SecProbe.io

March 18, 2025
Steven McClurg
Chief Executive Officer
Canary HBAR ETF
c/o Canary Capital Group LLC
1131 4th Avenue S #230
Nashville, TN 37210
Re:Canary HBAR ETF
Amendment No. 1 to Registration Statement on Form S-1
Filed February 21, 2025
File No. 333-283135
Dear Steven McClurg:
            We have reviewed your amended registration statement and have the following
comments.
            Please respond to this letter by amending your registration statement and providing
the requested information. If you do not believe a comment applies to your facts and
circumstances or do not believe an amendment is appropriate, please tell us why in your
response.
            After reviewing any amendment to your registration statement and the information
you provide in response to this letter, we may have additional comments.
Amendment No. 1 to Registration Statement on Form S-1
General
1.To the extent that you intend to use a fact sheet, please provide us with a copy for our
review.
2.Please disclose whether and to what extent the Trust has plans to stake its HBAR.
Table of Contents, page i
3.Please revise the Table of Contents to include a specific reference to the Risk Factors
section. Please refer to Item 502(a) of Regulation S-K. In addition, please revise to
include a "Risk Factors" heading at the beginning of the Risk Factors section.

March 18, 2025
Page 2
Prospectus Summary, page 1
4.Please revise your prospectus summary to disclose, if true, that:

•The Trust is a passive investment vehicle that does not seek to generate returns
beyond tracking the price of HBAR; and
•The amount of HBAR represented by a Share will decline over time due to the
transfer of the Trust's HBAR to pay the Sponsor Fee and other liabilities,
regardless of whether the trading prices of Shares rise or fall. In this regard, we
note your disclosure on page 41 that the amount of HBAR represented by the
Shares will decline over time.
Overview of the Trust, page 1
5.We note your disclosure that "Except in limited circumstances, Shareholders will have
no voting rights under the Trust Agreement." Please revise your disclosure to disclose
the "limited circumstances" under which shareholders have voting rights under the
Trust Agreement.
HBAR and the Hedera Network, page 2
6.We note your disclosure that the Hedera Network was built on the hashgraph
distributed consensus algorithm, invented by Dr. Leemon Baird and subsequently
patented by Swirlds, Inc. Please revise to disclose the connection between Dr.
Leemon Baird and Swirlds, Inc. as well as the involvement of Mance Harmon.
7.Please revise to provide additional disclosure about the nature and number of
decentralized applications developed on the network as well as active developers. To
the extent there is a risk that the ecosystem will not attract more developers, users, and
applications, please consider disclosing this risk and its impacts.
Custody of the Trust's Assets, page 7
8.We note your disclosure that the "Custodians provide insured safekeeping of digital
assets." Please revise your disclosure to clarify the extent to which the Custodians
provide insurance. In this regard, we note that the insurance policies held by Coinbase
Custodian and BitGo are shared among all their clients and are not specific to the
Trust or to customers holding HBAR.
Plan of Distribution, page 8
9.We note your disclosure here and similar disclosure on page 37 that the Trust will
only facilitate the creation and redemption of shares in exchange for cash and that if
the Trust were to create or redeem shares in exchange for HBAR, the Trust would first
need to seek certain regulatory approvals. Please revise your disclosure as appropriate
to reconcile these statements with your disclosure elsewhere that creation and
redemption orders may be denominated and settled in an amount of HBAR or cash.
HBAR, HBAR Markets and Regulation of HBAR
Hashgraph Distributed Consensus, page 10
Please expand your disclosure regarding the hashgraph distributed consensus 10.

March 18, 2025
Page 3
algorithm, including by disclosing:
•The number of consensus nodes in the Hedera Network;
•That all consensus nodes are operated by the Hedera Council;
•The rewards provided to each category of network participant for their
contributions to or participation on the Hedera Network;
•The fees involved in executing a transaction on the Hedera Network and how they
are calculated; and
•How staking works on the Hedera Network.
Hedera Governing Council, page 11
11.Please address the following regarding the Hedera Governing Council:
•Please disclose the number of global organizations that make up the Hedera
Council as well as the identities of the material global organizations that make up
the Hedera Council. Please also disclose existing and potential conflicts of interest
that could arise due to the identity of the members of the Hedera Council, and
provide risk factor disclosure, to the extent appropriate.
•Please expand your disclosure to provide additional detail about the governance
mechanism of the Hedera Council, including a description of the board of
directors, committees, and the officers of the organization, and provide more
specific risk factor disclosure regarding the decision-making concentration on the
Hedera Network.
•We note your disclosure that Hedera Council membership does not confer any
economic interest in Hedera. Please revise to clarify whether there are any
economic incentives for Hedera Council membership, including the rewards from
hosting and maintaining a node on the Hedera Network.
Hedera's "HBAR" Cryptocurrency, page 12
12.Please expand your disclosure regarding HBAR to address the vesting schedule of
HBAR and the percentage allocation of HBAR among various parties or purposes in
the Hedera Network.
Risk Factors, page 17
13.Please revise your Risk Factor disclosure to provide your internal policies and
procedures for analyzing whether HBAR is offered and sold as a "security" within the
meaning of Section 2(a)(1) of the Securities Act and disclose the risks of such internal
policies and procedures, including that such policies and procedures are risk-based
judgments made by the Sponsor and not a legal standard or determination binding on
any regulatory body or court.
Risks Associated with Investing in the Trust, page 35
We note your disclosure on page 85 regarding the exclusive jurisdiction
provision. Please add a risk factor regarding the exclusive forum provision, clearly
describing any risks or other impacts on Shareholders and addressing any uncertainty
about enforceability. Please also disclose that Shareholders cannot waive compliance 14.

