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1、2025/5/8 17:06sec.gov/Archives/edgar/data/2061626/000121390025037812/ea0240078-s1_21shares.htmhttps:/www.sec.gov/Archives/edgar/data/2061626/000121390025037812/ea0240078-s1_21shares.htm1/154S-1 1 ea0240078-s1_21shares.htm REGISTRATION STATEMENTAs filed with the Securities and Exchange Commission on
2、April 30,2025Registration No.333-UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON,D.C.20549 FORM S-1REGISTRATION STATEMENTUNDERTHE SECURITIES ACT OF 1933 21SHARES SUI ETF(Exact name of registrant as specified in its charter)Delaware 6221(State or other jurisdiction ofincorporation or organi
3、zation)(Primary Standard IndustrialClassification Code Number)(I.R.S.EmployerIdentification Number)477 Madison Avenue,6th FloorNew York,New York 10022(646)370-6016(Address,including zip code,and telephone number,including area code,of registrants principal executive offices)21Shares US LLCRussell Ba
4、rlow477 Madison Avenue,6th FloorNew York,New York 10022(646)370-6016(Address,including zip code,and telephone number,including area code,of agent for service)Copy to:Allison M.Fumai,Esq.Dechert LLP1095 Avenue of the AmericasNew York,New York 10036(212)698-3526 Approximate date of commencement of pro
5、posed sale to the public:As soon as practicable after the effective date of thisRegistration Statement.If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415under the Securities Act of 1933 check the following box:If this Form i
6、s filed to register additional securities for an offering pursuant to Rule 462(b)under the Securities Act of 1933,please check the following box and list the Securities Act of 1933 registration statement number of the earlier effective registrationstatement for the same offering:If this Form is a po
7、st-effective amendment filed pursuant to Rule 462(c)under the Securities Act of 1933,check the followingbox and list the Securities Act of 1933 registration statement number of the earlier effective registration statement for the sameoffering.If this Form is a post-effective amendment filed pursuant
8、 to Rule 462(d)under the Securities Act of 1933,check the followingbox and list the Securities Act of 1933 registration statement number of the earlier effective registration statement for the sameoffering.Indicate by check mark whether the registrant is a large accelerated filer,an accelerated file
9、r,a non-accelerated filer,smallerreporting company,or an emerging growth company.See the definitions of“large accelerated filer,”“accelerated filer,”“non-accelerated filer,”“smaller reporting company,”and“emerging growth company”in Rule 12b-2 of the Securities andExchange Act of 1934.Large accelerat
10、ed filerAccelerated filer2025/5/8 17:06sec.gov/Archives/edgar/data/2061626/000121390025037812/ea0240078-s1_21shares.htmhttps:/www.sec.gov/Archives/edgar/data/2061626/000121390025037812/ea0240078-s1_21shares.htm2/154Non-accelerated filerSmaller reporting company Emerging growth company If an emerging
11、 growth company,indicate by check mark if the registrant has elected not to use the extended transition periodfor complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B)of the SecuritiesAct of 1933.The Registrant hereby amends this Registration Statem
12、ent on such date or dates as may be necessary to delay itseffective date until the Registrant shall file a further amendment which specifically states that this Registration Statementshall thereafter become effective in accordance with Section 8(a)of the Securities Act of 1933 or until the Registrat
13、ionStatement shall become effective on such date as the Securities and Exchange Commission,acting pursuant to saidSection 8(a),may determine.2025/5/8 17:06sec.gov/Archives/edgar/data/2061626/000121390025037812/ea0240078-s1_21shares.htmhttps:/www.sec.gov/Archives/edgar/data/2061626/000121390025037812
14、/ea0240078-s1_21shares.htm3/154 The information in this Preliminary Prospectus is not complete and may be changed.We may not sell these securities untilthe registration statement filed with the Securities and Exchange Commission is effective.This Preliminary Prospectus isnot an offer to sell these s
15、ecurities and it is not soliciting an offer to buy these securities in any jurisdiction where the offeror sale is not permitted.Subject to Completion Dated April 30,2025 PRELIMINARY PROSPECTUS Shares 21Shares Sui ETF The 21Shares Sui ETF(the“Trust”)is an exchange-traded fund that issues common share
16、s of beneficial interest(the“Shares”)that are anticipated to be listed on (the“Exchange”).The Trust is a passive investment vehicle that does not seek to generatereturns beyond tracking the price of SUI tokens,the native token of the Sui Network(as defined below)(“SUI”),a Layer 1 proof-of-stake bloc
17、kchain and smart contract platform designed to make digital asset ownership fast,private,secure and accessible.Thismeans the Sponsor(as defined below)does not speculatively sell SUI at times when its price is high or speculatively acquire SUI atlow prices in the expectation of future price increases
18、.It also means the Trust will not utilize leverage,derivatives or any similararrangements in seeking to meet its investment objective.The Trusts investment objective is to seek to track the performance ofSUI,as measured by the performance of the CME CF Sui Dollar Reference Rate New York Variant(the“
19、PricingBenchmark”),adjusted for the Trusts expenses and other liabilities.The Pricing Benchmark is calculated by CF Benchmarks Ltd.(the“Benchmark Provider”)based on an aggregation of executed trade flow of major SUI trading platforms(“ConstituentExchanges”).The Pricing Benchmark is designed to refle
20、ct the performance of SUI in U.S.dollars.In seeking to achieve itsinvestment objective,the Trust will hold SUI and will value its Shares daily based on the Pricing Benchmark.21Shares US LLC(the“Sponsor”)is the sponsor of the Trust,CSC Delaware Trust Company(the“Trustee”)is the trustee of the Trust,a
21、nd CoinbaseCustody Trust Company,LLC(“Coinbase Custody”)(the“SUI Custodian”)is the SUI custodian for the Trust and will hold all ofthe Trusts SUI on the Trusts behalf.The Trust is an exchange-traded fund.Barring a liquidation or extraordinary circumstances,the Trust does not intend onpurchasing or s
22、elling SUI other than in connection with the creation and redemption of Shares.The Sponsor may also sell SUI topay certain expenses,which may be facilitated by the Prime Broker(as defined below)or any other prime brokers with whom theTrust contracts.When the Trust sells or redeems its Shares,SUI wil
23、l be transferred into or out of the Trust,as applicable,in exchange forblocks of Shares(a“Basket”)that are based on the quantity of SUI attributable to each Share of the Trust(net of accrued butunpaid Sponsor Fees(defined below)and any accrued but unpaid extraordinary expenses or liabilities).Financ
24、ial firms that are authorized to purchase Shares from or redeem Shares to the Trust(known as“AuthorizedParticipants”)purchase Shares by depositing cash in the Trusts account with the Cash Custodian(as defined below).This willcause the Sponsor,on behalf of the Trust,to automatically instruct a design
25、ated third party,who is not an Authorized Participantbut who may be an affiliate of an Authorized Participant and with whom the Sponsor has entered into an agreement on behalf of theTrust(each such third party,or the Prime Broker or the Lender(as defined below)as applicable,a“SUI Counterparty”),to(i
26、)purchase the amount of SUI equivalent in value to the cash deposit amount associated with the order and(ii)deposit theresulting SUI amount in the Trusts account with the Custodian,resulting in the Transfer Agent crediting the applicable amount ofShares to the Authorized Participant.When such an Aut
27、horized Participant redeems its Shares,the Sponsor,on behalf of the Trust will direct the Custodian totransfer SUI to a SUI Counterparty,who will sell the SUI to be executed,in the Sponsors reasonable efforts,at the PricingBenchmark price used by the Trust to calculate the Trusts net asset value(“NA
28、V”),taking into account any spread,commissions,or other trading costs and deposit the cash proceeds of such sale in the Trusts account with the Cash Custodian for settlement withthe Authorized Participant.Any slippage incurred(including,but not limited to,any trading fees,spreads,or commissions),on
29、acash equivalent basis,will be the responsibility of the Authorized Participant and not of the Trust or Sponsor.2025/5/8 17:06sec.gov/Archives/edgar/data/2061626/000121390025037812/ea0240078-s1_21shares.htmhttps:/www.sec.gov/Archives/edgar/data/2061626/000121390025037812/ea0240078-s1_21shares.htm4/1
30、54 Authorized Participants will deliver only cash to create shares and will receive only cash when redeeming Shares.Further,Authorized Participants will not directly or indirectly purchase,hold,deliver,or receive SUI as part of the creation or redemptionprocess or otherwise direct the Trust or a SUI
31、 Counterparty with respect to purchasing,holding,delivering,or receiving SUI as partof the creation or redemption process.The SUI Counterparty is a designated third party with whom the Sponsor has entered into an agreement on behalf of the Trustthat will deliver,receive or convert to U.S.dollars the
32、 SUI related to the Authorized Participants creation or redemption order.TheSponsor performs extensive due diligence as part of its SUI Counterparty selection and onboarding process.As part of this process,the Sponsor assesses SUI Counterparty candidates against various criteria,including those rela
33、ting to candidates(1)financials,(2)reputation,(3)settlement history with the Sponsor,and(4)their regulatory oversight.The Trust will create Shares by receiving SUIfrom a SUI Counterparty that is not the Authorized Participant,and the Trust not the Authorized Participant is responsible forselecting t
34、he SUI Counterparty to deliver the SUI.Further,the SUI Counterparty will not be acting as an agent of the AuthorizedParticipant with respect to the delivery of the SUI to the Trust or acting at the direction of the Authorized Participant with respect tothe delivery of the SUI to the Trust.The SUI Co
35、unterparty is not contractually obligated to participate in cash orders for creationsor redemptions.The SUI Counterparty reserves the right to refuse or to cancel any pending creation or redemption order at anytime before the Sponsor places a purchase order.Authorized Participants may then offer Sha
36、res to the public at prices that depend on various factors,including the supply anddemand for Shares,the value of the Trusts assets,and market conditions at the time of a transaction.Shareholders who buy or sellShares during the day from their broker on the secondary market may do so at a premium or
37、 discount relative to the NAV of theShares of the Trust.Except when aggregated in Baskets,Shares are not redeemable securities.Baskets are only redeemable by AuthorizedParticipants.On,2025 the Pricing Benchmark was$.Shareholders who decide to buy or sell Shares of the Trust will place their trade or
38、ders through their brokers and will incurcustomary brokerage commissions and charges.Prior to this offering,there has been no public market for the Shares.The Sharesare expected to be listed for trading,subject to notice of issuance,on the Exchange under the ticker symbol“”.The offering of an indete
39、rminate amount of the Trusts Shares is registered with the Securities and Exchange Commission(the“SEC”)in accordance with the Securities Act of 1933,as amended(the“1933 Act”).The offering is intended to be a continuousoffering and is not expected to terminate until three years from the date of the o
40、riginal offering,unless extended as permitted byapplicable rules under the 1933 Act.The Trust is not an investment company registered under the Investment CompanyAct of 1940,as amended(the“1940 Act”),and is not subject to regulation under the 1940 Act.Investors in the Trust will not,therefore,receiv
41、e the regulatory protections afforded by investment companies registered under the 1940 Act.The Sponsor is notacting in the capacity of an“Investment Adviser”(as defined in Section 202(a)(11)of the Investment Advisers Act of 1940,asamended(the“Advisers Act”),the Sponsors provision of services to the
42、 Trust will not be governed by the Advisers Act,and theSponsor is not subject to a fiduciary standard of care.The Trust is not a commodity pool for purposes of the CommodityExchange Act of 1936,as amended(the“CEA”),and the Sponsor is not subject to regulation by the Commodity Futures TradingCommissi
43、on(the“CFTC”)as a commodity pool operator or a commodity trading advisor.The Trusts Shares are neither interestsin nor obligations of the Sponsor or the Trustee.Shareholders in the Trust will not benefit from the protections afforded to investorsin SUI futures contracts on regulated futures markets.
