The United States Securities and Exchange Commission has signed off on a leveraged exchange-traded fund linked to the SUI token from 21Shares, giving investors a way to access amplified exposure to the Sui ecosystem at a time when concerns about leverage in crypto remain prominent.

The Sui Foundation revealed on Thursday that 21Shares has introduced its 2x leveraged SUI ETF, trading under the ticker TXXS on Nasdaq. The product is structured to deliver twice SUI’s daily performance, offering enhanced gains — and magnified losses — without requiring investors to hold the token directly.

In practice, a 10% daily increase in SUI aims to translate into roughly a 20% rise for the ETF, with the inverse applying during downturns. Instead of holding SUI, the ETF relies on derivatives such as swaps and similar contracts to mirror price behavior.

SEC’s position on higher-leverage crypto products

Until now, the SEC has shown hesitation toward approving more aggressively leveraged cryptocurrency funds. In October, the regulator stated it was “unclear” whether proposed 3x and 5x leveraged ETFs could meet regulatory expectations. Earlier this week, it also issued warning letters to issuers regarding elevated leverage in products tied to equities, commodities or digital assets.

Leverage risks remain in focus

Debate over limiting excessive leverage has intensified within the digital asset sector, where borrowing-driven trading continues to magnify volatility and accelerate market drawdowns.

On Oct. 10, the crypto market experienced its largest leverage unwinding to date, with around $19 billion in positions liquidated as prices fell abruptly and forced overleveraged traders out of the market. The impact spilled over into spot markets as well, with Bitcoin dropping from highs near $126,000 in October to below $80,000 the following month.

Leverage is significantly more prevalent in crypto than in traditional markets, owing largely to derivatives platforms and perpetual futures contracts. Exchanges allow traders to open positions with leverage levels of 10x, 50x, or even higher on perpetual contracts — instruments designed to track an asset’s price without an expiration date.

Sources:

https://www.reuters.com/legal/government/sec-says-unclear-if-proposed-3x-5x-leveraged-etfs-would-be-approved-2025-10-16

https://cointelegraph.com/news/sec-approves-sui-on-steroids-etf

https://x.com/KobeissiLetter/status/1990172510546018735

https://x.com/SuiNetwork/status/1996588287918784610

https://blog.sui.io/21shares-sui-etf-txxs-nasdaq/