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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affiliates have entered insolvency, liquidation, or similar proceedings around the globe. The U.S. Department of Justice brought criminal fraud and other charges, and the SEC and CFTC brought civil securities and commodities fraud charges, against certain of FTX’s and its affiliates’ senior executives, including its former CEO. Around the same time, there were reports that approximately $300-600 million of digital assets were removed from FTX and the full facts remain unknown, including whether such removal was the result of a hack, theft, insider activity, or other improper behavior. The potential consequences of a digital asset trading platform failure or failure to prevent market manipulation could adversely affect the value of the Shares. Manipulative trading or market abuse could create artificial or distorted prices, cause a loss of investor confidence in TRX, adversely impact pricing trends in TRX markets broadly, and cause losses from an investment in Shares of the Trust.

In addition, negative
perception, a lack of stability and standardized regulation in the digital asset markets and the closure or temporary shutdown of digital
asset trading platforms due to fraud, business failure, security breaches or government mandated regulation, and associated losses by
customers, may reduce confidence in the Tron Network and result in greater volatility or decreases in the prices of TRX. Furthermore,
the closure or temporary shutdown of a digital asset exchange used in calculating the Index may result in a loss of confidence in the
Trust’s ability to determine its NAV on a daily basis. The potential consequences of a digital asset exchange’s failure could
adversely affect the value of the Shares.

TRX Trading
Platforms May Be Exposed To Front-Running

TRX trading platforms
on which TRX trades may be susceptible to “front-running,” which refers to the process when someone uses access to confidential
information, or technology or market advantage to get prior knowledge of upcoming transactions. Front-running is a frequent activity on
centralized as well as decentralized exchanges. By using bots functioning on a millisecond-scale timeframe, bad actors are able to take
advantage of the forthcoming price movement and make economic gains at the cost of those who had introduced these transactions. The objective
of a front runner is to buy a chunk of tokens at a low price and later sell them at a higher price while simultaneously exiting the position.
Front-running can occur via manipulation of transaction validation and mining processes, or the theft or misappropriation of confidential
information by insiders. To extent that front-running occurs in TRX markets, it may result in concerns as to the price integrity of digital
asset exchanges and digital assets more generally.

TRX Trading
Platforms May Be Exposed To Wash Trading

TRX trading platforms
on which TRX trades may be susceptible to wash trading. Wash trading occurs when offsetting trades are entered into for other than bona
fide reasons, such as the desire to inflate reported trading volumes. Wash trading may be motivated by non-economic reasons, such as a
desire for increased visibility on popular websites that monitor markets for digital assets so as to improve their attractiveness to investors
who look for maximum liquidity, or it may be motivated by the ability to attract listing fees from token issuers who seek the most liquid
and high-volume exchanges on which to list their coins. Results of wash trading may include unexpected obstacles to trade and erroneous
investment decisions based on false information. Even in the United States, there have been allegations of wash trading even on regulated
venues. Any actual or perceived false trading in the global digital asset trading market, and any other fraudulent or manipulative acts
and practices, could adversely affect the value of TRX and/or negatively affect the market perception of TRX. If they were to affect trading
at a trading platform which is used to calculate the Pricing Benchmark, they could cause the Trust’s NAV to be calculated incorrectly
and cause Shareholders to suffer losses.

To the extent that
wash trading either occurs or appears to occur in TRX trading platforms on which TRX trades, investors may develop negative perceptions
about TRX and the digital assets industry more broadly, which could adversely impact the price of TRX and, therefore, the price of Shares.
Wash trading also may place more legitimate digital asset trading platforms at a relative competitive disadvantage.

Competition
From Central Bank Digital Currencies And Emerging Payments Initiatives Involving Financial Institutions Could Adversely Affect The Value
Of TRX And Other Digital Assets.

Central banks in
various countries have introduced digital forms of legal tender (“CBDCs”). Whether or not they incorporate blockchain or similar
technology, CBDCs, as legal tender in the issuing jurisdiction, could have an advantage in competing with, or replace, TRX and other cryptocurrencies
as a medium of exchange or store of value. Central banks and other governmental entities have also announced cooperative initiatives and
consortia with private sector entities, with the goal of leveraging blockchain and other technology to reduce friction in cross-border
and interbank payments and settlement, and commercial banks and other financial institutions have also recently announced a number of
initiatives of their own to incorporate new technologies, including blockchain and similar technologies, into their payments and settlement
activities, which could compete with, or reduce the demand for, TRX. As a result of any of the foregoing factors, the value of TRX could
decrease, which could adversely affect an investment in the Trust.

Prices Of
TRX May Be Affected Due To Stablecoins (Including Tether And US Dollar Coin (“USDC”)), The Activities Of Stablecoin Issuers
And Their Regulatory Treatment.

While the Trust
does not invest in and will not hold stablecoins, it may nonetheless be exposed to risks that stablecoins pose for the TRX market and
other digital asset markets. Stablecoins are digital assets designed to have a stable value over time as compared to typically volatile
digital assets, and are typically marketed as being pegged to a fiat currency, such as the U.S. dollar, at a certain value. Although the
prices of stablecoins are intended to be stable, their market value may fluctuate. This volatility has in the past apparently impacted
the price of TRX. Stablecoins are a relatively new phenomenon, and it is impossible to know all of the risks that they could pose to participants
in the TRX market. In addition, some have argued that some stablecoins, particularly Tether, are improperly issued without sufficient
backing in a way that, when the stablecoin is used to pay for TRX, could cause artificial rather than genuine demand for TRX, artificially
inflating the price of TRX, and also argue that those associated with certain stablecoins may be involved in laundering money. On February
17, 2021 the New York Attorney General entered into an agreement with Tether’s operators, including Bitfinex, requiring them to
cease any further trading activity with New York persons and pay $18.5 million in penalties for false and misleading statements made regarding
the assets backing Tether. On October 15, 2021, the CFTC announced a settlement with Tether’s operators, Tether Holdings Limited,
Tether Operations Limited, Tether Limited, and Tether International Limited, in which they agreed to pay $42.5 million in fines to settle
charges that, among others, Tether’s claims that it maintained sufficient U.S. dollar reserves to back every Tether stablecoin in
circulation with the “equivalent amount of corresponding fiat currency” held by Tether were untrue.

Bitfinex also agreed
to pay the CFTC a $1.5 million fine to settle charges that Bitfinex offered off-exchange leveraged, margined, or financed transactions
involving cryptocurrencies with U.S. customers who were not eligible contract participants and accepted funds (including in the form of
Tether stablecoins) and orders in connection with such illegal off-exchange transactions, triggering an obligation to register with the
CFTC, which the CFTC order asserts it violated. The CFTC previously fined Bitfinex in 2016 on similar charges.

USDC is a reserve-backed
stablecoin issued by Circle Internet Financial that is commonly used as a method of payment in digital asset markets. While USDC is designed
to maintain a stable value at 1U.S. dollar at all times, on March 10, 2023, the value of USDC fell below $1.00 for multiple days after
Circle Internet Financial disclosed that US $3.3 billion of the USDC reserves were held at Silicon Valley Bank, which had entered Federal
Deposit Insurance Corporation (“FDIC”) receivership earlier that day. Stablecoins are reliant on the U.S. banking system and
U.S. treasuries, and the failure of either to function normally could impede the function of stablecoins, and therefore could adversely
affect the value of the Shares.