44、AN INVESTMENT IN THE TRUST INVOLVES SIGNIFICANT RISKS AND MAY NOT BE SUITABLE FORSHAREHOLDERS WHO ARE NOT IN A POSITION TO ACCEPT MORE RISK THAN MAY BE INVOLVED WITHEXCHANGE-TRADED PRODUCTS THAT DO NOT HOLD SUI.THE SHARES ARE SPECULATIVESECURITIES.THEIR PURCHASE INVOLVES A HIGH DEGREE OF RISK AND YO
45、U COULD LOSE YOUR ENTIREINVESTMENT.YOU SHOULD CONSIDER ALL RISK FACTORS BEFORE INVESTING IN THE TRUST.PLEASEREFER TO“RISK FACTORS”BEGINNING ON PAGE 15.NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OFTHE SECURITIES OFFERED IN THIS PROSPECTUS,OR DETERMINED IF THIS PRO
46、SPECTUS IS TRUTHFULOR COMPLETE.ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.THE TRUST IS AN“EMERGING GROWTH COMPANY”AS THAT TERM IS USED IN THE JUMPSTART OURBUSINESS STARTUPS ACT(THE“JOBS ACT”)AND,AS SUCH,MAY ELECT TO COMPLY WITH CERTAINREDUCED REPORTING REQUIREMENTS.The date of this Pro
47、spectus is,2025 2025/5/8 17:06sec.gov/Archives/edgar/data/2061626/000121390025037812/ea0240078-s1_21shares.htmhttps:/www.sec.gov/Archives/edgar/data/2061626/000121390025037812/ea0240078-s1_21shares.htm5/154 2025/5/8 17:06sec.gov/Archives/edgar/data/2061626/000121390025037812/ea0240078-s1_21shares.ht
48、mhttps:/www.sec.gov/Archives/edgar/data/2061626/000121390025037812/ea0240078-s1_21shares.htm6/154 TABLE OF CONTENTS PageSTATEMENT REGARDING FORWARD-LOOKING STATEMENTS iiPROSPECTUS SUMMARY 1RISK FACTORS 15SUI,SUI MARKETS AND REGULATION OF SUI 69THE TRUST AND SUI PRICES 79NAV DETERMINATIONS 82ADDITION
49、AL INFORMATION ABOUT THE TRUST 85THE TRUSTS SERVICE PROVIDERS 89CUSTODY OF THE TRUSTS ASSETS 91PRIME BROKER 93FORM OF SHARES 97TRANSFER OF SHARES 98PLAN OF DISTRIBUTION 99CREATION AND REDEMPTION OF SHARES 100USE OF PROCEEDS 107OWNERSHIP OF BENEFICIAL INTEREST IN THE TRUST 108CONFLICTS OF INTEREST 10
50、9DUTIES OF THE SPONSOR 111LIABILITY AND INDEMNIFICATION 113PROVISIONS OF LAW 115MANAGEMENT;VOTING BY SHAREHOLDERS 116BOOKS AND RECORDS 116STATEMENTS,FILINGS,AND REPORTS TO SHAREHOLDERS 117FISCAL YEAR 117GOVERNING LAW;CONSENT TO DELAWARE JURISDICTION 117LEGAL MATTERS 117EXPERTS 117OTHER MATERIAL CONT
51、RACTS 118UNITED STATES FEDERAL INCOME TAX CONSEQUENCES 119PURCHASES BY EMPLOYEE BENEFIT PLANS 124INFORMATION YOU SHOULD KNOW 125SUMMARY OF PROMOTIONAL AND SALES MATERIAL 125INTELLECTUAL PROPERTY 126WHERE YOU CAN FIND MORE INFORMATION 127PRIVACY POLICY 128REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOU
52、NTING FIRM F-1APPENDIX A A-1PART II INFORMATION NOT REQUIRED IN PROSPECTUS II-1 This Prospectus contains information you should consider when making an investment decision about the Shares of the Trust.You may rely on the information contained in this Prospectus.The Trust and the Sponsor have not au
53、thorized any person to provideyou with different information and,if anyone provides you with different or inconsistent information,you should not rely on it.This Prospectus is not an offer to sell the Shares in any jurisdiction where the offer or sale of the Shares is not permitted.The Shares of the
54、 Trust are not registered for public sale in any jurisdiction other than the United States.Until 25 calendar days after the date of this prospectus,all dealers effecting transactions in the Shares,whether or notparticipating in this offering,may be required to deliver a prospectus.This requirement i
55、s in addition to the dealers obligation todeliver a prospectus when acting as underwriters and with respect to unsold allotments or subscriptions.i2025/5/8 17:06sec.gov/Archives/edgar/data/2061626/000121390025037812/ea0240078-s1_21shares.htmhttps:/www.sec.gov/Archives/edgar/data/2061626/000121390025
56、037812/ea0240078-s1_21shares.htm7/154 STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This Prospectus includes“forward-looking statements”that generally relate to future events or future performance.In somecases,you can identify forward-looking statements by terminology such as“may,”“will,”“should,”“
57、expect,”“intend,”“plan,”“anticipate,”“believe,”“estimate,”“predict,”“potential”or the negative of these terms or other comparable terminology.Allstatements(other than statements of historical fact)included in this Prospectus that address activities,events or developments thatwill or may occur in the
58、 future,including such matters as movements in the digital asset markets and indexes that track suchmovements,the Trusts operations,the Sponsors plans and references to the Trusts future success and other similar matters,areforward-looking statements.These statements are only predictions.Actual even
59、ts or results may differ materially.These statementsare based upon certain assumptions and analyses the Sponsor has made based on its perception of historical trends,currentconditions and expected future developments,as well as other factors appropriate in the circumstances.Whether or not actual res
60、ults and developments will conform to the Sponsors expectations and predictions,however,issubject to a number of risks and uncertainties,including the special considerations discussed in this Prospectus,general economic,market and business conditions,changes in laws or regulations,including those co
61、ncerning taxes,made by governmentalauthorities or regulatory bodies,and other world economic and political developments.Consequently,all the forward-lookingstatements made in this Prospectus are qualified by these cautionary statements,and there can be no assurance that actual results ordevelopments
62、 the Sponsor anticipates to occur will be realized or,even if substantially realized,that they will result in the expectedconsequences to,or have the expected effects on,the Trusts operations or the value of its Shares.Should one or more of these risks discussed in“Risk Factors”or other uncertaintie
63、s materialize,or should underlyingassumptions prove incorrect,actual outcomes may vary materially from those described in forward-looking statements.Forward-looking statements are made based on the Sponsors beliefs,estimates and opinions on the date the statements are made,andneither the Trust nor t
64、he Sponsor is under a duty or undertakes an obligation to update forward-looking statements if these beliefs,estimates and opinions or other circumstances should change,other than as required by applicable laws.Moreover,neither theTrust,the Sponsor,nor any other person assumes responsibility for the
65、 accuracy and completeness of any of these forward-lookingstatements.Investors are therefore cautioned against placing undue reliance on forward-looking statements.ii2025/5/8 17:06sec.gov/Archives/edgar/data/2061626/000121390025037812/ea0240078-s1_21shares.htmhttps:/www.sec.gov/Archives/edgar/data/2
66、061626/000121390025037812/ea0240078-s1_21shares.htm8/154 PROSPECTUS SUMMARY This is only a summary of the Prospectus and,while it contains material information about the Trust and its Shares,it doesnot contain or summarize all of the information about the Trust and the Shares contained in this Prosp
67、ectus that is materialand/or which may be important to you.You should read this entire Prospectus before making an investment decision about theShares.See“Glossary of Defined Terms”for an explanation of certain industry and technical terms used in this Prospectus.Overview of the Trust The 21Shares S
68、ui ETF(the“Trust”)is an exchange-traded fund that issues common shares of beneficial interest(the“Shares”)that trade on the (the“Exchange”).The Trusts investment objective is to seek to track the performance of SUI,asmeasured by the performance of the CME CF Sui Dollar Reference Rate New York Varian
69、t(the“Pricing Benchmark”),adjusted for the Trusts expenses and other liabilities.The Pricing Benchmark is calculated by CF Benchmarks Ltd.(the“Benchmark Provider”).The Pricing Benchmark is designed to reflect the performance of SUI in U.S.dollars.The Shares of theTrust are valued daily based on the
70、Pricing Benchmark.In seeking to achieve its investment objective,the Trust will hold SUI.The Trust is sponsored by 21Shares US LLC(the“Sponsor”),a wholly-owned subsidiary of 21co Holdings Limited(formerly known as Amun Holdings Limited).SUI is a digital asset.Like all digital assets,buying,holding a
71、nd selling SUI is very different from buying,holding andselling more conventional investments like stocks and bonds.Stocks represent ownership in a company,entitling shareholders toa portion of the companys profits.Bonds are debt instruments issued by corporations or governments,where the bondholder
72、 is acreditor to the issuer that is generally entitled to a stream of income payments.Ownership of stocks and bonds is typicallyrecorded through a centralized system managed by brokers,custodians or clearinghouses.Ownership of SUI does not entitle itsholders to any portion of a companys profits or a
73、ny stream of income payments.SUI is a digital asset and ownership of it isreflected on a distributed ledger.Additionally,SUI is not offered and sold as a security and is thus not subject to the protectionsof the U.S.federal securities laws.The Trust does not provide investors with direct exposure to
74、 SUI,and an investment in the Trust is not a direct investment inSUI.Rather,the Trust provides investors with the opportunity to indirectly access the market for SUI through a traditionalbrokerage account without the potential barriers to entry or risks involved with holding or transferring SUI dire
75、ctly or acquiringit from a SUI spot market.The Trust will custody its SUI at a regulated third-party custodian,Coinbase Custody Trust Company,LLC(the“SUICustodian”).The SUI Custodian is chartered as a New York state limited liability trust company that provides custody and tradeexecution services fo
76、r digital assets.The SUI Custodian is not Federal Deposit Insurance Corporation(“FDIC”)-insured butcarries insurance provided by private insurance carriers.The Trust,the Sponsor and the service providers will not loan or pledgethe Trusts assets,nor will the Trusts assets serve as collateral for any
77、loan or similar arrangement,other than in connection withthe Post-Trade Financing Agreement(as defined below).The Trust will not invest in derivatives.The Sponsor believes that theShares are designed to provide investors with a cost-effective and convenient way to invest in SUI without purchasing,ho
78、ldingand trading SUI directly.12025/5/8 17:06sec.gov/Archives/edgar/data/2061626/000121390025037812/ea0240078-s1_21shares.htmhttps:/www.sec.gov/Archives/edgar/data/2061626/000121390025037812/ea0240078-s1_21shares.htm9/154 SUI and the Sui Network SUI is a digital asset that is created and transmitted
79、 through the operations of the“Sui Network,”an online,distributedcomputing platform that operates on a peer-to-peer basis.The Sui Network is a decentralized blockchain platform designed tosupport a wide range of applications,particularly in the realm of decentralized finance(“DeFi”),non-fungible tok
