SEC Filing Document

Company: Canary Staked TRX ETF
Ticker: 
CIK: 2064768
Filing Type: S-1
Document Type: S-1
Date Filed: 2025-04-18
Accession Number: 0001999371-25-004423
Exchange: 
SIC Code: 6221
SIC Description: Commodity Contracts Brokers & Dealers
URL: https://www.sec.gov/Archives/edgar/data/2064768/000199937125004423/canary-s1_041825.htm

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prevent TRX Trading Counterparties from depositing or withdrawing TRX from their custody accounts, which in turn could affect the creation or redemption of Baskets. If this is the case, the liquidity of the Shares may decline and the price of the Shares may fluctuate independently of the price of TRX and may fall or otherwise diverge from NAV. Furthermore, in the event that the market for TRX should become relatively illiquid and thereby materially restrict opportunities for arbitraging by delivering TRX in return for Baskets, the price of Shares may diverge from the price of TRX. The use of cash creations and redemptions, as opposed to in-kind creations and redemptions, may adversely affect the arbitrage transactions by Authorized Participants intended to keep the price of the Shares closely linked to the price of TRX and, as a result, the price of the Shares may fall or otherwise diverge from NAV.

The
use of cash creations and redemptions, as opposed to in-kind creations and redemptions, could cause delays in trade execution due to potential
operational issues arising from implementing a cash creation and redemption model, which involves more complex operational steps (and
therefore execution risk) than the originally contemplated in-kind creation and redemption models. Such delays could cause the execution
price associated with such trades to materially deviate from the Pricing Benchmark price used to determine the NAV. Even though the Authorized
Participant is responsible for the dollar cost of such difference in prices, Authorized Participants could default on their obligations
to the Trust, or such potential risks and costs could lead Authorized Participants, who would otherwise be willing to purchase or redeem
Baskets to take advantage of any arbitrage opportunity arising from discrepancies between the price of the Shares and the price of the
underlying TRX, to elect to not participate in the Trust’s Share creation and redemption processes. This may adversely affect the
arbitrage mechanism intended to keep the price of the Shares closely linked to the price of TRX, and as a result, the price of the Shares
may fall or otherwise diverge from NAV. If the arbitrage mechanism is not effective, purchases or sales of Shares on the secondary market
could occur at a premium or discount to NAV, which could harm Shareholders by causing them to buy Shares at a price higher than the value
of the underlying TRX held by the Trust or sell Shares at a price lower than the value of the underlying TRX held by the Trust, causing
Shareholders to suffer losses.

The
Authorized Participants serve in such capacity for several competing exchange-traded TRX products, which could adversely affect the Trust’s
operations and the secondary market for the Shares.

Only
an Authorized Participant may engage in creation or redemption transactions directly with the Trust. Some or all of the Trust’s
Authorized Participants are expected to serve as authorized participants or market makers for one or more exchange-traded TRX products
that compete with the Trust. This may make it more difficult to engage or retain Authorized Participants for the Trust. Furthermore, because
there is no obligation on the part of the Authorized Participants to engage in creation and redemption or market making activities with
respect to the Trust’s Shares, decisions by the Authorized Participants to not engage with the Trust or its Shares may result in
a decline in the liquidity of the Shares and the price of the Shares may fluctuate independently of the price of Trust’s TRX (i.e.,
at a greater premium or discount to the Trust’s NAV).

Security
threats and cyber-attacks could result in the halting of Trust operations and a loss of Trust assets or damage to the reputation of the
Trust, each of which could result in a reduction in the price of the Shares.

Security
breaches, cyber-attacks, computer malware and computer hacking attacks have been a prevalent concern in relation to digital assets. Multiple
thefts of TRX and other digital assets from other holders have occurred in the past. Because of the pseudonymous nature of the
Tron Network, thefts can be difficult to trace, which may make TRX a particularly attractive target for theft.
Cyber security failures or breaches of one or more of the Trust’s service providers (including, but not limited to, the Benchmark
Provider, the Transfer Agent, the Distributor, the Administrator, or the TRX Custodian) have the ability to cause disruptions and impact
business operations, potentially resulting in financial losses, violations of applicable privacy and other laws, regulatory fines, penalties,
reputational damage, reimbursement or other compensation costs, and/or additional compliance costs.

