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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including, but not limited to, the Sponsor’s beliefs regarding expectations of the core developers of TRX, users, service providers, businesses, miners and other constituencies, as well as the actual continued acceptance of, mining power on, and community engagement with, the Tron Network. There is no guarantee that the Sponsor will choose the digital asset that is ultimately the most valuable fork, and the Sponsor’s decision may adversely affect the value of the Shares as a result. The Sponsor may also disagree with Shareholders and security vendors on what is generally accepted as TRX and should therefore be considered “TRX” for the Trust’s purposes, which may also adversely affect the value of the Shares as a result. Any Name Change And Any Associated Rebranding Initiative Of TRX May Not Be Favorably Received By The Digital Asset Community, Which Could Negatively Impact The Value Of TRX And The Value Of The Shares.

From
time to time, digital assets may undergo name changes and associated rebranding initiatives. For example, Bitcoin Cash may sometimes be
referred to as Bitcoin ABC in an effort to differentiate itself from any Bitcoin Cash hard forks, such as Bitcoin Satoshi’s Vision,
and in the third quarter of 2018, the team behind ZEN rebranded and changed the name of ZenCash to “Horizen.” We cannot predict
the impact of any name change and any associated rebranding initiative on TRX. After a name change and an associated rebranding initiative,
a digital asset may not be able to achieve or maintain brand name recognition or status that is comparable to the recognition and status
previously enjoyed by such digital asset. The failure of any name change and any associated rebranding initiative by a digital asset may
result in such digital asset not realizing some or all of the anticipated benefits contemplated by the name change and associated rebranding
initiative, and could negatively impact the value of TRX and the value of the Shares.

The
TRX Blockchain Could Be Vulnerable To Attacks on Transaction Finality and Consensus Processes, Which Could Adversely Affect An Investment
In The Trust Or The Ability Of The Trust To Operate.

The
Tron Network is currently vulnerable to several types of attacks, including:

●	“33% attack” where, if a validator or group of validators were to gain
control of more than 33% of the total staked TRX on the Tron Network, a malicious actor could temporarily impede or delay block confirmation.

●	“>66% attack” where, if a validator or group of validators acting
in concert were to gain control of more than 66% of the total staked TRX on the Tron Network, a malicious actor could permanently and
irreversibly manipulate the blockchain, including censorship, double-spending and fraudulent block propagation, both on a forward-and
backward-looking basis. The attacker could unilaterally finalize their preferred chain without the votes of any other stakers, and could
also reverse past finalized blocks.

a malicious actor, group or botnet (a volunteer or hacked collection of computers controlled by networked software coordinating the
actions of the computers) obtains certain percentages of the validating power dedicated to validation on the Tron Network is
controlled by a bad actor (a “>66% attack”), it may be able to alter the TRX Blockchain on which the Tron Network and
TRX transactions rely. The Tron Network’s proof-of-stake consensus mechanism requires a 2/3 supermajority of validators who
have staked TRX to vote in favor in order to finalize transactions and add blocks to the TRX Blockchain. If the bad actor were to
obtain 2/3 of the total TRX staked in validation processes, it is widely believed that the bad actor could construct fraudulent
blocks, “double-spend” its own TRX (i.e., spend the same TRX in more than one transaction), or censor other users’
transactions by preventing them from being confirmed while continuing to validate and confirm its own transactions and earn the
associated block reward, thereby enriching itself while also entrenching its own control of the TRX Blockchain. If the bad actor
were to obtain 1/3 of the total TRX staked in validation processes, the bad actor could prevent certain transactions from completing
in a timely manner, or at all, and prevent the confirmation of other users’ transactions, though this would likely be
temporary (since it would likely be penalized for inactivity leakage, resulting in the bad actor’s staked TRX being slashed,
as defined below) and it likely could not double spend or propagate fraudulent blocks without the 66% supermajority of staked
assets. With control of the respective threshold of total staked assets on the Tron Network, it could be possible for the malicious
actor to control, exclude or modify the ordering of transactions on the TRX Blockchain and prevent the confirmation of other
users’ transactions, while continuing to receive rewards of new TRX and confirm its own blocks, for so long as it maintained
control. To the extent that such malicious actor or botnet did not yield its control of the validating power on the Tron Network or
the TRX community did not reject the fraudulent blocks as malicious or to the extent that such bad actor did not yield its control
of processing power, reversing any changes made to the TRX Blockchain may be difficult or impossible. Further, a malicious actor or
botnet could create a flood of transactions in order to slow down the Tron Network.

For
example, in August 2020, the Ethereum Classic network was the target of two double-spend attacks by an unknown actor or actors that gained
more than 50% of the processing power of the Ethereum Classic network. The attacks resulted in reorganizations of the Ethereum Classic
blockchain that allowed the attacker or attackers to reverse previously recorded transactions in excess of $5.0 million and $1.0 million.
Any similar attacks on the Tron Network could negatively impact the value of TRX and the value of the Shares.

addition, in May 2019, the Bitcoin Cash network experienced a 51% attack when two large mining pools reversed a series of transactions
in order to stop an unknown miner from taking advantage of a flaw in a recent Bitcoin Cash protocol upgrade. Although this particular
attack was arguably benevolent, the fact that such coordinated activity was able to occur may negatively impact perceptions of the Bitcoin
Cash network. Although the two attacks described above took place on proof-of-work-based networks, it is possible that a similar attack
may occur on the Tron Network, which could negatively impact the value of TRX and the value of the Shares.

Although
there are no known reports of malicious control of the Tron Network, if groups of coordinating or connected TRX holders that together
have more than 66% of outstanding TRX, were to stake that TRX and run validators, they could exert authority over the validation of TRX
transactions. This risk is heightened if over 66% of the validating power on the network falls within the jurisdiction of a single governmental
authority. If network participants, including the core developers and the administrators of validating pools, do not act to ensure greater
decentralization of TRX, the feasibility of a malicious actor obtaining control of the validating power on the Tron Network will increase,
which may adversely affect the value TRX and the value of the Shares.

malicious actor may also obtain control over the Tron Network through its influence over core developers by gaining direct control over
a core developer or an otherwise influential programmer. To the extent that users and miners accept amendments to the source code proposed
by the controlled core developer, other core developers do not counter such amendments, and such amendments enable the malicious exploitation
of the Tron Network, the risk that a malicious actor may be able to obtain control of the Tron Network in this manner exists. Moreover,
it is possible that a group of TRX holders that together control more than 66% of outstanding TRX are in fact part of the initial or core
developer group, or are otherwise influential members of the TRX community. To the extent that the initial or existing core developer
groups also control more than the relevant thresholds of outstanding TRX, as some believe, the risk of and arising from this particular
group of users obtaining control of the validating power on the Tron Network will be even greater, and should this materialize, it may
adversely affect the value of the Shares.

Validators Exit The Tron Network, It Could Increase The Likelihood Of A Malicious Actor Obtaining Control.

Validators
exiting the network could make the Tron Network more vulnerable to a malicious actor obtaining control of a large percentage of staked
TRX, which might enable them to manipulate the TRX Blockchain by censoring or manipulating specific transactions, as discussed previously.
If the TRX Blockchain suffers such an attack, the price of TRX could be negatively affected, and a loss of confidence in the Tron Network
could result. Any reduction in confidence in the transaction confirmation process or staking power of the Tron Network may adversely affect
an investment in the Trust.