80、ens(“NFTs”),and other blockchain-based services.The network aims to address scalability and efficiency issues that have plagued earlierblockchain networks like Bitcoin and Ethereum.By leveraging advanced consensus mechanisms and innovative data structures,the Sui Network seeks to provide a more scal
81、able,secure,and user-friendly environment for developers and users alike.The SuiNetwork employs a unique consensus algorithm that allows it to process a large number of transactions per second(“TPS”),making it suitable for applications that require high throughput,such as gaming and high-frequency t
82、rading.The Sui Networks architecture combines continuous monitoring of external blockchains,strategic validator keyregistrations,and a quadratic stake-based consensus mechanism to facilitate secure and decentralized cross-chain interactions.The Sui Network uses advanced cryptographic techniques to e
83、nsure the security and integrity of transactions.The distributednature of the network makes it resistant to attacks and censorship.The Sui Network is also designed to be highly interoperablewith other blockchain networks,allowing assets and data to be easily transferred between SUI and other blockch
84、ains,facilitatinga more connected and versatile ecosystem.No single entity owns or operates the Sui Network,the infrastructure of which is collectively maintained by a broad userbase.The Sui Network allows people to exchange tokens of value,called SUI,which are recorded on a public transaction ledge
85、rknown as a blockchain.SUI can be used to pay for transaction fees and network operations,including computational power onthe Sui Network,or it can be converted to fiat currencies,such as the U.S.dollar,at rates determined on digital asset tradingplatforms or in individual end-user-to-end-user trans
86、actions under a barter system.Furthermore,the Sui Network was designedto allow users to write and implement smart contracts-that is,general-purpose code that executes on the network and caninstruct the transmission of information and value based on a sophisticated set of logical conditions.Using sma
87、rt contracts,userscan create markets,store registries of debts or promises,represent the ownership of property,move funds in accordance withconditional instructions and create digital assets other than SUI on the Sui Network.Smart contract operations are executed onthe Sui blockchain in exchange for
88、 payment of SUI.Like the Ethereum network,the Sui Network is one of a number of projectsintended to expand blockchain use beyond just a peer-to-peer money system.The Sui Network primarily uses a delegated proof-of-stake consensus mechanism to incentivize SUI holders to validatetransactions.Unlike pr
89、oof-of-work,in which miners expend computational resources to compete to validate transactions and arerewarded coins in proportion to the amount of computational resources expended,in proof-of-stake,validators risk or“stake”coins to compete to be randomly selected to validate transactions and are re
90、warded coins in proportion to the amount of coinsstaked.Any malicious activity,such as disagreeing with the eventual consensus or otherwise violating protocol rules,results inthe forfeiture or“slashing”of a portion of the staked coins.Proof-of-stake is viewed as more energy efficient and scalable th
91、anproof-of-work and is sometimes referred to as“virtual mining”.Unlike many other smart contract platforms that batch transaction into blocks,Sui validators individually validatetransactions.Sui uses“Narwhal”and“Bullshark”as its memory pool and consensus engines,respectively,which supplementproof-of
92、-stake by allowing transactions performed on the Sui Network to be verified and executed in parallel,rather thansequentially like in prominent blockchains like Bitcoin and Ethereum.Under Narwhal,instead of a proposing validatorbroadcasting all transactions in a block to the other validators,the prop
93、osing validators send references to transactions that othervalidators have already received in their local memory pools.These memory pools serve as logs of unprocessed transactionsawaiting verification and execution on a blockchain.The transaction data can thus bypass the full consensus process,remo
94、vingthe large data transmission step which often impedes proof-of-stake consensus and introduces latency.Further unlike traditionalblockchains,which add transactions in a single,linear sequence,Bullshark uses a structure whereby each transaction points tomultiple previous transactions,allowing many
95、transactions to be processed at the same time.The purpose of Narwhal andBullshark is to increase scalability of a blockchain allowing for parallel processing of transactions and increasing transactionspeed.22025/5/8 17:06sec.gov/Archives/edgar/data/2061626/000121390025037812/ea0240078-s1_21shares.ht
96、mhttps:/www.sec.gov/Archives/edgar/data/2061626/000121390025037812/ea0240078-s1_21shares.htm10/154 The SUI token serves four purposes on the Sui Network.First,SUI can be staked within an“epoch”in order to participatein the proof-of-stake mechanism.Second,SUI is the asset denomination needed for payi
97、ng the Gas Fees to execute transactionsor other operations on the Sui Network.Third,SUI can be used as a versatile and liquid asset for various applications includingthe standard features of money a unit of account,a medium of exchange,or a store of value and more complex functionalityenabled by sma
98、rt contracts,interoperability,and composability across the Sui ecosystem.Fourth,and finally,SUI plays animportant role in governance by acting as a right to participate in on-chain voting on issues such as protocol upgrades.The totalsupply of SUI on the Sui Networks“mainnet”is capped at 10,000,000,0
99、00(ten billion),the supply of which is dependent upondesigned unlocking schedules and other circulation variables.SUI is“stored”on a blockchain and is linked to a unique digital address,or wallet,that is associated with a public key and aprivate key.The public key is used to generate the address tha
100、t is available to other users of the Sui Network.The address servesas the location to which SUI can be transferred and from which SUI can be sent.The private key authorizes the transfer or“spending”of SUI from its associated public address.Ownership of SUI is established by recording on Sui Networks
101、blockchain the unique address and the amount of SUI held.The wallet thus holds the cryptographic keys associated with SUI,rather than the SUI itself.SUI cannot be transferred by a holder unless that holder provides the private key.See“SUI,SUIMARKETS AND REGULATION OF SUI Summary of a SUI Transaction
102、”below.For more information on SUI and the Sui Network,see“Sui,SUI Market and Regulation of SUI”below.The Trusts Investment Objective The Trusts investment objective is to seek to track the performance of SUI,as measured by the Pricing Benchmark,adjusted for the Trusts expenses and other liabilities
103、.In seeking to achieve its investment objective,the Trust will hold SUI andwill value its Shares daily as of 4:00 p.m.ET based on the Pricing Benchmark.Barring the liquidation of the Trust or extraordinary circumstances(including but not limited to,non-recurring expenses andcosts of services perform
104、ed by the Sponsor or a service provider on behalf of the Trust to protect the Trust or the interests ofShareholders,such as in connection with any fork of the Sui Network,any indemnification of agents,service providers orcounterparties of the Trust and extraordinary legal fees and expenses,including
105、 any legal fees and expenses incurred inconnection with litigation,regulatory enforcement or investigation matters),the Trust generally will not purchase or sell SUI,other than in connection with the creation or redemption of Shares.The Sponsor may also sell SUI to pay certain expenses,which may be
106、facilitated by the Prime Broker(as defined below)or any other prime brokers with whom the Trust contracts.When the Trust sells or redeems its Shares,SUI will be transferred into or out of the Trust,as applicable,in exchange forblocks of Shares(a“Basket”)that are based on the quantity of SUI attribut
107、able to each Share of the Trust(net of accrued butunpaid Sponsor Fees(defined below)and any accrued but unpaid extraordinary expenses or liabilities).Financial firms that are authorized to purchase Shares from or redeem Shares to the Trust(known as“AuthorizedParticipants”)will purchase Shares by dep
108、ositing cash in the Trusts account with the Cash Custodian.This will cause theSponsor,on behalf of the Trust,to automatically instruct a designated third party,who is not an Authorized Participant but whomay be an affiliate of an Authorized Participant and with whom the Sponsor has entered into an a
109、greement on behalf of the Trust(each such third party,or the Prime Broker or Lender,as applicable,a“SUI Counterparty”),to(i)purchase the amount of SUIequivalent in value to the cash deposit amount associated with the order and(ii)deposit the resulting SUI deposit amount in theTrusts account with the
110、 SUI Custodian,resulting in the Transfer Agent crediting the applicable amount of Shares to theAuthorized Participant.32025/5/8 17:06sec.gov/Archives/edgar/data/2061626/000121390025037812/ea0240078-s1_21shares.htmhttps:/www.sec.gov/Archives/edgar/data/2061626/000121390025037812/ea0240078-s1_21shares
111、.htm11/154 When such an Authorized Participant redeems its Shares,the Sponsor,on behalf of the Trust will direct the SUI Custodianto transfer SUI to the SUI Counterparty,who will sell the SUI to be executed,in the Sponsors reasonable efforts,at the PricingBenchmark price used by the Trust to calcula
112、te NAV,taking into account any spread,commissions,or other trading costs anddeposit the cash proceeds of such sale in the Trusts account with the Cash Custodian for settlement with the AuthorizedParticipant.Any slippage incurred(including,but not limited to,any trading fees,spreads,or commissions)on
113、 a cash equivalentbasis,will be the responsibility of the Authorized Participant and not of the Trust or Sponsor.Authorized Participants will deliver only cash to create shares and will receive only cash when redeeming Shares.Further,Authorized Participants will not directly or indirectly purchase,h
114、old,deliver,or receive SUI as part of the creation orredemption process or otherwise direct the Trust or a SUI Counterparty with respect to purchasing,holding,delivering,orreceiving SUI as part of the creation or redemption process.The SUI Counterparty is a designated third party with whom the Spons
115、or has entered into an agreement on behalf of theTrust that will deliver,receive or convert to U.S.dollars the SUI related to the Authorized Participants creation or redemptionorder.The Trust will create Shares by receiving SUI from a SUI Counterparty that is not the Authorized Participant,and theTr
