TRON Could Make ETF History as Canary Capital Proposes Staking Enabled Fund

In a bold move that could test the SEC’s stance on staking in crypto investment products, Canary Capital has filed for a spot TRON (TRX) ETF the first of its kind to offer exposure to the token’s market performance while also distributing staking rewards.

The filing, submitted to the U.S. Securities and Exchange Commission (SEC) on April 18, proposes a new kind of investment vehicle that blends the appeal of passive crypto exposure with the added incentive of yield. If approved, it could be a turning point for how crypto ETFs are structured in the U.S.

A First for TRON  and for Staking ETFs

According to the Form S-1 registration, BitGo Trust Company is set to act as the custodian for the fund, while Canary Capital will serve as the sponsor. The proposal is a first for TRX, which is currently the ninth-largest cryptocurrency by market cap, valued at approximately $22.94 billion.

What makes this ETF proposal especially unique is its inclusion of staking rewards. In most previous ETF filings, staking was either avoided altogether or stripped out after pushback from regulators. Canary Capital’s move signals a willingness to challenge that status quo.

Justin Sun Sounds Off

TRON founder Justin Sun was quick to weigh in on the filing. In a post on X, he urged investors not to wait.

“US VCs should start buying TRX  and fast. Don’t wait until it’s too late. TRX is a price that only moves one way: up,” Sun said.

While some in the crypto community welcomed the enthusiasm, others were more skeptical, noting the SEC’s long history of rejecting or delaying ETF products with staking components.

Staking: A Red Flag for Regulators?

Staking has been a hot-button issue for U.S. regulators, particularly under the SEC. The agency has repeatedly flagged staking within investment products as a possible form of unregistered securities offering. This has led several Ethereum ETF applicants to remove staking rewards from their proposals entirely.

Given this backdrop, Canary’s TRX ETF filing is being seen as a test case for how far the SEC is willing to go in softening its stance under new leadership.

TRON’s Growing Ecosystem

Despite the regulatory uncertainty, TRON continues to gain ground  especially in the stablecoin sector. It ranks second only to Ethereum for stablecoin settlement volume, largely due to its fast transaction speeds and low fees. According to DeFiLlama, USDT on TRON makes up a significant portion of Tether’s total supply.

This strong on-chain utility could boost the case for TRX as a viable ETF asset, particularly if investors are looking for exposure to real blockchain usage not just speculation.

Will It Get Approved?

That remains the big question. While Canary Capital’s ETF has generated buzz, it faces an uphill battle. The SEC has not approved any crypto ETF with staking rewards to date, and TRON’s past controversies — including scrutiny over alleged illicit usage and Justin Sun’s legal issues may weigh on the agency’s decision.

Still, if approved, the ETF would represent a historic first for the industry, potentially opening the door for more staking-based products in the U.S. market.