The Securities and Exchange Commission (SEC) has officially acknowledged Canary Capital’s filing for a Staked TRX ETF. This could materialize into the first exchange-traded fund to offer both investment in TRX’s current market price (spot exposure) and the potential to earn staking rewards in the United States.
The acknowledgment is more than a procedural recognition. It signals the SEC’s willingness to engage with innovative crypto investment products that go beyond simple price tracking. Although the formal acknowledgment does not ensure success, it initiates the regulatory review process and advances the proposal towards possible approval.
TRX Breaking Ground for Staked ETFs
Unlike traditional ETFs that passively hold underlying assets, this proposed fund would actively participate in TRON’s staking mechanism, generating additional yield for investors. The fund aims to provide exposure to the TRX spot price while offering staking rewards, something the SEC has never approved in a crypto ETF.
According to Canary‘s April 18 S-1 filing, BitGo would serve as the asset custodian, and CoinDesk Indices would be used for price calculations. The fund represents Canary’s seventh crypto-focused ETF application in just over a year.
Regulatory Considerations in Tron ETFs
The acknowledgment coincides with a more favorable regulatory environment under newly appointed SEC Chairman Paul Atkins. He brings a crypto-friendly approach to digital asset regulation. He took office shortly after Canary’s filing, fostering optimism for clearer digital asset regulations.
This contrasts with the previous administration under Gary Gensler, who notably opposed staking features in regulated products. The shift has increased issuers’ optimism that staking features may soon be integrated into various crypto funds.
However, staked ETFs present unique regulatory challenges. These include slashing risk, which refers to penalties imposed if staked assets are used by validator nodes for malicious activities, yield variability based on network conditions, and complex custody arrangements. These factors require careful consideration to ensure investor protection while maintaining the product’s innovative aspects.
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