Canary Capital has filed for a new exchange-traded fund (ETF) with the US Securities and Exchange Commission (SEC), proposing the Canary Staked TRX ETF launch.
According to the S-1 registration statement submitted on April 18, the fund would offer investors exposure to the price movements of TRX while incorporating staking features. The application is pending regulatory approval.
The ETF would hold actual TRX tokens, with custody managed by BitGo Trust Company. Notably, this is the first ETF related to TRX.
The move represents an attempt to expand crypto investment products beyond traditional spot holdings and explore yield-generating features tied to proof-of-stake (PoS) blockchain networks.
However, staking within US-listed crypto ETFs remains a contested regulatory issue.
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 industry met with the SEC's Crypto Task Force on 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 sent a letter to the SEC in February, 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 SEC has delayed decisions on 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.
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