Canary Capital has submitted a Form S-1 with the US Securities and Exchange Commission (SEC) to introduce a new spot exchange-traded fund (ETF) centered on Tron (TRX).

Presented on April 18, the proposal is unique as it offers investors the chance to track TRX's market performance and receive staking rewards, which distinguishes it from earlier spot crypto ETF concepts.

In this filing, BitGo Trust Company is named the custodian for TRX holdings, and Canary Capital is selected as the fund's sponsor.

Justin Sun, Tron's founder, expressed his support for the initiative, urging US investors to take prompt action. He highlighted TRX's potential for long-term growth and anticipated a surge in institutional interest if the ETF is sanctioned.

TRX is currently ranked as the ninth-largest cryptocurrency by market capitalization, valued at around $22.94 billion. Tron's blockchain has gained significant traction in stablecoin settlements, notably ranking second after Ethereum in this area. Its efficient processing of rapid and cost-effective transactions has made it a preferred platform for Tether's USDT, data from DeFiLlama confirms.

Although the proposed TRX ETF has created excitement, doubts linger about its regulatory approval prospects. Integrating staking within the ETF is a bold move, considering the SEC's historical resistance to such features in other crypto funds.

Staking services within investment products have raised concerns of being unregistered securities, prompting increased regulatory scrutiny. Prior Ethereum ETF proposals had to omit staking elements to conform to regulatory standards.

Despite these challenges, firms like Grayscale are pushing for altcoin ETFs that incorporate staking or offer broader asset exposure. The potential approval of Canary Capital's ETF for TRX would signify a significant milestone by combining TRX exposure with staking benefits, appealing to both retail and institutional investors seeking yield alongside market performance.