Canary Capital Proposes First Spot TRX ETF with Staking

• Canary Capital’s TRX ETF filing is the first to combine spot exposure with staking rewards.
• The proposed ETF will use BitGo as custodian and CoinDesk Indices for TRX price tracking.
• TRON’s TRX token has a $22B market cap and offers approximately 4.5% annual staking yield.

Canary Capital filed an S-1 form with the SEC on Friday, 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.

The Canary Staked TRX ETF aims to provide returns from TRX price movement and its staking mechanism. Third-party providers will manage staking, according to the filing. BitGo Trust Company will serve as custodian, using CoinDesk Indices for pricing data. The fee and ticker are yet to be disclosed. 

This proposal stands out because most crypto ETF applicants removed staking components from filings to meet SEC requirements. Canary’s direct inclusion of staking explicitly tests current regulatory boundaries regarding yield features.

What is the SEC’s Stance on Staking?

Historically, the SEC has opposed investment products offering direct staking features. The commission previously indicated staking services in ETFs could involve unregistered securities, which had led firms to amend their filings of Ethereum ETFs earlier, removing any staking features.

While the SEC might be easing crypto rules after Trump’s return to power, it remains hesitant on staking ETFs, recently delaying Grayscale’s request to add staking to its ETH Trust products. 

Related: The ‘Longest Ever’ Bullish Sign Just Appeared on Altcoin Charts

And in this instance, TRON founder Justin Sun’s SEC history adds to the complexity. He was charged in 2023 with manipulating TRX/BTT tokens; though nearing settlement, the case still looms over this proposal.

What About TRON’s Market Position?

TRX remains a top-ten crypto by market cap, valued over $22 billion. StakingRewards data shows holders can earn roughly 4.5% annually staking TRX, attracting income investors.

The TRON network is also a market leader for stablecoin volume (USDT), ranking second globally in transactions due to high capacity and low fees. This USDT usage is what drives most of its network activity.