The
Trust and its service providers’ use of internet, technology and information systems (including mobile devices and cloud-based service
offerings) may expose the Trust to potential risks linked to cyber-security breaches of those technological or information systems. The
Sponsor believes that the Trust’s TRX held in the Trust’s account with the TRX Custodian will be an appealing target to hackers
or malware distributors seeking to destroy, damage or steal the Trust’s TRX or private keys and will only become more appealing
as the Trust’s assets grow. While the Trust, the Sponsor and the TRX Custodian have implemented procedures to identify and or stop
new security threats and expect to adapt to technological changes in the digital asset industry, to the extent such efforts are unsuccessful
the Trust’s TRX may be subject to theft, loss, destruction or other attack.

Additionally,
access to the Trust’s TRX could be restricted by natural events (such as an earthquake or flood) or human actions (such as a terrorist
attack). The Sponsor has evaluated the security procedures in place for safeguarding the Trust’s TRX. Nevertheless, the security
procedures cannot guarantee the prevention of any loss due to a security breach, software defect or act of God that may be borne by the
Trust.

The
security procedures and operational infrastructure may be breached due to the actions of outside parties, error or malfeasance of an employee
of the Sponsor, the TRX Custodian, or otherwise, and, as a result, an unauthorized party may obtain access to the Trust’s account
with the TRX Custodian, the private keys (and therefore TRX) or other data of the Trust. Additionally, outside parties may attempt to
fraudulently induce employees of the Sponsor, the TRX Custodian, or the Trust’s other service providers to disclose sensitive information
in order to gain access to the Trust’s infrastructure. As the techniques used to obtain unauthorized access, disable or degrade
service, or sabotage systems change frequently, or may be designed to remain dormant until a predetermined event and often are not recognized
until launched against a target, the Sponsor and the TRX Custodian may be unable to anticipate these techniques or implement adequate
preventative measures.

actual or perceived breach of the Trust’s account with the TRX Custodian could harm the Trust’s operations, result in partial
or total loss of the Trust’s assets, damage the Trust’s reputation and negatively affect the market perception of the effectiveness
of the Trust, all of which could in turn reduce demand for the Shares, resulting in a reduction in the price of the Shares. The Trust
may also cease operations, the occurrence of which could similarly result in a reduction in the price of the Shares.

While
the Sponsor and the Trust’s service providers have established business continuity plans and systems that they respectively believe
are reasonably designed to prevent cyber-attacks, there are inherent limitations in such plans and systems including the possibility that
certain risks have not been, or cannot be, identified. Service providers may have limited indemnification obligations to the Trust, which
could be negatively impacted as a result, see “Liability and Indemnification” and “Material Contracts”
below.

the Trust’s holdings of TRX are lost, stolen or destroyed under circumstances rendering a party liable to the Trust, the responsible
party may not have the financial resources sufficient to satisfy the Trust’s claim. For example, as to a particular event of loss,
the only source of recovery for the Trust may be limited to the relevant custodian or, to the extent identifiable, other responsible third
parties (for example, a thief or terrorist), any of which may not have the financial resources (including liability insurance coverage)
to satisfy a valid claim of the Trust. Similarly, as noted below, the Trust’s Custodian has limited liability to the Trust, which
could adversely affect the Trust’s ability to seek recovery from them, even when the TRX Custodian’s actions or failure to
act are the cause of the Trust’s loss.

may not be possible, either because of a lack of available policies or because of prohibitive cost, for the Trust to obtain insurance
that would cover losses of the Trust’s TRX. If an uninsured loss occurs or a loss exceeds policy limits, the Trust could lose all
of its assets.

The
Trust’s risk management processes and policies may prove to not be adequate to prevent any loss of the Trust’s TRX.