Canary Capital Seeks SEC Approval for Innovative Staked TRX ETF, Targeting Yield Optimization

Investment firm Canary Capital has formally submitted an application to the U.S. Securities and Exchange Commission (SEC) for a groundbreaking Staked TRX Exchange-Traded Fund (ETF). The proposed product aims to provide investors with exposure to staked TRON (TRX) tokens while maximizing yield generation through blockchain-based staking rewards. This move represents a significant development in cryptocurrency investment vehicles, potentially offering institutional and retail investors a regulated avenue to participate in proof-of-stake yield mechanisms. The filing comes amid growing institutional interest in crypto yield products and could set a precedent for similar staked-asset ETFs if approved. Market analysts suggest this initiative may further bridge traditional finance with decentralized finance (DeFi) protocols.

• Canary Capital submits S-1 filing for Staked TRX ETF with SEC.
• ETF aims to hold TRX tokens and stake them for additional yield.
• SEC’s regulatory stance on staking crypto in ETFs remains uncertain.

Canary Capital, a U.S.-based asset manager, has filed an application for an exchange-traded fund (ETF) that will hold and stake TRX ,the native token of the Tron blockchain. The ETF aims to offer investors exposure to TRX market prices and produces additional yield by staking tokens. The application was submitted to the U.S. Securities and Exchange Commission (SEC) on April 18.

Staked TRX ETF Structure

The Canary Staked TRX ETF will hold spot TRX tokens and stake some of its assets to generate additional yield. BitGo Trust Company, a renowned crypto custodian, will manage the custody of the tokens. The ETF will track the TRX’s spot price index through CoinDesk Indices although its ticker symbol and management fee details remain undisclosed.

NEW: @CanaryFunds just filed for a staked TRX ETF (Tron) pic.twitter.com/2Vm5L1zWT9

Canary Capital proposes this ETF amid a growing trend of alternative cryptocurrency ETFs. These filings provide institutional investors with a new set of investment options for better portfolio diversification. Unlike other U.S based crypto ETFs applications, the Canary Staked TRX ETF filing incorporates a staking feature.

Regulatory Barriers For Crypto Products Staking

Staking, a core element in Proof-of-stake (PoS) networks like Tron, faces regulatory obstacles in the U.S. The SEC has opposed staking in crypto-related products due to redemption and tax treatment concerns . The commission has raised questions about whether staking services could be classified as unregistered securities. These regulatory problems have caused delays in the approval of similar products such as Ethereum ETFs.

U.S-listed crypto ETFs continue to pursue staking in their operations despite regulatory barriers. In recent months ,the SEC and the crypto industry have held discussions to develop models to address the identified concerns. The use of third-party providers for staking and issuance of liquid staking tokens could enable compliance with the SEC’s settlement cycles and compliance requirements.

Altcoin ETF Trend

In 2024 multiple applications for altcoin ETFs such as Solana (SOL), XRP and Litecoin (LTC) proposals have been filed for approval. However, the industry remains skeptical about the acceptance of non-core cryptocurrency products by traditional investors although these products demonstrate the increased adoption of digital assets in mainstream finance.

The Canary Staked TRX ETF submission comes amid legislative and regulatory discussions about cryptocurrency and staking protocols. In February, U.S. senators including Cynthia Lummis requested the SEC to publish their position on staking of crypto products. The senators noted that the current policies limit U.S. asset managers compared to international competitors especially in Europe, Canada and the UK.

The TRX ETF submission follows other similar applications from Grayscale which filed for staking in Ethereum ETFs. However, the SEC has prolonged the review and approval process of these requests. This outcome of this process could determine the future of staked crypto ETFs.