116、ust not the Authorized Participant is responsible for selecting the SUI Counterparty to deliver the SUI.Further,the SUICounterparty will not be acting as an agent of the Authorized Participant with respect to the delivery of the SUI to the Trust oracting at the direction of the Authorized Participan
117、t with respect to the delivery of the SUI to the Trust.The SUI Counterparty isnot contractually obligated to participate in cash orders for creations.The SUI Counterparty reserves the right to refuse or tocancel any pending creation order at any time before the Sponsor places a purchase order.The Tr
118、ust will redeem Shares by delivering SUI to a SUI Counterparty that is not the Authorized Participant and theTrust not the Authorized Participant is responsible for selecting the SUI Counterparty to receive the SUI.Further,the SUICounterparty will not be acting as an agent of the Authorized Particip
119、ant with respect to the receipt of the SUI from the Trust.The SUI Counterparty is not contractually obligated to participate in cash orders for redemptions.The SUI Counterpartyreserves the right to refuse or to cancel any pending redemption order at any time before the Sponsor places a purchase orde
120、r.As of the date of this Prospectus,the Authorized Participants are.As of the date of this Prospectus,and serve asSUI Counterparties.The Trust and/or Sponsor will bear the expense and risk of delivery and ownership of SUI once such SUIhas been received by the SUI Custodian on behalf of the Trust and
121、 until transferred by the SUI Custodian on behalf of the Trustto the SUI Counterparty for conversion to cash.All SUI will be held by the SUI Custodian.The Transfer Agent(as defined below)will facilitate the processing of purchaseand sale orders in Baskets to and from the Trust.CME CF Sui Dollar Refe
122、rence Rate New York Variant The Pricing Benchmark was introduced on.The Benchmark Provider is the administrator of the Pricing Benchmark.ThePricing Benchmark is calculated daily.42025/5/8 17:06sec.gov/Archives/edgar/data/2061626/000121390025037812/ea0240078-s1_21shares.htmhttps:/www.sec.gov/Archives
123、/edgar/data/2061626/000121390025037812/ea0240078-s1_21shares.htm12/154 The Sponsor believes that the use of the Pricing Benchmark is reflective of a reasonable valuation of the average spot priceof SUI and that resistance to manipulation is a priority aim of its design methodology.The methodology:(i
124、)takes an observationperiod and divides it into equal partitions of time;(ii)then calculates the volume-weighted median of all transactions within eachpartition;and(iii)the value is determined from the arithmetic mean of the volume-weighted medians,equally weighted.Byemploying the foregoing steps,th
125、e Pricing Benchmark thereby seeks to ensure that transactions in SUI conducted at outlyingprices do not have an undue effect on the value of a specific partition,large trades or clusters of trades transacted over a shortperiod of time will not have an undue influence on the index or benchmark level,
126、as applicable,and the effect of large trades atprices that deviate from the prevailing price are mitigated from having an undue influence on the benchmark level.In addition,the Sponsor notes that an oversight function is implemented by the Benchmark Provider in seeking to ensurethat the Pricing Benc
127、hmark is administered through codified policies for Pricing Benchmark integrity,which include a conflictsof interest policy,a control framework,an accountability framework,and an input data policy.It is also subject to the UKBenchmarks Regulation(“BMR”),compliance with which regulations has been sub
128、ject to a Limited Assurance Audit under theISAE 3000 standards of September 12,2022.Pricing Benchmark data and the description of the Pricing Benchmark are based on information made publicly available bythe Benchmark Provider on its website at .None of the information on the Benchmark Providers webs
129、ite isincorporated by reference into this Prospectus.The Sponsor has entered into a licensing agreement with the Benchmark Provider to use the Pricing Benchmark.The Trustis entitled to use the Pricing Benchmark pursuant to a sub-licensing arrangement with the Sponsor.As the Pricing Benchmark iscalcu
130、lated as a price return,it currently does not track airdrops involving SUI.Accordingly,the Trust will not participate inairdrops,as further described below in“Risk factors The inability to recognize the economic benefit of a fork or an airdropcould adversely impact an investment in the Trust.”Pricin
131、g Information Available on the Exchange and Other Sources The current market price per Share(symbol:“”)will be published continuously as trades occur throughouteach trading day on the consolidated tape by market data vendors.The intra-day indicative value per Share will be published by the Exchange
132、once every 15 seconds throughouteach trading day on the consolidated tape by market data vendors.The intra-day indicative value per Share is calculated based on the Pricing Benchmark.The most recent end-of-day NAVwill be published as of the close of business by market data vendors and available on t
133、he Sponsors website ,or any successor thereto,and will be published on the consolidated tape.None of the information on theSponsors website is incorporated by reference into this Prospectus.Any adjustments made to the Pricing Benchmark will be published on the Benchmark Providers website athttps:/ o
134、r any successor thereto.None of the information on the Benchmark Providers website isincorporated by reference into this Prospectus.The selection of exchanges for use in the Pricing Benchmark is based on the accessible venues where execution transactionsfor SUI will occur.The exchanges on which mark
135、et participants primarily execute transactions for SUI may evolve from time totime,and the Benchmark Provider may make changes to the Constituent Exchanges(as defined below)comprising the PricingBenchmark from time to time for this or other reasons.To the extent the Trust executes transactions for S
136、UI,the exchanges onwhich the Trust executes transactions do not impact the Constituent Exchanges comprising the Pricing Benchmark.AlthoughConstituent Exchanges are selected for inclusion within the Pricing Benchmark in accordance with specified criteria andeligibility standards,changes to the Consti
137、tuent Exchanges may result in an impact on the pricing information reflected in thePricing Benchmark.Once it has actual knowledge of material changes to the Constituent Exchanges used to calculate the PricingBenchmark,the Trust will notify the owners of the beneficial interests of Shares in a prospe
138、ctus supplement or in its periodicExchange Act reports,as applicable,and on the Sponsors website.52025/5/8 17:06sec.gov/Archives/edgar/data/2061626/000121390025037812/ea0240078-s1_21shares.htmhttps:/www.sec.gov/Archives/edgar/data/2061626/000121390025037812/ea0240078-s1_21shares.htm13/154 The Sponso
139、r may,in its sole discretion,change either the Pricing Benchmark or Benchmark Provider without Shareholderapproval.Should such a change take place,the Trust will notify the owners of the beneficial interests of Shares in a prospectussupplement or in its periodic Exchange Act reports,as applicable,an
140、d on the Sponsors website.The intra-day levels and closing levels of the Pricing Benchmark are published by the Benchmark Provider,and the closingNAV is published by the Administrator(as defined below).The Shares are not issued,sponsored,endorsed,sold or promoted by the Exchange,and the Exchange mak
141、es norepresentation regarding the advisability of investing in the Shares.The Benchmark Provider makes no warranty,express or implied,as to the results to be obtained by any person or entityfrom the use of the Pricing Benchmark for any purpose.Pricing Benchmark information and any other data calcula
142、ted and/ordisseminated,in whole or part,by the Benchmark Provider is for informational purposes only,not intended for trading purposes,and provided on an“as is”basis.The Pricing Benchmark Provider does not warrant that the Pricing Benchmark information willbe uninterrupted or error-free,or that defe
143、cts will be corrected.The Benchmark Provider also does not recommend or make anyrepresentation as to possible benefits from any securities or investments,or third-party products or services.Shareholders shouldundertake their own due diligence regarding securities and investment practices.For more in
144、formation on the Pricing Benchmark and the Benchmark Provider,see“The Trust and SUI Prices”below.The Trusts Legal Structure The Trust is a Delaware statutory trust,formed on January 7,2025 pursuant to the Delaware Statutory Trust Act(“DSTA”).The Trust continuously issues Shares representing fraction
145、al undivided beneficial interest in,and ownership of,the Trust thatmay be purchased and sold on the Exchange.The Trust will operate pursuant to an Amended and Restated Trust Agreement(the“Trust Agreement”).CSC Delaware Trust Company,a Delaware trust company,is the Delaware trustee of the Trust(the“T
146、rustee”).The Trust is managed and controlled by the Sponsor.The Sponsor is a limited liability company formed in the stateof Delaware on June 16,2021.The Trusts Service Providers The Sponsor The Sponsor,21Shares US LLC,arranged for the creation of the Trust and is responsible for the ongoing registr
147、ation of theShares for their public offering in the United States and the listing of Shares on the Exchange.The Sponsor will develop amarketing plan for the Trust,will prepare marketing materials regarding the Shares of the Trust,and will exercise the marketingplan of the Trust on an ongoing basis.T
148、he Trustee The Trustee,CSC Delaware Trust Company,a Delaware trust company,acts as the trustee of the Trust as required to createa Delaware statutory trust in accordance with the Trusts Declaration of Trust and the DSTA.62025/5/8 17:06sec.gov/Archives/edgar/data/2061626/000121390025037812/ea0240078-
149、s1_21shares.htmhttps:/www.sec.gov/Archives/edgar/data/2061626/000121390025037812/ea0240078-s1_21shares.htm14/154 The Administrator serves as the Trusts administrator(the“Administrator”).The Administrators principal address is.Under the FundAdministration and Accounting Agreement,the Administrator pr
150、ovides necessary administrative,tax and accounting servicesand financial reporting for the maintenance and operations of the Trust,including valuing the Trusts SUI and calculating theNAV,NAV per Share,Principal Market NAV and Principal Market NAV per Share(each,as defined herein)and supplyingpricing
151、 information to the Sponsor for the Sponsors website.In addition,the Administrator makes available the office space,equipment,personnel and facilities required to provide such services.The Transfer Agent serves as the transfer agent for the Trust(the“Transfer Agent”).The Transfer Agent:(1)facilitate
