Tron's first US ETF launched, combining spot and staking exposure

Canary Capital has filed with the SEC for the first TRON spot ETF in the United States with integrated staking. This revolutionary product combines direct exposure to the TRX cryptocurrency and could offer a new generation of passive returns for investors in the market.

Canary Capital has filed an application with the Securities and Exchange Commission (SEC) to launch the first Tron (TRX) spot ETF incorporating staking functionality. This innovative exchange-traded fund would not only replicate the real-time price of the TRX token, but would also allow institutional investors to generate additional returns by locking tokens on the network.

The introduction of this proposal, which follows several others focused on major altcoins and other cryptoassets, such as memecoins, marks a significant advance in the offering of digital asset financial products in the United States, where the SEC has historically been reluctant to approve ETFs with staking functions, despite the current regulatory shift. However, amid this regulatory shift, a window of opportunity has also opened for these types of funds to gain ground.

If the SEC approves Canary's proposed fund, the Canary Staked TRX ETF, investors will be able to access a simpler and more secure way to participate in the Tron ecosystem, combining direct exposure to the digital asset with the possibility of earning passive income. This financial product, in turn, could set a precedent for future crypto exchange-traded funds that integrate staking mechanisms, driving institutional adoption and diversification in the broader market.

Canary Capital proposes an innovative Tron ETF

The new proposal Canary Capital's ETF, formally filed with the SEC on April 18, marks a milestone as the first ETF to offer direct participation in TRX by combining price exposure and staking rewards.

So far, the cryptocurrency ETFs approved in the country, which offer exposure to Bitcoin and Ethereum, only allow investors to gain exposure to the price of the underlying assets, BTC and ETH, respectively, without integrating mechanisms to generate additional income. Although several fund managers have attempted, unsuccessfully so far, to include staking in Ethereum ETFs, the SEC has blocked the possibility of including this feature in pre-applications due to regulatory concerns.

However, Canary Capital's recent proposal introduces staking as an additional source of yield. This initiative would allow investors to simultaneously benefit from TRX's price movements and the rewards generated by staking within the TRON protocol.

If it receives regulatory approval, this financial product plans to manage the actual TRX tokens in custody through regulated entities to provide investors with the necessary security guarantee. Staking, which operates under a DPoS (Delegated Proof of Stake) model on the Tron network, involves delegating tokens to participate in block validation and generation, receiving rewards in return that can increase the investor's total return. Therefore, incorporating this feature into an ETF is innovative and represents an evolution in the management of crypto-asset-based financial products.

The regulatory debate over ETF staking in the US

The integration of staking into exchange-traded funds faces a complex regulatory framework in the United States. The SEC, which is seeking greater clarity for the digital asset industry, remains cautious due to concerns related to the structure of staking as a financial service, settlement times that could disrupt traditional standards, and, in general, the complexity of the tax treatment of rewards earned through this mechanism. These concerns have led previous proposals for Ethereum ETFs, for example, to remove staking features during their regulatory review process.

In parallel with Canary Capital's request, representatives from the crypto sector have sought dialogue with the SEC. For example, at a meeting with the Crypto Task Force in February, models were presented to mitigate regulatory concerns, including the use of third-party staking services and the potential issuance of liquid tokens derived from staking.

Furthermore, members of the U.S. Senate, such as Cynthia Lummis, have asked the SEC for regulatory clarity to avoid competitive disadvantages compared to other markets, especially given that countries like Canada are moving toward accepting similar products.

Despite the expectations and regulatory changes underway under the Donald Trump administration, the SEC has postponed key decisions on the inclusion of staking in ETFs, awaiting resolutions by mid-2025. Amid this reality, Canary Capital's proposal is at a critical juncture that could set a precedent for future approvals.

The US could redefine global crypto regulation.

US regulation has a profound impact on the global crypto market due to the weight of its financial market and its regulatory influence. The eventual approval of a Tron staking ETF in the country could trigger a wave of confidence and new similar products, driving institutional adoption of TRX and other related assets. Furthermore, a standard for integrating yield-generating mechanisms into crypto ETFs would be promoted, boosting innovation in digital financial management.

On the other hand, the delay in regulation could also cause investors and companies to seek more open markets, such as Canada, where ETFs with staking capabilities are already being explored, or Europe, where crypto regulation is moving toward greater clarity and flexibility. This makes Canary Capital's initiative a focal point in the fight for competitiveness and innovation in blockchain-based financial products.

In conclusion, the firm's proposal represents a momentous shift in how cryptocurrencies like Tron can be integrated into traditional financial products, combining price exposure with active yield generation through staking. The outcome of this regulatory process in the United States will be crucial in defining the future of crypto ETFs and the evolution of digital asset investments globally.

Investing in cryptoassets is not fully regulated, may not be suitable for retail investors due to high volatility and there is a risk of losing all invested amounts.