Cboe seeks approval to introduce the first U.S. spot Tron ETF with staking benefits.

Cboe BZX Exchange has submitted a proposed rule change to the Securities and Exchange Commission aimed at listing and trading shares of the Canary Staked TRX ETF under Rule 14.11(e)(4). This marks a significant step as it represents the first attempt to establish a US-based spot Tron ETF that offers staking rewards.

The proposal, filed on May 12, seeks approval to list Commodity-Based Trust Shares that represent fractional interests in a trust holding TRX, which is the native cryptocurrency of the Tron blockchain.

The ETF, backed by Canary Capital, intends to stake a portion—potentially all—of its TRX assets through trusted providers. The staking rewards generated will directly contribute to funding the net asset value (NAV) of the ETF.

According to the fund’s S-1 document submitted on April 18, this arrangement allows investors to be exposed to TRX’s spot price while also earning yields from the network’s delegated proof-of-stake mechanism. The current staking yield for TRX is approximately 4.6% APR, based on data from StakingRewards.

The ETF aims to follow the CoinDesk TRX USD CCIX 60-minute New York Rate, which aggregates TRX spot trades across prominent platforms and updates every 15 seconds. With this index, the net asset value will be calculated each day at 4 P.M. ET.

Shares will be issued and redeemed in 10,000-share baskets and will only involve cash transactions, with BitGo serving as the custodian. All staking activities will occur at the trust level, ensuring that authorized participants do not have direct exposure to TRX or rights over staking delegation.

Cboe argues that the proposed ETF does not necessitate a surveillance-sharing agreement with a “regulated market of significant size,” a requirement introduced in the SEC’s 2018 ruling regarding the Winklevoss proposal.

Instead, it references recent approvals by the SEC for spot Bitcoin and Ethereum products. In those cases, the futures market size was considered inadequate, but alternative methods for detecting and mitigating manipulation were accepted. Cboe maintains that similar reasoning is applicable in this instance, highlighting TRX’s decentralized market, substantial liquidity, continuous global trading, and abundant arbitrage activities.

The proposal elaborates on how TRX’s constant trading, the absence of centralized pricing, and the lack of corporate data disclosures minimize the chance of market manipulation. It points out that any efforts to sway prices on a single platform would require extensive global market disruptions, which would be mitigated by arbitrage mechanisms.

Cboe supports its argument by noting the trust’s cold storage of assets, the availability of intraday indicative values every 15 seconds, and publicly accessible NAV data, indicating that adequate protections for investors are established.

If granted approval, this would be the first instance of a US-listed crypto ETF featuring a native staking component. Unlike Ethereum-based funds approved in 2024, which omitted staking to avoid regulatory complexities, the TRX filing explores the feasibility of integrating delegated proof-of-stake tokens with publicly traded fund structures. Other applications for staking asset-related funds have been postponed until June.

Importantly, the filing does not specify a ticker symbol or particular staking provider but assures that all staking rewards will be reinvested in the trust. Furthermore, the trust does not assert any rights to assets from forks or airdrops.

Cboe’s proposal reflects a broader trend among ETF sponsors to differentiate crypto offerings beyond simple price exposure. As management fees for Bitcoin and Ethereum ETFs trend towards zero, income from staking could serve as a method to mitigate costs and attract capital seeking yield in a low-interest-rate setting.

If approved, the Canary Staked TRX ETF could pave the way for similar staking-enabled ETPs across other delegated PoS networks, including Solana, Polkadot, and Cosmos.

The SEC has not yet provided a timeline for its decision regarding the proposed rule change.