152、s the issuance andredemption of Shares of the Trust;(2)responds to correspondence by Trust Shareholders and others relating to its duties;(3)maintains Shareholder accounts;and(4)makes periodic reports to the Trust.The Cash Custodian acts as custodian of the Trusts cash and cash equivalents(the“Cash
153、Custodian”).Pursuant to a cash custody agreemententered into with the Trust(the“Cash Custody Agreement”),the Cash Custodian will establish and maintain cash account(s)forthe Trust,and,upon instructions from the Sponsor acting on behalf of the Trust,facilitate cash transfers and cash payments fromthe
154、 Trusts account(s).The SUI Custodian Coinbase Custody Trust Company,LLC serves as the SUI Custodian and is a fiduciary under 100 of the New YorkBanking Law.The SUI Custodian is authorized to serve as the Trusts custodian under the Trust Agreement and pursuant to theterms and provisions of the Custod
155、ial Services Agreement.Under the Custodial Services Agreement by and among the SUICustodian and the Trust,the SUI Custodian is responsible for safekeeping all of the SUI owned by the Trust.The SUI Custodianwas selected by the Sponsor.The SUI Custodian is responsible for opening an account that holds
156、 the Trusts SUI(the“SUIAccount”),as well as facilitating the transfer of SUI required for the operation of the Trust.The SUI Custodian is a third-party limited purpose trust company that was chartered in 2018 upon receiving a trust charterfrom the New York Department of Financial Services.The SUI Cu
157、stodian is subject to extensive regulation and has among thelongest track records in the industry of providing custodial services for digital asset private keys.The Trusts assets with the SUICustodian are held in segregated accounts on the Sui Network,commonly referred to as“wallets,”and are therefo
158、re notcommingled with corporate or other customer assets.The segregated account in which the SUI Custodian will custody all of theTrusts SUI from time to time is hereinafter referred to as the Trusts“Vault Balance.”The SUI Custodian will keep a substantialportion of the private keys associated with
159、the Trusts SUI in“cold storage”or similarly secure technology(the“Cold VaultBalance”),with any remainder of the Vault Balance held as a“Hot Vault Balance.”All of the Trusts assets and private keys willbe held in cold storage of the SUI Custodian on an ongoing basis,but a portion of the Trusts assets
160、 may be held in hot tradingwallets,from time to time,in connection with the settlement of a creation or redemption transaction.72025/5/8 17:06sec.gov/Archives/edgar/data/2061626/000121390025037812/ea0240078-s1_21shares.htmhttps:/www.sec.gov/Archives/edgar/data/2061626/000121390025037812/ea0240078-s1
161、_21shares.htm15/154 After diligence investigation,the Sponsor believes that the SUI Custodians policies,procedures,and controls forsafekeeping,exclusively possessing,and controlling the Trusts SUI holdings are consistent with industry best practices toprotect against theft,loss,and unauthorized and
162、accidental use of the private keys.Although the SUI Custodian carries insurance,the SUI Custodians insurance does not cover any loss in value to SUI andonly covers losses caused by certain events such as fraud or theft and,in such covered events,it is unlikely the insurance wouldcover the full amoun
163、t of any losses incurred by the Trust.The insurance maintained by the SUI Custodian is shared among all ofthe SUI Custodians customers,is not specific to the Trust or to customers holding SUI with the SUI Custodian and may not beavailable or sufficient to protect the Trust from all possible losses o
164、r sources of losses.For more information on the SUI Custodian,see“Custody of the Trusts Assets”below.The Marketing Agent (the“Marketing Agent”)is responsible for reviewing and approving the marketing materials prepared by the Sponsor forcompliance with applicable SEC and Financial Industry Regulator
165、y Authority(“FINRA”)advertising laws,rules,andregulations.The Trusts Fees and Expenses The Trust will pay the unitary Sponsor Fee of%of the Trusts NAV(the“Sponsor Fee”).The Sponsor Fee is paid by theTrust to the Sponsor as compensation for services performed under the Trust Agreement.The Sponsor Fee
166、 will accrue daily and will be payable in SUI weekly in arrears.The Sponsor will calculate the Sponsor Feeon a daily basis by applying a%annualized rate to the Trusts NAV(as defined below)and the amount of SUI payable inrespect of each daily accrual shall be determined by reference to the Pricing Be
167、nchmark.The Sponsor has agreed to pay alloperating expenses(except for litigation expenses and other extraordinary expenses)out of the Sponsor Fee.Operating expensesassumed by the Sponsor include(i)the fee payable to the Marketing Agent for services it provides to the Trust(the“MarketingFee”),(ii)fe
168、es to the Administrator,if any,(iii)fees to the SUI Custodian,(iv)fees to the Transfer Agent,(v)fees to the Trustee,(vi)the fees and expenses related to any future listing,trading or quotation of the Shares on any listing exchange or quotationsystem(including legal,marketing and audit fees and expen
169、ses),(vii)ordinary course legal fees and expenses but not litigation-related expenses,(viii)audit fees,(ix)regulatory fees,including,if applicable,any fees relating to the registration of the Sharesunder the 1933 Act or Securities Exchange Act of 1934,as amended(the“Exchange Act”),(x)printing and ma
170、iling costs,(xi)costs of maintaining the Trusts website and(xii)applicable license fees(each,a“Sponsor-paid Expense,”and together,the“Sponsor-paid Expenses”),provided that any expense that qualifies as an Additional Trust Expense(as defined below)will bedeemed to be an Additional Trust Expense and n
171、ot a Sponsor-paid Expense.The Sponsor will not,however,assume certain extraordinary,non-recurring expenses that are not Sponsor-paid Expenses,including,but not limited to,taxes and governmental charges,expenses and costs of any extraordinary services performed by theSponsor(or any other service prov
172、ider)on behalf of the Trust to protect the Trust or the interests of Shareholders,anyindemnification of the SUI Custodian,Administrator or other agents,service providers or counter-parties of the Trust,the feesand expenses related to the listing,and extraordinary legal fees and expenses,including an
173、y legal fees and expenses incurred inconnection with litigation,regulatory enforcement or investigation matters(collectively,“Additional Trust Expenses”).Of theSponsor-paid Expenses,ordinary course legal fees and expenses shall be subject to a cap of$per annum.In the Sponsorssole discretion,all or a
174、ny portion of a Sponsor-paid Expense may be re-designated as an Additional Trust Expense.Pursuant tothe Trust Agreement,the Sponsor or its delegates will direct the SUI Custodian to transfer SUI from the Trusts Cold VaultBalance as needed to pay the Sponsor Fee and Additional Trust Expenses,if any.T
175、he Sponsor or its delegates will endeavor totransfer the smallest amount of SUI needed to pay applicable expenses.82025/5/8 17:06sec.gov/Archives/edgar/data/2061626/000121390025037812/ea0240078-s1_21shares.htmhttps:/www.sec.gov/Archives/edgar/data/2061626/000121390025037812/ea0240078-s1_21shares.htm
176、16/154 Custody of the Trusts Assets The Trusts Custodian will maintain custody of all of the Trusts SUI.The SUI Custodian provides insured safekeeping of digital assets using a multi-layer cold storage security platformdesigned to provide offline security of the digital assets held by the SUI Custod
177、ian.The SUI Custodian has insurance coverageas a subsidiary under its parent company,Coinbase Global,which procures fidelity(e.g.crime)insurance to protect theorganization from risks such as theft of funds.Specifically,the fidelity program provides coverage for the theft of funds held inhot or cold
178、storage.The insurance program is provided by a syndicate of industry-leading insurers.The insurance program doesnot cover,insure or guarantee the performance of the Trust.The SUI Custodian is not FDIC-insured.The insurance maintainedby the SUI Custodian is shared among all of the SUI Custodians cust
179、omers,is not specific to the Trust or to customers holdingSUI with the SUI Custodian,and may not be available or sufficient to protect the Trust from all possible losses or sources oflosses.SUI may be held across multiple wallets,any of which will feature the following safety and security measures t
180、o beimplemented by the SUI Custodian:Cold Storage:Cold storage in the context of SUI means keeping the reserve of SUI offline,which is a widely-usedsecurity precaution,especially when dealing with large amount of SUI.SUI held under custodianship with the SUICustodian will be kept in high-security,of
181、fline,multi-layer cold storage vaults.This means that the private keys,the cryptographic component that allows a user to access SUI,are stored offline onhardware that has never been connected to the internet.Storing the private key offline minimizes the risk of the SUIbeing stolen.The Sponsor expect
182、s that nearly all of the Trusts assets and private keys will be held in cold storage of theSUI Custodian on an ongoing basis.In connection with creations or redemptions,the Trust will,under mostcircumstances,process creations and redemptions by transferring SUI from its Cold Vault Balance to and/or
183、from a SUICounterparty.From time to time,portions of the Trusts SUI temporarily may be held outside of cold storage in theTrading Balance maintained by Coinbase,Inc.(the“Prime Broker”)or a SUI Counterparty,including in circumstancesin which it is necessary in connection with creations or redemptions
184、 of Baskets or to sell SUI to pay Trust expenses.Multiple Private Keys:All private keys are securely stored using multiple layers of high-quality encryption and inCustodian-owned offline hardware vaults in secure environments.No customers or third parties are given access to theSUI Custodians privat
185、e keys.The use of multiple private keys makes retrieving SUI from the wallet more difficult andaims to further reduce the risk of hacking theft and/or robbery.Whitelisting:Transactions are only sent to vetted,known addresses.The SUI Custodians platform supports pre-approval and test transactions.The
186、 SUI Custodian requires authentication when adding or removing addresses forwhitelisting.All instructions to initiate a whitelist addition or removal must be submitted via the Coinbase Custodyplatform.When a whitelist addition or removal request is initiated,the initiating user will be prompted to a
187、uthenticatetheir request using a two-factor authentication key.A consensus mechanism on the Coinbase Custody platform dictateshow many approvals are required in order for the consensus to be achieved to add or remove a whitelisted address.Only when the consensus is met is the underlying transaction
