applied and operating without exceptions, (ii) periodically reviewing Sponsor team members’ access to the custodial wallet environment to ensure appropriateness, and (iii) reviewing the Custodian’s third party management control. The Sponsor also reviews the SOC report for one of the key sub-service providers, AWS, including specifically sections related to availability, security and confidentiality. Under its third party risk management framework, the Sponsor also performs other ongoing monitoring of the Custodian, including the completion of an assessment of the Custodian’s cybersecurity controls. In addition, the Sponsor expects to screen all eligible Staking Providers in a manner consistent with its practices in screening eligible custodians, including, but not limited to, by (i) conducting initial and, thereafter, annual reviews of the Staking Provider’s SOC report to assess controls relevant to the staking activities environment, (ii) conducting initial and, thereafter, annual reviews of the SOC reports of the Staking Provider’s cloud-based infrastructure service provider (for example, AWS) covering availability, security and confidentiality principles to ensure necessary controls governing continued service and “uptime” (i.e., the ratio of signatures provided by the Staking Provider to the total number of signatures it should have provided during a given time period), (iii) reviewing authority levels and access rights within the Staking Provider’s staking activities environment, and (iv) performing other ongoing diligence procedures, including periodic assessments of the Staking Provider’s cybersecurity policies and controls, monitoring the Staking Provider’s online environment for major security events and periodic discussions with the Staking Provider’s client-facing teams regarding new company initiatives. The foregoing description of the Staking Arrangements does not purport to be complete and is qualified in its entirety by reference to the full text of the Staking Addendum to the Custodial Services Agreement between the Trust and the Custodian, a copy of which is attached as an exhibit to the registration statement of which this prospectus forms a part. See “Risk Factors—Risk Factors Related to Staking.” Book-Entry Form Shares are held primarily in book-entry form by the Transfer Agent. The Sponsor or its delegate will direct the Transfer Agent to credit or debit, as applicable, the number of Baskets to the applicable Authorized Participant. The Transfer Agent will issue or cancel Baskets, as applicable. Transfers will be made in accordance with standard securities industry practice. The Sponsor may cause the Trust to issue Shares in certificated form in limited circumstances in its sole discretion. Share Splits In its discretion, the Sponsor may direct the Transfer Agent to declare a split or reverse split in the number of Shares outstanding and to make a corresponding change in the number of Shares constituting a Basket. For example, if the Sponsor believes that the per Share price in the secondary market for Shares has risen or fallen outside a desirable trading price range, it may declare such a split or reverse split. On March 6, 2026, the Trust completed a 1-for-5 Reverse Share Split of the Trust’s issued and outstanding Shares. In connection with the Reverse Share Split effective for shareholders of record on March 5, 2026, every 5 issued and outstanding Shares of the Trust were converted into one Share. The number of outstanding Shares and per-Share amounts disclosed for periods prior to March 6, 2026 have been retroactively adjusted to reflect the effects of the Share Split.
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