Canary Capital Files an Application for a Staked TRX (Tron) Exchange-Traded Fund (ETF)

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.

Canary Capital, a U.S.-based asset manager, has applied for an exchange-traded fund (ETF) that will hold and stake TRX, the native token of the Tron blockchain.

The ETF, named Canary Staked TRX ETF, will provide investors with exposure to TRX market prices and aims to generate additional yield by staking a portion of its assets. The application was submitted to the U.S. Securities and Exchange Commission (SEC) on April 18 and does not yet include a ticker symbol, management fee details or an ETF name.

The ETF will be tracking the TRX’s spot price index provided by CoinDesk Indices and will be subject to the minimum maintenance requirements set by the ETF's rules. The tokens will be held in the custody of BitGo Trust Company, a digital asset custodian and subsidiary of BitGo.

The filing comes as several other U.S. asset managers are applying for crypto ETFs. However, this filing stands out as it includes a feature to directly stake a portion of its assets in TRX throughout the day.

The application specifically mentions that the ETF will be "structured to enable the net TRX derivative to be staked," and it will use a third-party provider to service and aggregate liquid staking tokens in accordance with the SEC's settlement cycles and compliance requirements.

The integrtion of staking in the ETF application highlights the ongoing regulatory dialogue about cryptocurrency and staking protocols. Earlier in February, U.S. senators Cynthia Lummis and Thomas R. Carper requested the SEC to publish its position on the possibility of asset managers to stake cryptocurrencies in their products.

The senators highlighted that the current policies limit U.S. asset managers compared to international competitors, especially in Europe, Canada and the UK, who are permitted to engage in crypto staking activities.

The TRX ETF filing also follows other applications from Grayscale which filed for an Ethereum ETF that would also include staking. The SEC has since prolonged the review and approval process of these requests which could determine the fate of staked crypto ETFs.