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

Chunk 29 of 59
Word Count: 1282
Character Count: 8063

Document Content:

liability, impairing the ability of the Trust to recover losses relating to the calculation of the Pricing Benchmark. The value of the Shares will be adversely affected if the Trust is required to indemnify the Sponsor, the Trustee, the Transfer Agent or the TRX Custodian. Each of the Sponsor, the Trustee, the Transfer Agent and the TRX Custodian has a right to be indemnified by the Trust for certain liabilities or expenses that it incurs without gross negligence, bad faith or willful misconduct on its part. Therefore, the Sponsor, Trustee, Transfer Agent or the TRX Custodian may require that the assets of the Trust be sold in order to cover losses or liability suffered by it. Any sale of that kind would reduce the TRX holdings of the Trust and the value of the Shares. Intellectual property rights claims may adversely affect the Trust and the value of the Shares.

The
Sponsor is not aware of any intellectual property rights claims that may prevent the Trust from operating and holding TRX. However,
third parties may assert intellectual property rights claims relating to the operation of the Trust and the mechanics instituted for
the investment in, holding of and transfer of TRX. Regardless of the merit of an intellectual property or other legal action, any
legal expenses to defend or payments to settle such claims would be Extraordinary Expenses that would be borne by the Trust through
the sale or transfer of its TRX and any threatened action that reduces confidence in
long-term viability or the ability of end-users to hold and transfer TRX may adversely affect the value of the Shares. Additionally,
a meritorious intellectual property rights claim could prevent the Trust from operating and force the Sponsor to terminate the Trust
and liquidate its TRX. As a result, an intellectual property rights claim against the Trust could adversely affect the value of the
Shares.

Unforeseeable
risks.

TRX
has gained commercial acceptance only within recent years and, as a result, there is little data on its long-term investment potential.
Additionally, due to the rapidly evolving nature of the TRX market, including advancements in the underlying technology, changes to TRX
may expose investors in the Trust to additional risks which are impossible to predict.

The
Sponsor’s policies and procedures may not fully mitigate the risk of conflicts of interest.

The
Sponsor does not have operating practices that require personnel to pre-clear personal trading activity in which TRX is the referenced
asset. In general, pre-clearance policies prohibit employees and agents from engaging in certain personal trading activity without first
obtaining pre-clearance of the transaction from the firm’s chief compliance officer, chief financial officer, or some senior officer
with similar responsibilities.

Without
implementing pre-clearance requirements, the Sponsor may not be able to fully mitigate the risk of conflicts of interest or avoid the
appearance of impropriety in connection with the purchase and sale of TRX. There is no guarantee that every employee, officer, director,
or similar person associated with the Sponsor, or its affiliates will refrain from engaging in insider trading in violation of their duties
to the Trust and Sponsor.

This
risk is present in traditional financial markets and is not unique to TRX. If such employees or others affiliated with the Sponsor engage
in illegal conduct or conduct which fails to meet applicable regulatory standards, the Sponsor and its affiliates could be the target
of civil or criminal fines, penalties, punishments, or other regulatory sanctions or lawsuits or could be the target of an investigation.
Any of these outcomes could cause the Trust and Shareholders to suffer harm.

The
Sponsor and its affiliates may also participate in transactions related to TRX, either for their own account (subject to certain internal
employee trading operating practices) or for the account of others, such as clients, and such transactions may occur prior to, during,
or after the commencement of this offering. Such transactions may not serve to benefit the Shareholders of the Trust and may have a positive
or negative effect on the value of the TRX held by the Trust and, consequently, on the market value of TRX.

Potential
conflicts of interest may arise among the Sponsor or its affiliates and the Trust. The Sponsor and its affiliates have no fiduciary duties
to the Trust and its Shareholders other than as provided in the Trust Agreement, which may permit them to favor their own interests to
the detriment of the Trust and its Shareholders.

The Sponsor will
manage the affairs of the Trust. Conflicts of interest may arise among the Sponsor and its affiliates, on the one hand, and the Trust
and its Shareholders, on the other hand. As a result of these conflicts, the Sponsor may favor its own interests and the interests of
its affiliates over the Trust and its Shareholders. These potential conflicts include, among others, the following:

●	the Sponsor has no fiduciary duties to, and is allowed to take into account the
interests of parties other than, the Trust and its Shareholders in resolving conflicts of interest, provided the Sponsor does not act
in bad faith;

●	the Trust has agreed to indemnify the Sponsor, the Trustee and their respective
affiliates pursuant to the Trust Agreement;

●	the Sponsor is responsible for allocating its own limited resources among different
clients and potential future business ventures, to each of which it may owe fiduciary duties;

●	the Sponsor and its staff also service affiliates of the Sponsor, and may also service
other digital asset investment vehicles, and their respective clients and cannot devote all of its, or their, respective time or resources
to the management of the affairs of the Trust;

●	the Sponsor, its affiliates and their officers and employees are not prohibited
from engaging in other businesses or activities, including those that might be in direct competition with the Trust;

●	affiliates of the Sponsor may start to have substantial direct investments in TRX ,
or other digital assets or companies in the digital assets ecosystem that they are permitted to manage taking into account their own interests
without regard to the interests of the Trust or its Shareholders, and any increases, decreases or other changes in such investments could
affect the Pricing Benchmark price and, in turn, the value of the Shares; and

●	the Sponsor decides whether to retain separate counsel, accountants or others to
perform services for the Trust.

By purchasing the
Shares, Shareholders agree and consent to the provisions set forth in the Trust Agreement.

Risks Associated with the Pricing
Benchmark

The
Pricing Benchmark has a limited history.

The Pricing Benchmark
was launched on ________. The Pricing Benchmark has a limited history and its value is an average composite reference rate calculated
using volume-weighted trading price data from the Constituent Platforms. A longer history of actual performance through various economic
and market conditions would provide greater and more reliable information for an investor to assess Pricing Benchmark’s performance.
The Benchmark Provider has substantial discretion at any time to change the methodology used to calculate the Pricing Benchmark, including
the Constituent Platforms that contribute prices to the Trust’s NAV. The Benchmark Provider does not have any obligation to take
into consideration the needs of the Trust, the Shareholders, or anyone else in connection with such changes. There is no guarantee that
the methodology currently used in calculating the Pricing Benchmark will appropriately track the price of TRX in the future. The Benchmark
Provider does not have any obligation to take into consideration the needs of the Trust or the Shareholders in determining, composing,
or calculating the Pricing Benchmark or in the selection of the Constituent Platforms used. The Constituent Platforms are chosen by the
Benchmark Provider.