Canary Capital has officially submitted a request to the US Securities and Exchange Commission (SEC) to introduce a new exchange-traded fund (ETF) titled the Canary Staked TRX ETF. This filing, made on April 18, aims to provide investors with the opportunity to engage with the TRX price movements, incorporating a unique staking mechanism, pending the green light from regulatory bodies.
This ETF intends to directly hold TRX tokens under the custody of BitGo Trust Company, marking a pioneering move towards an ETF centered on TRX. The initiative is seen as a strategic effort to diversify cryptocurrency investment options, moving beyond simple spot transactions to encompass yield-generating activities associated with proof-of-stake (PoS) blockchain technologies. Yet, the incorporation of staking into US-listed cryptocurrency ETFs remains a complex regulatory issue.
**Navigating Regulatory Challenges for Staking**
Staking, a critical component for the security and functionality of PoS networks like Ethereum (ETH) and Tron, faces regulatory obstacles in its integration into crypto exchange-traded products (ETPs). Historical attempts to include staking in Ethereum ETF proposals encountered regulatory barriers, necessitating the removal of such features during the review stages.
The SEC’s apprehensions regarding the inclusion of staking in regulated financial offerings revolve around several issues. These include potential disruptions to the standard T+1 settlement cycle caused by redemption timelines, the intricate tax implications of staking rewards, and the debate over whether staking services might be viewed as an unregistered securities offering.
In response, representatives from the digital currency sector engaged with the SEC’s Crypto Task Force on February 5, presenting models aimed at addressing these concerns, including the employment of third-party services for staking and the introduction of liquid staking tokens.
Furthermore, Senator Cynthia Lummis, alongside other US senators, sought clarity in February on the staking exclusion policy from the SEC, emphasizing the competitive disadvantage it poses for US asset managers compared to their counterparts in Canada, Europe, and the UK.
Nevertheless, the SEC has postponed decisions on critical adjustments concerning crypto ETPs, including the application from Grayscale Ethereum Trust to stake a portion of its assets, with a new decision timeline set for June 2025.
Stay tuned for more updates on the evolving landscape of cryptocurrency investments and regulatory developments. #CryptoETF #SEC #Staking #TRXETF
**Tweet**: Canary Capital proposes a groundbreaking TRX-based ETF, including staking features. A bold move amidst ongoing regulatory discussions in the US. #CryptoNews #Investment #Regulation
