NEXO (nexo) 
Canary Capital has taken a significant step in the cryptocurrency sector by filing an S-1 registration form with the U.S. Securities and Exchange Commission (SEC) to launch the Canary Staked Cronos (CRO) Exchange-Traded Fund (ETF). This move aims to provide investors with a seamless way to gain exposure to Cronos, the native token of Crypto.com, without the need to directly purchase or manage the asset.
What Is the Canary Staked CRO ETF?
The primary objective of the Canary Staked CRO ETF is to track the price of Cronos (CRO) held in custody, while deducting fund-related expenses. A unique feature of this ETF is its staking mechanism. A portion of the CRO holdings will be staked on the Cronos proof-of-stake blockchain, enabling the fund to earn additional CRO rewards. This provides investors with the potential for passive income while maintaining exposure to the asset.
Daily Valuation of CRO
The fund will calculate its net asset value (NAV) on a daily basis. To ensure accuracy, the NAV will be determined using a pricing benchmark that aggregates CRO prices from multiple digital asset exchanges. This method reflects the current market value of Cronos more precisely, offering transparency and reliability for investors.
Secure Custody of CRO Assets
All CRO assets under the ETF will be securely stored by Foris DAX Trust Company, operating as Crypto.com Custody Trust Company. The custody solution offers offline storage and is backed by private insurance, providing protection against theft or loss. It’s important to note that this custody is not insured by the Federal Deposit Insurance Corporation (FDIC), which is typical for cryptocurrency-related financial products.
No Leverage or Derivatives
Unlike some crypto investment products that involve leverage or derivatives, the Canary Staked CRO ETF operates without these financial instruments. Additionally, the fund will not loan its assets, ensuring a straightforward and transparent investment vehicle for those looking to diversify their portfolios with Cronos.
Building on Previous Partnerships
This ETF filing builds upon the strong relationship between Crypto.com and Canary Capital. Earlier, the two companies collaborated to launch the Canary CRO Trust, a product designed to provide qualified U.S. investors with a secure and regulated opportunity to hold CRO. This trust laid the groundwork for the new ETF, underscoring the commitment to creating accessible and regulated crypto investment options.
Furthermore, Crypto.com partnered with another industry leader, 21Shares, to launch a regulated CRO Exchange-Traded Product (ETP) in Europe. This product is listed on Euronext Paris and Amsterdam under the ticker symbol CRON, expanding access to Cronos for European investors.
Why This Matters for Investors
The introduction of the Canary Staked CRO ETF marks a significant development for those interested in cryptocurrency investing. By offering exposure to Cronos without the complexities of direct asset management, the ETF appeals to both beginner and intermediate investors. The added staking rewards also make it an attractive choice for those seeking additional returns in the evolving digital asset market.
As the cryptocurrency industry continues to mature, regulated investment products like the Canary Staked CRO ETF are becoming increasingly important. They provide a bridge between traditional finance and the rapidly growing world of digital assets, making it easier for investors to participate in this emerging market.
