crypto investment products since US President Donald Trump took office on Jan. 20. 

They include filings for proposed ETFs for native L1 tokens such as Solana (SOL) and XRP (XRP), as well as for memecoins such as Dogecoin (DOGE) and Official Trump (TRUMP). 

Some industry analysts are skeptical that ETFs holding non-core cryptocurrencies will see a meaningful uptake among traditional investors. 

“Pengu ETF announced. Price barely goes up. New ETFs for crypto assets have become an irrelevant joke,” crypto researcher Alex Krüger said in a March 20 post on the X platform. “Most crypto ETFs will fail to attract AUM and cost issuers money.”

Since starting his second presidential term, Trump has reversed the US government’s stance on digital assets, promising to make America “the world’s crypto capital.” 

Under his predecessor, former US President Joe Biden, US regulatory agencies brought upward of 100 enforcement actions against crypto firms.

On March 20, asset manager Volatility Shares launched two Solana futures ETFs, the Volatility Shares Solana ETF (SOLZ) and the Volatility Shares 2X Solana ETF (SOLT). 

They use financial derivatives to track SOL’s performance with one- and two-time leverage, respectively. Spot SOL ETFs are still awaiting regulatory approval. 

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XDAO, a protocol based on The Open Network (TON), has enabled over 367,000 decentralized autonomous organizations (DAOs) to achieve legal status through its initiative that automates legal recognition for such organizations. 

In an announcement, XDAO said it had streamlined the DAO creation process to allow DAOs to achieve legal status. An XDAO spokesperson told Cointelegraph that the protocol offers a standard for other “sub-entities” within its legal framework. 

“Basically, those sub-entities exist both in relation to each other and outside entities that had acknowledged their existence and assented to some articles of the XDAO Labs’ Constitution,” the spokesperson told Cointelegraph. 

XDAO added that the parties recognize Singapore, where XDAO Labs is incorporated, as the primary jurisdiction where disputes may be resolved if necessary. 

Signing legally-binding documents through Telegram bots

The protocol also said it could enable the signing of legally binding documents using Web3 wallets. XDAO said DAOs could archive their transactions using a Telegram bot. 

When asked about the security and practicality of its Telegram bot-based legal framework, the XDAO spokesperson said agreements formed through the messenger work in “most jurisdictions.” However, the XDAO representative outlined its limitations, including “real estate, securities, and other matters that call for a prescribed procedure for the contract’s formation.” The spokesperson told Cointelegraph: 

“However, when making agreements through a Telegram bot, it is important to approach the recording of all details and specifics responsibly, as this can later facilitate dispute resolution.”

The spokesperson added that the bot can store information that DAO participants consider significant. It can even be used to conduct basic Know Your Customer procedures. 

Related: Texas court issues judgment against Bancor DAO after it ignored summons

How smart contract-based compliance would work in practice

When asked how their smart contract compliance models would work in arbitration scenarios, XDAO said the parties could form valid arbitration agreements through messenger or e-signature methods such as Docusign and Ethsign. This requires personalities to be firmly established and the “intention to adjudicate the dispute is clearly expressed.” 

“Arbitration is a commonly recognized dispute resolution procedure, which exists under influential international conventions. Those conventions do not specify the exact way of making an arbitration agreement, apart from it being in writing,” the spokesperson told Cointelegraph. 

The spokesperson added that if payment is required, an arbitrator can be added to the DAO with the right to a key vote. This would allow them to sign a transaction with their digital signature if the parties fail to reach a consensus. 

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