188、considered officially approved.An accounts roster anduser roles are maintained by the SUI Custodian in a separate log,an Authorized User List(“AUL”).Any changes to theaccounts roster must be reflected on an updated AUL first and executed by an authorized signatory.Audit Trails:Audit trails exist for
189、 all movement of SUI within Custodian-controlled SUI wallets and are auditedannually for accuracy and completeness by an independent external audit firm.In addition to the above measures,in accordance with the Custodial Services Agreement,SUI held in custody with the SUICustodian will be segregated
190、from both the proprietary property of the SUI Custodian and the assets of any other customer inaccounts that clearly identify the Trust as the owner of the accounts.Therefore,in the event of an insolvency of the SUICustodian,assets held in the segregated accounts would not become property of the SUI
191、 Custodians estate and would not beavailable to satisfy claims of creditors of the SUI Custodian.92025/5/8 17:06sec.gov/Archives/edgar/data/2061626/000121390025037812/ea0240078-s1_21shares.htmhttps:/www.sec.gov/Archives/edgar/data/2061626/000121390025037812/ea0240078-s1_21shares.htm17/154 The SUI Cu
192、stodian maintains an Internal Audit team that performs periodic internal audits over custody operations.Systemsand Organizational Control(“SOC”)attestations are also performed on the SUI Custodians services.The SOC 1 Type 2 andSOC 2 Type 2 reports produced cover private key management controls.A SOC
193、 1 Type 2 report addresses the controls at aservice organization that are likely to be relevant to user entities internal control over financial reporting.A SOC 2 Type 2 reportaddresses controls at a service organization relevant to security,availability,processing integrity,confidentiality,or priva
194、cy inorder to support users evaluations of their own systems of internal control.The Transfer Agent will facilitate the settlement of Shares in response to the placement of creation orders and redemptionorders from Authorized Participants.The Trust generally does not intend to hold cash or cash equi
195、valents.However,there maybe situations where the Trust will hold cash on a temporary basis,including in connection with the creation and redemptionprocess.The Trust has entered into the Cash Custody Agreement,pursuant to which the Cash Custodian will establish and maintaincash account(s)for the Trus
196、t and,upon instructions from the Sponsor acting on behalf of the Trust,facilitate cash transfers andcash payments from the Trusts account(s).For more information on the Trusts custody arrangements with the SUI Custodian and the Prime Broker,see“Custody ofthe Trusts Assets”and“Prime Broker”below.NAV
197、Determinations As described in more detail below in“NAV Determinations,”the Administrator daily calculates its net asset value(“NAV”)(which means the total assets of the Trust including,but not limited to,all SUI and cash less total liabilities of the Trust)andNAV per Share on each day that the Exch
198、ange is open for regular trading,as promptly as practical after 4:00 p.m.ET,based onthe Pricing Benchmark.In determining the Trusts NAV,the Administrator values the SUI held by the Trust based on the priceset by the Pricing Benchmark as of 4:00 p.m.ET.The Sponsor believes that use of the Pricing Ben
199、chmark mitigates againstidiosyncratic market risk,as the failure of any individual spot market will not materially impact pricing for the Trust.It alsoallows the Administrator to calculate the NAV in a manner that significantly deters manipulation.However,determining the value of the Trusts SUI usin
200、g the Pricing Benchmark is not in accordance with U.S.generallyaccepted accounting principles(“GAAP”),and therefore,the Pricing Benchmark is not used in the Trusts financial statements.The Trusts SUI are carried,for financial statement purposes,at fair value,as required by GAAP.The Trust determines
201、the fairvalue of SUI based on the price provided by the SUI market that the Trust considers its“principal market”as of 4:00 p.m.ET onthe valuation date.The NAV of the Trust determined on a GAAP basis is referred to in this Prospectus as a“Principal MarketNAV,”and the NAV of the Trust per Share deter
202、mined on a GAAP basis is referred to as“Principal Market NAV per Share.”NAV and NAV per Share are not measures calculated in accordance with GAAP and are not intended as a substitute for thePrincipal Market NAV and Principal Market NAV per Share,respectively.Plan of Distribution;Selling Shareholder
203、Barring the liquidation of the Trust or extraordinary circumstances(including but not limited to,non-recurring expenses andcosts of services performed by the Sponsor or a service provider on behalf of the Trust to protect the Trust or the interests ofShareholders,such as in connection with any fork
204、of the Sui Network,any indemnification of agents,service providers orcounterparties of the Trust and extraordinary legal fees and expenses,including any legal fees and expenses incurred inconnection with litigation,regulatory enforcement or investigation matters),the Trust will not purchase or sell
205、SUI other than inconnection with the creation and redemption of Shares.The Sponsor may also sell SUI to pay certain expenses,which may befacilitated by the Prime Broker or any other prime brokers with whom the Trust contracts.102025/5/8 17:06sec.gov/Archives/edgar/data/2061626/000121390025037812/ea0
206、240078-s1_21shares.htmhttps:/www.sec.gov/Archives/edgar/data/2061626/000121390025037812/ea0240078-s1_21shares.htm18/154 When the Trust sells or redeems its Shares,SUI will be transferred into or out of the Trust,as applicable,in exchange forBaskets that are based on the quantity of SUI attributable
207、to each Share of the Trust(net of accrued but unpaid Sponsor Fees(defined below)and any accrued but unpaid extraordinary expenses or liabilities).Authorized Participants will purchase Shares by depositing cash in the Trusts account with the Cash Custodian.This willcause the Sponsor,on behalf of the
208、Trust,to automatically instruct a SUI Counterparty to(i)purchase the amount of SUIequivalent in value to the cash deposit amount associated with the order and(ii)deposit the resulting SUI deposit amount in theTrusts account with the SUI Custodian,resulting in the Transfer Agent crediting the applica
209、ble amount of Shares to theAuthorized Participant.When such an Authorized Participant redeems its Shares,the Sponsor,on behalf of the Trust will direct the SUI Custodianto transfer SUI to the SUI Counterparty,who will sell the SUI to be executed,in the Sponsors reasonable efforts,at the PricingBench
210、mark price used by the Trust to calculate NAV,taking into account any spread,commissions,or other trading costs anddeposit the cash proceeds of such sale in the Trusts account with the Cash Custodian for settlement with the AuthorizedParticipant.Any slippage incurred(including,but not limited to,any
211、 trading fees,spreads,or commissions),on a cash equivalentbasis,will be the responsibility of the Authorized Participant and not of the Trust or Sponsor.The Trust and/or Sponsor will bear the expense and risk of delivery and ownership of SUI once such SUI has been receivedby the SUI Custodian on beh
212、alf of the Trust and until transferred by the SUI Custodian on behalf of the Trust to the SUICounterparty for conversion to cash.Only Authorized Participants may purchase Shares from or redeem Shares to the Trust.Authorized Participants may thenoffer Shares to the public at prices that depend on var
213、ious factors,including the supply and demand for Shares,the value of theTrusts assets,and market conditions at the time of a transaction.Shareholders who buy or sell Shares during the day from theirbroker may do so at a premium or discount relative to the NAV of the Shares of the Trust.Shareholders
214、who decide to buy or sell Shares of the Trust will place their trade orders through their brokers and will incurcustomary brokerage commissions and charges.Prior to this offering,there has been no public market for the Shares.The Sharesare expected to be listed for trading,subject to notice of issua
215、nce,on the Exchange under the ticker symbol“”.The Sponsor may enter into marketing support arrangements with respect to the Trust,to which the Trust would not beparty.Any fees under such agreements would be payable by the Sponsor,as applicable,and not by the Trust.Federal Income Tax Considerations I
216、t is expected that an owner of Shares will be treated,for U.S.federal income tax purposes,as if they owned a proportionateshare of the assets of the Trust.A shareholder will accordingly include in the computation of their taxable income theirproportionate share of the income and expenses realized by
217、 the Trust.Each sale or other disposition of SUI by the Trust(including,under current Internal Revenue Service(“IRS”)guidance,the use of SUI to pay expenses of the Trust)will give riseto gain or loss and will therefore constitute a taxable event for Shareholders.See“United States Federal Income TaxC
218、onsequences Taxation of U.S.Shareholders.”Use of Proceeds Proceeds received by the Trust from the issuance of Baskets consist of SUI.Such deposits are held by the SUI Custodian onbehalf of the Trust until(i)delivered out in connection with redemptions of Baskets;or(ii)transferred or sold by the Spon
219、sor,which may be facilitated by the SUI Custodian,to pay fees due to the Sponsor and Trust expenses and liabilities not assumed bythe Sponsor.112025/5/8 17:06sec.gov/Archives/edgar/data/2061626/000121390025037812/ea0240078-s1_21shares.htmhttps:/www.sec.gov/Archives/edgar/data/2061626/000121390025037
220、812/ea0240078-s1_21shares.htm19/154 Emerging Growth Company The Trust is an“emerging growth company”as defined in the Jumpstart Our Business Startups Act of 2012(the“JOBSAct”).For as long as the Trust is an emerging growth company,unlike other public companies,it will not be required to,amongother t
221、hings:(i)provide an auditors attestation report on managements assessment of the effectiveness of our system of internalcontrol over financial reporting pursuant to Section 404(b)of the Sarbanes-Oxley Act of 2002;or(ii)comply with any new auditrules adopted by the Public Company Accounting Oversight
222、 Board(“PCAOB”)after April 5,2012,unless the SEC determinesotherwise.The Trust will cease to be an“emerging growth company”upon the earliest of(i)it having$1.235 billion or more in annualrevenues,(ii)at least$700 million in market value of Common Shares being held by non-affiliates,(iii)it issuing m
223、ore than$1.0 billion of non-convertible debt over a three-year period or(iv)the last day of the fiscal year following the fifth anniversaryof its initial public offering.In addition,Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of theextended transition
