Digital assets represent a relatively new and rapidly evolving industry, and the value of the Shares depends on the acceptance of SUI. The first digital asset to gain global adoption and critical mass, Bitcoin, was launched in 2009. SUI was launched in 2023 and its development is ongoing. In general, digital asset networks, including the Sui Network and related protocols represent a relatively new and rapidly evolving industry that is subject to a variety of factors that are difficult to evaluate. For example, the realization of one or more of the following risks could materially adversely affect the value of the Shares: • Digital assets have only recently become selectively accepted as a means of payment by retail and commercial outlets, but there is no meaningful degree of use of SUI as a means of payment by retail or commercial outlets. Banks and other established financial institutions, whether voluntarily or in response to regulatory feedback, may refuse to process funds for SUI transactions; process wire transfers to or from Digital Asset Trading Platforms, SUI-related companies or service providers; or maintain accounts for persons or entities transacting in SUI. As a result, the prices of SUI are largely determined by speculators and validators, thus contributing to price volatility that makes retailers less likely to accept SUI in the future. While the use of other digital assets, such as Bitcoin, to purchase goods and services from commercial or service businesses is developing, SUI has not yet been accepted in the same manner because it has a slightly different purpose than Bitcoin. • Banks may not provide banking services, or may cut off banking services, to businesses that provide digital asset-related services or that accept digital assets as payment, which could dampen liquidity in the market and damage the public perception of digital assets generally or any one digital asset in particular, such as SUI, and their or its utility as a payment system, which could decrease the price of digital assets generally or individually. • The prices of digital assets may be determined on a relatively small number of Digital Asset Trading Platforms by a relatively small number of market participants, many of whom are speculators or those intimately involved with the issuance of such digital assets, such as validators or developers, which could contribute to price volatility that makes retailers less likely to accept digital assets in the future. • Certain privacy-preserving features have been or are expected to be introduced to a number of digital asset networks. If any such features are introduced to the Sui Network, any trading platforms or businesses that facilitate transactions in SUI may be at an increased risk of criminal or civil lawsuits, or of having banking services cut off if there is a concern that these features interfere with the performance of anti-money laundering duties and economic sanctions checks. • Users, developers and validators may switch to or adopt certain digital asset networks or protocols at the expense of their engagement with other digital asset networks and protocols, which may negatively impact those networks and protocols, including the Sui Network. The Trust is not actively managed and will not have any formal strategy relating to the development of the Sui Network. The Sui protocol was only recently conceived, and the Sui Network or its underlying technologies may not function as intended, which could have an adverse impact on the value of SUI and an investment in the Shares. Components of the Sui protocol were first conceived in 2017 by Evan Cheng, Adeniyi Abiodun, Sam Blackshear, George Danezis, and Kostas Chalkias, continuing research performed while employed by Meta on the Diem (previously called Libra) project. To achieve consensus among validators, the network historically used a dual-layer design consisting of “Narwhal,” a data-availability layer, and “Bullshark,” a consensus protocol. However, in July 2024, the Sui Network introduced the “Mysticeti” consensus mechanism to replace Bullshark, improving transaction latency and throughput while continuing to use Narwhal for data dissemination. This configuration enables the Sui Network to verify and execute many transactions in parallel, rather than sequentially like in prominent blockchains like Bitcoin and Ethereum. The Sui protocol, Narwhal and Mysticeti are new technologies that are not widely used and may not function as intended. For example, they may require more specialized equipment to participate in the network and fail to attract a significant number of users. In addition, there may be flaws in the cryptography underlying Narwhal and Mysticeti, including flaws that affect functionality of the Sui Network or make the network vulnerable to attack. The development of
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