Canary Capital Files for Groundbreaking Staked TRX ETF with SEC

Canary Capital has made a significant move in the cryptocurrency investment landscape by filing for the Canary Staked TRX ETF with the U.S. Securities and Exchange Commission (SEC), as indicated in their S-1 registration statement from April 18. This proposal not only seeks to track the price movements of TRON's native token, TRX, but also introduces staking features that offer investors an expected annual yield of 4.5%. This ETF aims to provide a unique opportunity by holding actual TRX tokens, with BitGo Trust Company managing the custody of these assets. This marks the first instance of an ETF related to TRX, as previous attempts related to staking within U.S. crypto ETFs faced regulatory hurdles. This endeavor underscores a broader ambition to diversify crypto investment products beyond mere spot holdings, exploring innovative yield-generating features tied to proof-of-stake (PoS) blockchain networks. However, the inclusion of staking in U.S.-listed crypto ETFs presents a contentious regulatory challenge. Historically, the SEC, under prior leadership, has voiced strong reservations about these features due to potential disruptions in investor redemption timelines, tax treatment complexities, and concerns regarding whether staking may constitute unregistered securities offerings. These concerns have previously compelled issuers like Grayscale to modify their ETF proposals by removing staking components to align with SEC standards. The current political landscape within the SEC, which now includes crypto-friendly Chair Paul Atkins, has incited hope among crypto proponents that the regulatory environment may loosen. Recent discussions between industry representatives and the SEC reaffirm the importance of staking in the crypto ecosystem, particularly for platforms like Ethereum and TRON, known for their PoS mechanisms. Senators, including Cynthia Lummis, have also expressed their support for clearer policies around staking, emphasizing a competitive disadvantage for U.S. asset managers compared to their international counterparts. Interestingly, as the TRX token experiences a surge in popularity, having recently surpassed Cardano in market capitalization, the potential success of the Canary ETF may pave a new path for institutional investors. Analysts predict that, should this ETF receive approval, additional asset managers may file for similar products, shifting institutional interest towards a broader array of altcoins. This would signify a measurable shift in the SEC’s approach, possibly encouraging fresh capital into high-yield altcoins that have previously been overlooked for structured investment products. Investors are advised to monitor this developing situation closely, as the eventual decisions of the SEC in June 2025 regarding this ETF—and others—hold far-reaching implications for the cryptocurrency market as a whole.