224、 period provided in Section 7(a)(2)(B)of the 1933 Act for complying with new or revised accountingstandards.In other words,an emerging growth company can delay the adoption of certain accounting standards until thosestandards would otherwise apply to private companies.The Trust intends to take advan
225、tage of the benefits of the extendedtransition period.Principal Investment Risks of an Investment in the Trust An investment in the Trust involves a high degree of risk.Any investment made in the Trust may result in a total loss of theinvestment.There is no assurance that the Trust will generate a p
226、rofit for investors.Some of the risks you may face aresummarized below.A more extensive discussion of these risks appears beginning on page 15.Risks Associated with SUI and the Sui Network:The value of the Shares relates directly to the price of SUI,which may be highly volatile and subject to fluctu
227、ations dueto a number of factors.SUI is a relatively new technological innovation with a limited operating history.The Sui Networks distributed governance structure may negatively affect its ability to grow and respond to challenges.Newly created SUI and their subsequent sale may cause the price of
228、SUI to decline,which could negatively affect aninvestment in the Trust.The prevailing level of transaction fees and the speed at which transactions are settled on may adversely the SuiNetwork.The significant holdings of SUI by early stakeholders could have an adverse effect on the price of SUI.A det
229、ermination that SUI or any other digital asset is offered and sold as a“security”may adversely affect the price ofSUI and the value of the Shares,and result in potentially extraordinary,nonrecurring expenses to,or termination of,theTrust.The trading prices of many digital assets,including SUI,have e
230、xperienced extreme volatility in recent periods and maycontinue to do so.Extreme volatility in the future,including further decline in the trading prices of SUI,could have amaterial adverse effect on the value of the Shares and the Shares could lose all or substantially all of their value.122025/5/8
231、 17:06sec.gov/Archives/edgar/data/2061626/000121390025037812/ea0240078-s1_21shares.htmhttps:/www.sec.gov/Archives/edgar/data/2061626/000121390025037812/ea0240078-s1_21shares.htm20/154 A temporary or permanent“fork”or a“clone”could adversely affect the value of the Shares.Spot markets on which SUI tr
232、ades are relatively new and largely unregulated.Authorized Participants may act in the same or similar capacity for other competing products.Spot markets may be exposed to security breaches,fraud and market manipulation,wash trading and front-running.Risks Associated with Investing in the Trust The
233、value of the Shares may be influenced by a variety of factors unrelated to the value of SUI.The NAV or Principal Market NAV may not always correspond to the market price of SUI and,as a result,CreationBaskets may be created or redeemed at a value that is different from the market price of the Shares
234、.The inability of Authorized Participants and market makers to hedge their SUI exposure may adversely affect theliquidity of Shares and the value of an investment in the Shares.The Trust is subject to risks due to its concentration of investments in a single asset.Possible illiquid markets may exace
235、rbate losses or increase the variability between the Trusts NAV or the PrincipalMarket NAV and its market price.The amount of SUI represented by the Shares will decline over time.The Administrator is solely responsible for determining the value of the SUI holdings and SUI holdings per Share,andany e
236、rrors,discontinuance or changes in such valuation calculations may have an adverse effect on the value of theShares.The use of cash creations and redemptions,as opposed to in-kind creations and redemptions,may adversely affect thearbitrage transactions by Authorized Participants intended to keep the
237、 price of the Shares closely linked to the price ofSUI and,as a result,the price of the Shares may fall or otherwise diverge from NAV.If the process of creation and redemption of Baskets encounters any unanticipated difficulties,the possibility forarbitrage transactions by Authorized Participants in
238、tended to keep the price of the Shares closely linked to the price ofSUI may not exist and,as a result,the price of the Shares may fall or otherwise diverge from NAV.Risks Associated with the Regulatory Environment of SUI Future and current regulations by a United States or foreign government or qua
239、si-governmental agency could have anadverse effect on an investment in the Trust,and SUI status as being offered or sold as a“security”under U.S.federalsecurities laws remains unsettled.Shareholders do not have the protections associated with ownership of Shares in an investment company registeredun
240、der the Investment Company Act of 1940(“1940 Act”)or the protections afforded by the Commodity Exchange Act(the“CEA”).132025/5/8 17:06sec.gov/Archives/edgar/data/2061626/000121390025037812/ea0240078-s1_21shares.htmhttps:/www.sec.gov/Archives/edgar/data/2061626/000121390025037812/ea0240078-s1_21share
241、s.htm21/154 Future legal or regulatory developments may negatively affect the value of SUI or require the Trust or the Sponsor tobecome registered with the SEC or Commodity Futures Trading Commission(“CFTC”),which may cause the Trust toincur unforeseen expenses or liquidate.If regulatory changes or
242、interpretations of an Authorized Participants,the Trusts or the Sponsors activities require theregulation of an Authorized Participant,the Trust or the Sponsor as a money service business under the regulationspromulgated by the Financial Crimes Enforcement Network(“FinCEN”),an Authorized Participant
243、,the Trust or theSponsor may be required to register and comply with such regulations,which could result in extraordinary,recurringand/or nonrecurring expenses.Risks Associated with the Tax Treatment of SUI Shareholders could incur a tax liability without an associated distribution of the Trust.The
244、tax treatment of SUI and transactions involving SUI for state and local tax purposes is not settled.A hard“fork”of the Sui Network blockchain could result in Shareholders incurring a tax liability.The tax treatment of SUI and transactions involving SUI for United States federal income tax purposes m
245、ay change.Other Risks The Exchange on which the Shares are listed may halt trading in the Trusts Shares,which would adversely impact aShareholders ability to sell Shares.The market infrastructure of the SUI spot market could result in the absence of active Authorized Participants able tosupport the
246、trading activity of the Trust,which would affect the liquidity of the Shares in the secondary market andmake it difficult to dispose of Shares.Shareholders that are not Authorized Participants may only purchase or sell their Shares in secondary trading markets,and the conditions associated with trad
247、ing in secondary markets may adversely affect Shareholders investment in theShares.The Sponsor is leanly staffed and relies heavily on key personnel.The departure of any such key personnel couldnegatively impact the Trusts operations and adversely impact an investment in the Trust.Shareholders do no
248、t have the rights enjoyed by investors in certain other vehicles and may be adversely affected by alack of statutory rights and by limited voting and distribution rights.In certain circumstances,Shareholders may vote toappoint a successor Sponsor following the Voluntary Withdrawal of the Sponsor,or
249、to continue the Trust in certaininstances of dissolution of the Trust.Shareholders shall otherwise have no voting rights with respect to the Trust.The liability of the Sponsor and the Trustee is limited,and the value of the Shares will be adversely affected if the Trustis required to indemnify the T
250、rustee or the Sponsor.Due to the increased use of technologies,intentional and unintentional cyber-attacks pose operational and informationsecurity risks,the occurrence of which can negatively impact an investment in the Trust.142025/5/8 17:06sec.gov/Archives/edgar/data/2061626/000121390025037812/ea
251、0240078-s1_21shares.htmhttps:/www.sec.gov/Archives/edgar/data/2061626/000121390025037812/ea0240078-s1_21shares.htm22/154 RISK FACTORS You should consider carefully the risks described below before making an investment decision.You should also refer to theother information included in this Prospectus
252、,as well as information found in documents incorporated by reference in thisProspectus,before you decide to purchase any Shares.These risk factors may be amended,supplemented or superseded from timeto time by risk factors contained in any periodic report,prospectus supplement,post-effective amendmen
253、t or in other reports filedwith the SEC in the future.See“Glossary of Defined Terms”for an explanation of certain industry and technical terms used in thisProspectus.Risks Associated with SUI and the Sui Network The value of the Shares relates directly to the price of SUI,which may be highly volatil
254、e and subject to fluctuations due to anumber of factors.The value of the Shares relates directly to the value of the SUI held by the Trust and fluctuations in the price of SUI couldadversely affect the value of the Shares.The market price of SUI may be highly volatile,and subject to a number of fact
255、ors,including:an increase in the SUI supply that is publicly available for trading;manipulative trading activity on digital asset trading platforms,which,in many cases,are largely unregulated or may notbe complying with existing regulations;the adoption of SUI as a medium of exchange,store-of-value
256、or other consumptive asset and the maintenance anddevelopment of the open-source software protocol of the Sui Network;forks in the Sui Network;falling demand for SUI,or demand that does not keep pace with gradual unlocking of SUI;delays or flaws in the execution of the Sui Networks expansion or adop
257、tion plans for SUI;the failure of one or more of SUIs strategic partnerships with one or more institutional players;the failure of,or perceptions of risk or negative publicity around one or more of the protocols based on the Sui Network orthat make use of SUI;investors expectations with respect to i
258、nterest rates and rates of inflation experienced by fiat currencies or digital assets(including,in particular,SUI);consumer preferences and perceptions of SUI specifically and digital assets generally;fiat currency withdrawal and deposit policies on digital asset trading platforms;the liquidity of d
259、igital asset trading platforms and any increase or decrease in trading volume on digital asset tradingplatforms;investment and trading activities of large investors that invest directly or indirectly in SUI;152025/5/8 17:06sec.gov/Archives/edgar/data/2061626/000121390025037812/ea0240078-s1_21shares.
