SEC Filing Document

Company: Canary Staked TRX ETF
Ticker: 
CIK: 2064768
Filing Type: S-1/A
Document Type: S-1/A
Date Filed: 2026-05-15
Accession Number: 0001999371-26-010857
Exchange: 
SIC Code: 6221
SIC Description: Commodity Contracts Brokers & Dealers
URL: https://www.sec.gov/Archives/edgar/data/2064768/000199937126010857/canary-s1a_051526.htm

Chunk 2 of 63
Word Count: 1337
Character Count: 8457

Document Content:

in the staking program (the “Staking Program”) administered by the Sponsor, in which staking rewards will be earned through the validation of transactions in the Tron network’s (the “Tron Network”) proof-of-stake (“PoS”) process. In seeking to achieve its investment objectives, the Trust will hold TRX and establish its net asset value (“NAV”) by reference to the CoinDesk TRX USD CCIXber 60m New York Rate (“Pricing Benchmark”). The Trust is a passive investment vehicle that does not seek to generate returns beyond tracking the price of TRX, with staking. The Pricing Benchmark is calculated by CoinDesk Indices (the “Benchmark Provider”) based on a 60-minute time-weighted average price of the TRX-USD CCIXber Reference Rate (the “Underlying Index”), which is an aggregation of executed trade flow of major TRX trading platforms (“Constituent Platforms”). The Trust is sponsored by Canary Capital Group LLC (the “Sponsor”), a wholly owned subsidiary of Canary Capital Group Inc.

The
Trust intends to provide direct exposure to the price of TRX held by the Trust with BitGo Bank & Trust, N.A. (“BitGo”
or the “Custodian”). The Custodian is chartered as a national banking association with the United States Office of
the Comptroller of the Currency to exercise custodial powers on behalf of its customers. While cash held with the Custodian is
insured by the Federal Deposit Insurance Corporation (the “FDIC”), digital assets under custody are not protected by
the FDIC, however, the Custodian carries insurance provided by private insurance carriers, which is shared among all of the Custodian’s
customers and is not specific to the Trust, and may not be sufficient to protect the Trust from all possible losses or sources
of losses. The net assets of the Trust and its Shares are valued on a daily basis with reference to the Pricing Benchmark, a standardized
reference rate published by the Benchmark Provider that is designed to reflect the performance of TRX in U.S. dollars. The Pricing
Benchmark is calculated by the Benchmark Provider based on an aggregation of executed trade flow of major TRX trading platforms.
The Pricing Benchmark is calculated as of 4:00 p.m. Eastern time (“ET”).

The
Sponsor will stake the Trust’s TRX in accordance with the Sponsor’s liquidity risk management policy (the “Liquidity
Risk Management Policy”), which is designed to satisfy the requirements of the Exchange’s listing rules. The Liquidity
Risk Management Policy is designed to ensure that the Trust maintains sufficient liquidity to timely fulfill redemption orders
to preserve the effective and efficient arbitrage mechanism of the Trust. The Liquidity Risk Management Policy assesses sources
of credit, sources of tokens, and other relevant liquidity considerations against the settlement period for any redemption of the
Trust’s shares. The Liquidity Risk Management Policy permits the Trust to maintain credit facilities to help meet redemption
requests, which may include the Sponsor’s own credit facilities to serve as a source of backup liquidity for the Trust. As
of the date of the Prospectus, no such credit facility has been entered into by the Trust. The complete Liquidity Risk Management
Policy is available on the Trust’s website at canaryetfs.com.

TRX
is a digital asset. Like all digital assets, buying, holding and selling TRX is very different from buying, holding and selling more conventional
investments like stocks and bonds. Stocks represent ownership in a company, entitling shareholders to a portion of the company’s
profits. Bonds are debt instruments issued by corporations or governments, where the bondholder is a creditor to the issuer that is generally
entitled to a stream of income payments. Ownership of stocks and bonds is typically recorded through a centralized system managed by brokers,
custodians or clearinghouses. Ownership of TRX does not entitle its holders to any portion of a company’s profits or any stream
of income payments. TRX is a decentralized digital asset and ownership of it is reflected on a decentralized ledger.

The
Trust provides investors with the opportunity to access the market for TRX through a traditional brokerage account without the
potential barriers to entry or risks involved with acquiring and holding TRX directly. The Trust will not use derivatives that
could subject the Trust to additional counterparty and credit risks. The Sponsor believes that the design of the Trust will enable
certain investors to more effectively and efficiently implement strategic and tactical asset allocation strategies that use TRX
by investing in the Shares rather than purchasing, holding, staking, and trading TRX directly.

The
Shareholders of the Trust take no part in the management or control, and have no voice in, the Trust’s operations or business.
Shareholders have very limited voting rights as set forth in the Trust Agreement. However, certain actions, such as amendments
or modifications that appoint a new sponsor (upon the withdrawal, removal or the adjudication or admission of bankruptcy or insolvency
of the Sponsor) require the consent of Shareholders owning a majority (over 50%) of the outstanding Shares of the Trust (not including
Shares held by the Sponsor or its Affiliates).

The
Trust, the Sponsor and the Trust’s service providers will not loan or pledge the Trust’s assets, nor will the Trust’s
assets, which include staked assets, serve as collateral for any loan or similar arrangement.

The
Trust will not utilize leverage, derivatives or any similar arrangements in seeking to meet its investment objectives.

The Staking
Program

The
Sponsor is responsible for administering the Staking Program. Under normal circumstances, the Sponsor will seek to stake all of
the Trust’s TRX through one or more staking providers (each a “Staking Provider”) except for TRX reserved by
the Sponsor in its sole discretion to facilitate foreseeable redemption transactions, pay Trust expenses or otherwise protect the
Trust and its assets. If the rewards from the Staking Program are insufficient to cover the Sponsor Fee and other expenses of the
Trust, the amount of TRX represented by a Share will decline over time because of the transfer of the Trust’s TRX to pay
the Sponsor Fee and other liabilities, regardless of whether the trading prices of the Shares rise or fall. As a result of the
Trust’s participation in the Staking Program, the Trust will receive a portion of the staking rewards generated by the Staking
Program. The Trust is passively managed in that it does not sell TRX at times when its price is high or acquire TRX at low prices
in the expectation of future increases.

The
Sponsor will cause the Trust’s TRX to be staked on the Tron Network through the Custodian that connects to a verified validator
node on the Tron Network maintained by the Staking Provider. As a result of the Trust’s participation in the Staking Program,
the Trust expects to receive certain staking rewards of TRX, which may be treated for federal income tax purposes as income to
the Trust (see “United States Federal Income Tax Consequences” for a further description of the tax implications of
the activities of the Trust to an investor). The Trust itself will not engage in staking activities, including operation of a validator
node. Instead, the Staking Program will be administered by the Sponsor through the utilization of service providers, including
the Custodian and Staking Provider. The Staking Provider exercises no discretion as to the amount the Trust’s TRX to be staked
or timing of the staking activities (other than as is incidental in establishing or deactivating validator nodes). The Custodian
will maintain exclusive possession and control of the private keys associated with any staked TRX at all times.

The
Tron Network utilizes a delegated proof of stake model, which does not impose so-called “slashing” penalties on validators,
however, misbehaving validators may incur penalties such as loss of rewards, but are not subject to any risk loss of staked principal.
Additionally, as part of the “activating” and “exiting” processes of TRX staking, any staked TRX will be
inaccessible for a period of time determined by a range of factors, resulting in certain liquidity risks that the Sponsor will
manage. The description and considerations related to staking are discussed more fully in “Principal Risks—Risks Associated
with TRX and the Tron Network.”