Canary's TRX Staking ETF Filing Sets Stage for Major Shift in Crypto Investment Landscape

In a move that few saw coming, Canary Capital Group LLC has officially filed to launch a staked Tron (TRX) ETF, potentially opening the doors to a wave of institutional interest in one of crypto's most actively used networks.

Canary Capital Group LLC, the investment firm founded by former co-founder and CIO of Valkyrie Funds Steven McClurg, has filed for a new ETF that will directly track the price of Tron (TRX)output: Canary Capital Group LLC, the investment firm founded by former co-founder and CIO of Valkyrie Funds Steven McClurg, has filed for a staked Tron (TRX) ETF.

The firm filed a Form S-1 registration statement for the Canary Staked TRX ETF with the U.S. Securities and Exchange Commission (SEC) on Friday. The ETF will be structured as a trust, with shares of the trust intended to be listed on a national securities exchange.

The ETF will seek to provide investors with an opportunity to invest in the cryptocurrency market through an exchange-traded product. The trust will hold TRX tokens and will also plan to use a portion of the trust's holdings to participate in the Tron network's staking program in order to generate network rewards, which will be distributed to the trust's common shares of beneficial interest.

The ETF will be priced and units will be created or redeemed in cash at 4 p.m., ET, each day, Monday through Friday, except for national holidays, according to the filing. The trust will calculate the net asset value (NAV) of the trust's common shares of beneficial interest at the same time each day.

The trust will use the Coindesk Indices in order to determine the market price of TRX for purposes of calculating NAV and for calculating the value of baskets of common shares of beneficial interest to be issued or redeemed. The firm will use an index that aggregates the TRX spot prices from several major cryptocurrency exchanges to provide a snapshot of the prevailing market rate at a specific time.

The sponsor, Canary Capital, will be responsible for covering the ordinary operating costs of the trust, while any extraordinary expenses will be borne by the trust. Shares of the trust will be created or redeemed in cash in accordance with SEC Rule 415 and will be issued and redeemed in baskets of common shares of beneficial interest, the filing stated.

The trust will not be subject to any material risk of bankruptcy or insolvency, and it will not engage in any futures or options transactions. It also stated that it has no intention of applying for any investment company exemption that would permit it to be organized as a closed-end investment company.

The trust will not be engaged in any lending activities and investors will not receive any voting rights in respect of the trust's common shares of beneficial interest. The trust will not use any of the assets to post any collateral or to secure any debt or obligation of the sponsor or any other party.

The trust will be governed by an agreement between the sponsor and the trustee, State Street Trust Company, and will be formed in accordance with the laws of the State of Delaware as a statutory trust. The sponsor will be responsible for selecting the trust's assets and for maintaining the trust's investment portfolio. The trustee will be responsible for holding the trust's assets and for distributing any dividends or capital gains to the trust's common shareholders.

Canary Capital was founded earlier this year by Steven McClurg, who previously co-founded and served as CIO of Valkyrie Funds. The firm is focused on developing innovative digital asset investment products for accredited investors.

Earlier this month, Canary filed for an ETF that will track the price of the Pudgy Penguins (PENGU) token. The firm has also filed for ETFs that will track SUI, LTC, HBAR, XRP, AXL, DOGE and SOL.

The filings with the SEC do not guarantee that the ETFs will be approved. The SEC has yet to approve any spot bitcoin ETFs, despite approving several bitcoin futures ETFs last year.

Earlier this year, the regulator rejected applications for a spot bitcoin ETF from both ARK Invest and Cathie Wood and from BlackRock (NYSE:BLK). However, the SEC's actions could pave the way for the approval of several new crypto ETFs later this year.

The SEC is currently reviewing an application for a spot bitcoin ETF from iShares, a division of BlackRock. The agency is also reviewing an application for a spot bitcoin ETF from Cathie Wood's ARK Invest and from a firm called Galaxy Digital.

The fate of the iShares product, in particular, could have a major impact on the crypto market. If the SEC approves the iShares ETF, it could open the door for a wave of new crypto ETFs to be listed on U.S. exchanges.

Canary Capital is also planning to apply for an ETF that will combine the features of a traditional ETF with the yield-generating potential of decentralized finance (DeFi). The ETF will be structured as a trust and will hold a portfolio of TRX tokens.

The trust will also plan to participate in the Tron network's staking program, which is designed to reward users who hold TRX tokens for extended periods of time. By staking its TRX holdings, the trust will be eligible to receive a portion of the