Canary Capital Files S-1 Form with the SEC, Proposing a Spot Exchange-Traded Fund (ETF) for TRON's TRX Cryptocurrency

Uniquely, the proposed ETF includes staking rewards alongside exposure to TRX's spot price. This marks it as the first proposed spot ETF in the U.S. to offer both market exposure and staking yield.

Canary Capital has filed for a spot exchange-traded fund (ETF) that would track TRON’s TRX cryptocurrency and include its staking rewards, according to a Monday filing with the Securities and Exchange Commission.

The proposed ETF, named Canary Staked TRX ETF, seeks to provide both capital appreciation from TRX’s spot price and yield-bearing returns from its staking mechanism. Third-party providers will manage the staking services, and BitGo Trust Company will serve as custodian. The ETF will use CoinDesk Indices for pricing data, and its fee and ticker are yet to be determined.

This marks the first proposed spot ETF in the U.S. to offer both market exposure and staking yield. Most crypto ETF applicants have removed the staking components from their filings to comply with SEC requirements.

However, Canary’s direct inclusion of staking in its S-1 filing puts current regulatory boundaries on yield features to the test.

The SEC’s Stance on Staking

Historically, the SEC has opposed investment products offering direct staking features. The commission previously indicated that such services could involve the sale of unregistered securities, leading firms to amend their filings of futures ETFs earlier this year to remove any mention of staking.

While the SEC might be rolling out new crypto rules after Trump’s return to power and the regulator is reportedly planning to approve the first-ever Bitcoin ETFs this year, it remains hesitant on staking ETFs.

Earlier this year, the SEC postponed Grayscale’s request to add staking to its existing ETH Trust products.

And in this instance, TRON founder Justin Sun’s SEC history adds another layer of complexity. Sun was personally charged in 2023 with manipulating TRX and BTT tokens to inflate their prices. Though a settlement is pending and could arrive this year, the case is still pending and could impact the Canary’s application.

What About TRON’s Market Position?

TRX is currently ranked tenth on the top ten crypto list by market cap, valued at over $22 billion.

Data from StakingRewards shows that TRX offers an annual percentage yield of roughly 4.5% to those who stake their tokens, making it attractive to income investors.

The TRON network is also a market leader for stablecoin volume, specifically USDT, ranking second globally in transactions due to its high capacity and low fees. This usage of USDT drives the majority of TRON’s network activity.