Trust determined on a GAAP basis is referred to in this prospectus as “Principal Market NAV.” “Digital Asset Market” means a “Brokered Market,” “Dealer Market,” “Principal-to-Principal Market” or “Exchange Market,” as each such term is defined in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Master Glossary. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates—Principal Market and Fair Value Determination” in this prospectus for more information on the Trust’s principal market selection. The Trust uses the Index Price to calculate its “NAV,” a non-GAAP metric, which is the aggregate value, expressed in U.S. dollars, of the Trust’s assets (other than U.S. dollars or other fiat currency), less the U.S. dollar value of the Trust’s expenses and other liabilities calculated in the manner set forth under “Business —Valuation of SUI and Determination of NAV.” “NAV per Share” is calculated by dividing NAV by the number of Shares then outstanding. NAV and NAV per Share are not measures calculated in accordance with GAAP. NAV is not intended to be a substitute for the Trust’s Principal Market NAV calculated in accordance with GAAP, and NAV per Share is not intended to be a substitute for the Trust’s Principal Market NAV per Share calculated in accordance with GAAP. Staking The Trust Agreement provides that the Trust may engage in Staking, but only if (and, then, only to the extent that) the Staking Condition has been satisfied. Subject to the Staking Condition being satisfied, and subject to compliance with any additional requirements that may arise in connection with satisfaction of the Staking Condition, in the future the Sponsor may cause the Trust to stake a portion of its SUI holdings on the proof-of-stake validation mechanism of the Sui Network to receive Staking Consideration comprising additional SUI. As of the date of this prospectus, the Staking Condition has not been met for the Trust, and there can be no assurance as to whether or when the Staking Condition will be met for the Trust in the future. As a result, the Trust currently is prohibited from engaging in Staking, and there can be no assurance that the Trust will be permitted to engage in Staking in the future. See “Risk Factors—Risk Factors Related to Staking—The Trust will not be permitted to engage in Staking unless (and, then, only to the extent that) the Staking Condition is satisfied in addition to the Trust satisfying any additional requirements that may arise in connection with the satisfaction of the Staking Condition, which could negatively affect the value of the Shares.” The Sponsor may decide in its sole discretion not to pursue satisfaction of the Staking Condition, and there can be no assurance that the Sponsor will cause the Trust to engage in Staking. Staking Arrangements and Provider-Facilitated Staking Model If the Staking Condition is satisfied, the Sponsor anticipates that the Trust would enter into written arrangements (the “Staking Arrangements”) with the Custodian to stake the Trust’s SUI to one or more vetted third party staking providers (each, a “Staking Provider”) operating validator software and associated hardware (“Provider-Facilitated Staking”). The Sponsor anticipates that the Trust’s SUI would be staked exclusively by means of Provider-Facilitated Staking. Under the Staking Arrangements, the Trust would be permitted to accept only Native Staking Consideration received in the form of SUI, and would not be permitted to accept any Other Staking Consideration in the form of other digital assets. Neither the Trust, nor the Sponsor on behalf of the Trust, would have the ability under the Staking Arrangements to take advantage of any variations in the market to improve the investments of Shareholders, including with respect to variations based on the value of SUI or the amount of Native Staking Consideration received as a staking rewards. As a whole, the Staking Arrangements would permit the Trust to retain ownership of its SUI at all times for U.S. federal income tax purposes while simultaneously protecting and conserving the Trust Estate by mitigating the risk that another party or group could control a majority of the SUI Network and engage in transactions that could reduce the Trust Estate’s value. A Staking Provider must meet certain requirements in order to be selected to participate in the Provider-Facilitated Staking model contemplated by the Staking Arrangements. For example, each Staking Provider would be required to be unrelated to both the Trust and the Sponsor. Moreover, a Staking Provider would also be required to regularly enter into staking arrangements with unrelated persons involving activities similar to the Staking Arrangements. Under the Staking Arrangements, the Staking Provider would bear all of its own expenses (including those on account of its validation activities). The Staking Provider would be the node operator and would be obligated to operate the validator through which the Trust’s SUI is staked to ensure that validation occurs. The Trust’s SUI would be staked from the Trust’s wallets administered by the Custodian, and the Staking Provider would perform any related validation activities. The Trust would retain control of its staked SUI because the SUI Network does not permit the Staking Provider to transfer staked SUI to any wallet other than as designated by the Sponsor. Because the Trust’s staked SUI cannot, pursuant to the SUI Network protocol, be transferred other than as directed by the Sponsor, the Trust’s SUI would not be deemed commingled with the SUI of any other SUI holder in connection with Staking, such as the Staking
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