Canary Capital Seeks SEC Approval for Staked CRO ETF Offering

Canary Capital has submitted an application to the SEC for a staked CRO ETF, designed to provide regulated exposure to Crypto.com’s CRO token. The ETF will track CRO’s price and earn yield by staking assets on the Cronos blockchain. This offering aims to make crypto investing easier while avoiding direct ownership, and it steers clear of complex financial instruments, appealing to risk-averse investors.

Canary Capital Group LLC is making headlines with its recent application to the U.S. Securities and Exchange Commission (SEC) for a new financial product—a staked CRO ETF aimed to offer regulated exposure to Crypto.com’s native token, CRO, without requiring investors to directly own the cryptocurrency. This move is part of a wider effort to make crypto investing more accessible and framed within traditional financial structures.

The proposed Canary Staked CRO ETF is designed to track the price of CRO, while also generating income through a staking mechanism on the Cronos blockchain. By allocating a portion of the ETF’s assets to staking, the ETF could earn rewards in CRO on top of potential price increases. This dual strategy may attract investors who are keen on diversifying their portfolios with crypto exposure while minimizing risk by steering clear of direct asset management.

As outlined in their filing, the fund will determine its daily net asset value (NAV) by averaging CRO prices from several cryptocurrency exchanges, hoping to create a more accurate market value in a largely fragmented trading scene. However, it’s important to note that this ETF will not have the backing of federal institutions like the FDIC, making it potentially less appealing to some cautious investors.

What’s noteworthy is that this ETF aims to maintain a conservative investment approach; it explicitly avoids using leverage, derivatives, or asset lending. This choice contrasts sharply with the often complex products seen in the crypto market, which can carry significant risk. Canary Capital’s decision could cater to investors who prefer clear-cut investment strategies without heightened exposure to volatility.

This latest filing builds upon Canary Capital’s prior partnership with Crypto.com through the Canary CRO Trust, which intended to create a regulated banking option for U.S. investors interested in CRO. If the ETF receives approval from the SEC, it would symbolize another step towards melding traditional finance with decentralized crypto assets, allowing for a passive investment opportunity while introducing on-chain yield generation.