TRX Staking ETF Files Preliminary Prospectus as US Regulatory Debate Intensifies

A proposed exchange-traded fund (ETF) tracking staked TRX tokens has submitted its initial registration documents with regulators, coinciding with heightened discussions around cryptocurrency staking regulations in the United States. The filing comes as policymakers continue to debate the classification and oversight of proof-of-stake assets and staking-as-a-service products. Market participants are closely monitoring the development as it could set important precedents for how staked crypto assets are treated within traditional financial products. The move follows growing institutional interest in yield-bearing digital asset vehicles despite ongoing regulatory uncertainty surrounding staking mechanisms.

Staking inclusion faces regulatory hurdles

While staking is fundamental to the security and operation of PoS networks like Ethereum (ETH) and Tron, the SEC has historically prevented staking from being included in crypto exchange-traded products (ETPs). 

Initial Ethereum ETF proposals included staking features but were later required to remove them during the review process.

The SEC has raised multiple concerns about integrating staking into regulated financial products. These concerns include the redemption timelines that could disrupt the standard T+1 settlement cycle, tax treatment complexities related to staking rewards, and questions about whether staking services could constitute an unregistered securities offering.

Representatives from the crypto industryon Feb. 5. They presented models to address these concerns, such as using third-party services for staking and liquid staking tokens.

Moreover, Senator Cynthia Lummis and other US senators, requesting clarity on the exclusion of staking and arguing that the current policy disadvantages US asset managers compared to international competitors in Canada, Europe, and the United Kingdom.

However, the SECon two major rule changes related to crypto ETPs, including the Grayscale Ethereum Trust’s request to stake a portion of its holdings. Decisions are now expected by June 2025.