March 18, 2025
Page 4
with the federal securities laws and the rules and regulations thereunder.
15.Please address the risk that cash creations and redemptions may impact the efficiency
of the arbitrage mechanism compared to in-kind creations and redemptions.
The Custodians and Cash Custodian could become insolvent, page 39
16.We note that "the Trust assets will be commingled with assets of the Custodians' other
customers in an omnibus account." We also note your disclosure on page 65 that the
"Trust’s HBAR held in the cold storage by the Custodians are held in segregated
wallets and therefore are not commingled with the Custodians’ or other customer
assets." Please revise your disclosure to reconcile this discrepancy.
The Trust and HBAR Prices
The Pricing Benchmark, page 54
17.We note your disclosure that the Benchmark Provider and the Sponsor have entered
into an Index License Agreement. When available, please disclose the material terms
of the agreement, including the obligations of each party and the term and termination
provisions. Please also file the agreement as an exhibit to your registration statement.
18.Please revise your disclosure to provide a materially complete description of the
benchmark methodology. Please also address the following in your disclosure
regarding the benchmark:
•Include a brief description of each Constituent Exchange, including where they
are located and how they are licensed or regulated;
•Include a table with market share and volume information for each constituent
platform used to calculate the HBAR price;
•Explain how the identified constituent platforms are selected; and
•Describe the impact that adjustments that may be made to the Index could have on
the NAV of the Trust.
Additional Information About the Trust
Amendments, page 62
19.Please revise to disclose how and when the Sponsor will notify the Shareholders of
material amendments to the Trust Agreement. In addition, and to the extent accurate,
please include risk factor disclosure that the Sponsor may in its sole discretion and
without Shareholder consent amend or otherwise supplement the Trust Agreement.
The Trust's Service Providers, page 62
20.Once you have entered into material agreements with the Trust's service providers,
please revise to disclose the material terms of each of these agreements, including the
term of each agreement and the termination provisions of each agreement.
21.Please revise your disclosure to discuss the Sponsor's experience sponsoring exchange
traded funds and specifically its experience related to crypto asset markets.

March 18, 2025
Page 5
HBAR Trading Counterparties, page 64
22.Please revise to:
•Describe the approval process of the HBAR Trading Counterparties, including
any specific criteria for engagement as a HBAR Trading Counterparty, such as
whether the HBAR Trading Counterparty may be an affiliate of the Trust and/or
Sponsor; and
•Disclose the material terms of any agreement you have with the HBAR Trading
Counterparty, including whether and to what extent there will be any contractual
obligations on the part of the HBAR Trading Counterparty to participate in cash
orders for creations or redemptions.
Custody of the Trust's Assets, page 65
23.We note that "the Sponsor may, in its sole discretion, add or terminate Custodians at
any time," or "change the custodians for the Trust’s HBAR holdings, but it will have
no obligation to do so or to seek any particular terms for the Trust from other such
custodians." Please revise to clarify how and when the Sponsor will notify investors
of any such decisions.
Custody with the Coinbase Custodian, page 66
24.Please revise to disclose the term and termination provisions of the Coinbase
Custodial Services Agreement.
25.You state that the Coinbase Custodian’s maximum liability limit for each cold storage
address is $100 million. Please revise to disclose whether or not your agreement with
the Coinbase Custodian limits the size of each storage address to $100 million.
Liability and Indemnification
Custodians, page 82
26.We note your disclosure that the Custodians have limited liability even in the event of
fraud. Your disclosure on page 66 states that the Coinbase Custodian’s liability is
subject to certain limitations "other than with respect to claims and losses arising from
fraud or willful misconduct." Please revise to reconcile any discrepancies, clarifying
whether BitGo's liability is limited even in the event of fraud.
            Please contact Mark Brunhofer at 202-551-3638 or Robert Telewicz at 202-551-3438
if you have questions regarding comments on the financial statements and related
matters. Please contact Irene Paik at 202-551-6553 or Sandra Hunter Berkheimer at 202-551-
3758 with any other questions.
Sincerely,
Division of Corporation Finance
Office of Crypto Assets
cc:Morrison C. Warren, Esq.