260、htmhttps:/www.sec.gov/Archives/edgar/data/2061626/000121390025037812/ea0240078-s1_21shares.htm23/154 a“short squeeze”resulting from speculation on the price of SUI,if aggregate short exposure exceeds the number ofShares available for purchase;a final determination that SUI is offered and sold as a s
261、ecurity or changes in SUIs status under the federal securities laws;monetary policies of governments,trade restrictions,currency devaluations and revaluations and regulatory measures orenforcement actions,if any,that restrict the use of SUI or the purchase of SUI on digital asset trading platforms;g
262、lobal or regional political,economic or financial conditions,events and situations,such as the novel coronavirusoutbreak;fees associated with processing a SUI transaction and the speed at which transactions are settled on the Sui Network;interruptions in service from or closures or failures of major
263、 digital asset trading platforms;decreased confidence in digital asset trading platforms due to the unregulated nature and lack of transparency surroundingthe operations of digital asset trading platforms;smart contracts are new and their ongoing development and operation may result in problems or b
264、e subject to errors orhacks;increased competition from other digital assets or other forms of blockchain-based services;and the Trusts own acquisitions or dispositions of SUI,since there is no limit on the number of SUI that the Trust mayacquire.In addition,there is no assurance that SUI will mainta
265、in its value in the long or intermediate term.In the event that the price ofSUI declines,the Sponsor expects the value of the Shares to decline proportionately.The value of SUI as represented by the PricingBenchmark or by the Trusts principal market may also be subject to momentum pricing due to spe
266、culation regarding futureappreciation in value,leading to greater volatility that could adversely affect the value of the Shares.Momentum pricing typicallyis associated with growth stocks and other assets whose valuation,as determined by the investing public,accounts for futureappreciation in value,
267、if any.The Sponsor believes that momentum pricing of SUI has resulted,and may continue to result,inspeculation regarding future appreciation in the price of SUI,inflating and making the price of SUI more volatile.As a result,SUImay be more likely to fluctuate in value due to changing investor confid
268、ence,which could impact future appreciation ordepreciation in the Pricing Benchmark and could adversely affect the value of the Shares.162025/5/8 17:06sec.gov/Archives/edgar/data/2061626/000121390025037812/ea0240078-s1_21shares.htmhttps:/www.sec.gov/Archives/edgar/data/2061626/000121390025037812/ea0
269、240078-s1_21shares.htm24/154 The Sui protocol was only conceived in 2021 and the Sui protocol or its Narwhal memory pool or Bullshark consensusmechanism may not function as intended,which could have an adverse impact on the value of SUI and an investment inthe Shares.Components of the Sui protocol w
270、ere first conceived in 2021 by Evan Cheng,Adeniyi Abiodun,Sam Blackshear,GeorgeDanezis,and Kostas Chalkias to continue research performed while employed by Meta on the Diem(previously called Libra)project.The Sui Network uses the Narwhal memory pool and the Bullshark protocol for transaction process
271、ing.In Narwhal,insteadof a proposing validator sending all transactions in a block to the other validators,they send references to transactions that othervalidators have already received.The transaction data can thus bypass the consensus process,removing the large data transmissionstep which often i
272、mpedes proof-of-stake consensus and introduces latency.Further unlike traditional blockchains,which addtransactions in a single,linear sequence,Bullshark uses a structure whereby each transaction points to multiple previoustransactions,allowing many transactions to be processed at the same time.Both
273、 Narwhal and Bullshark are new blockchaintechnologies that are not widely used.Narwhal or Bullshark may not function as intended.For example,they may require morespecialized equipment to participate in the network,may fail to attract a significant number of users,may be adversely affected bynegative
274、 publicity surrounding real or perceived errors or failures or sub-optimal functioning of one or both of Narwhal orBullshark.In addition,there may be flaws in the cryptography underlying Narwhal or Bullshark,including flaws that affect thefunctionality of the Sui Network or make the network vulnerab
275、le to attack.The development of the Sui Network is ongoing andany further disruption could have a material adverse effect on the value of SUI and an investment in the Shares.Newly created SUI and their subsequent sale may cause the price of SUI to decline,which could negatively affect aninvestment i
276、n the Trust.Newly created SUI are generated through a process referred to as“staking”which is when an actor on the Sui Networkacquires SUI and then pledges that SUI as collateral.This collateral is then put at risk in exchange for the validator collectingrewards for services rendered to the Sui Netw
277、ork in the process of forming consensus and adding blocks to the blockchain.Whenthe recipient makes newly minted SUI available for sale,there can be downward pressure on the price of SUI as the new supply isintroduced into the SUI market.The Sui Network contains features several deflationary measure
278、s.The total number of SUI that can ever be created is cappedat 10,000,000,000(ten billion).Because the supply of SUI is capped,increased activity on the network has a deflationary effect asthe Sui Networks Storage Fund grows in relation to the amount of data stored,which effectively takes more SUI o
279、ut of circulation.The store of value for SUI increases in relation to the decrease in circulating supply,with the aim of promoting long-terminvestment in SUI for a strong network into the future.However,if demand for SUI is lower than expected,these deflationarymeasures may be insufficient to check
280、any decline the price of SUI.The prevailing level of transaction fees may adversely affect the usage of the Sui Network.SUI has a fixed total supply of 10 billion tokens,meaning no additional SUI will be minted beyond this limit.While the totalsupply was created at the genesis of the Sui Network,onl
281、y a portion of SUI was initially put into circulation,with the remainingtokens being released over time according to predefined schedules.Because the total number of SUI in circulation will increase astokens are distributed through staking rewards,ecosystem incentives,and other allocations,market co
282、nditions may influence theperceived value of SUI over time.The rate at which additional SUI enters circulation is structured to promote network stability,security,and long-term sustainability.Unlike digital assets with an inflationary supply model,SUIs fixed supply introduces adegree of scarcity,whi
283、ch may impact its long-term market dynamics.However,the gradual release or unlocking of previouslyuncirculated SUI could still influence liquidity,market price,and overall investment considerations.There is no assurance that therate of token release will align with demand at any given time,and futur
284、e changes in market conditions or governance decisionscould affect the valuation and liquidity of SUI.172025/5/8 17:06sec.gov/Archives/edgar/data/2061626/000121390025037812/ea0240078-s1_21shares.htmhttps:/www.sec.gov/Archives/edgar/data/2061626/000121390025037812/ea0240078-s1_21shares.htm25/154 The
285、Sui Network splits gas fees into two parts:computational fees and storage fees.Computational fees cover the cost ofprocessing transactions,set by validators each epoch through a reference price.Storage fees,paid upfront when creating orchanging objects,go into a storage funda pool that compensates v
286、alidators for keeping data on-chain long-term.If users deleteunneeded data,they receive a rebate from this storage fund.If either of these fees is perceived as being excessively high,users mayreduce or limit their use of the Sui Network,adversely affecting the value of SUI and the Shares.The signifi
287、cant holdings of SUI by early stakeholders could have an adverse effect on the market price of SUI.If early stakeholders hold a large portion of the SUI supply,it could lead to concerns about centralization.Despite escrowmechanisms that gradually release SUI into the market,early stakeholders could
288、still retain control over a significant portion ofSUI,which can impact market dynamics if large amounts are sold.The concentration of SUI in the hands of early stakeholderscould affect the markets confidence in SUI as a digital asset.A determination that SUI or any other digital asset is offered and
289、 sold as a“security”may adversely affect the price of SUIand the value of the Shares,and result in potentially extraordinary,nonrecurring expenses to,or termination of,the Trust.Depending on its characteristics,a digital asset,including SUI,may be considered to be offered and sold as a“security”unde
290、rU.S.federal securities laws.The tests for determining whether a particular digital asset is offered and sold as a“security”arecomplex and difficult to apply,and the outcome is difficult to predict.Public,though non-binding,statements by senior officials atthe SEC have indicated that the SEC does no
291、t currently consider bitcoin to be offered and sold as a security.The SEC staff has alsoprovided informal assurances via no-action letter to a handful of promoters that their digital assets are not securities.On the other hand,the SEC has brought enforcement actions against the issuers and promoters
292、 of several other digital assets onthe basis that the digital assets in question are securities.More recently,the SEC has also brought enforcement actions againstdigital asset trading platforms for allegedly operating unregistered securities exchanges on the basis that certain of the digital assetst
293、raded on their platforms are securities,although one or more of these actions has since been dismissed following a joint stipulationbetween the SEC and the entities allegedly operating an exchange.SEC and other government or regulatory enforcement actionshave led,and may in the future lead,to furthe
294、r volatility in digital asset prices.Whether a digital asset is offered and sold as a security under the U.S.federal securities laws depends on whether it is includedin the lists of instruments making up the definition of“security”in the 1933 Act,the Exchange Act and the 1940 Act.Digital assetsdo no
295、t appear in any of these lists,although each list includes the terms“investment contract”and“note,”and the SEC hastypically analyzed whether a particular digital asset is offered and sold as a security by reference to whether it meets the testsdeveloped by the federal courts interpreting these terms
296、,known as the“Howey”and“Reves”tests,respectively.For many digitalassets,whether or not the Howey or Reves tests are met is difficult to resolve definitively,and substantial legal arguments can oftenbe made both in favor of and against a particular digital asset qualifying as being offered and sold a
297、s a security under one or both ofthe Howey and Reves tests.Adding to the complexity,the SEC staff has indicated that the security status of a particular digital assetcan change over time as the relevant facts evolve.If the Sponsor determines that SUI is offered and sold as a security under the U.S.f
298、ederal securities laws,whether thatdetermination is initially made by the Sponsor itself,or because a federal court upholds an allegation that SUI is offered and sold asa security,the Sponsor does not intend to permit the Trust to continue holding SUI in a way that would violate the federal securiti
299、eslaws(and therefore would either dissolve the Trust or potentially seek to operate the Trust in a manner that complies with thefederal securities laws,including the 1940 Act).182025/5/8 17:06sec.gov/Archives/edgar/data/2061626/000121390025037812/ea0240078-s1_21shares.htmhttps:/www.sec.gov/Archives/
300、edgar/data/2061626/000121390025037812/ea0240078-s1_21shares.htm26/154 Any enforcement action by the SEC or a state securities regulator asserting that SUI is offered and sold as a security,or a courtdecision to that effect,would be expected to have an immediate material adverse impact on the trading
301、 price of SUI,as well as theShares.This is because the business models behind most digital assets are incompatible with regulations applying to transactions insecurities.If a digital asset is determined to be offered and sold as a security,it is likely to become difficult or impossible for thedigita
302、l asset to be traded,cleared or custodied in the United States through the same channels used by non-security digital assets,which in addition to materially and adversely affecting the trading value of the digital asset is likely to significantly impact itsliquidity and market participants ability t
303、o convert the digital asset into U.S.dollars.Any assertion that a digital asset is offeredand sold a security by the SEC or another regulatory authority may have similar effects.If SUI is found by a court or other regulatory body to be offered and sold as a security,the Trust could be considered anu
304、nregistered“investment company”under the 1940 Act,which could necessitate the Trusts liquidation under the terms of the TrustAgreement.Furthermore,the Trust could be considered to be engaged in a distribution(i.e.,a public offering)of unregisteredsecurities in violation of Section 5 of the 1933 Act,
305、which could impose significant civil and criminal liability on the Trust.There isno guarantee that a court of regulatory body will agree with the Trusts assessment of SUI as a non-security.Moreover,whether or not the Sponsor or the Trust were subject to additional regulatory requirements as a result
306、 of anydetermination that its assets include securities,the Sponsor may nevertheless decide to terminate the Trust,in order,if possible,toliquidate the Trusts assets while a liquid market still exists.If the SEC or a federal court were to determine that SUI is offered andsold as a security,it is lik
307、ely that the value of the Shares of the Trust would decline significantly.Furthermore,if a federal courtupholds an allegation that SUI is offered and sold as a security,the Trust itself may be terminated and,if practical,its assetsliquidated.The trading prices of many digital assets,including SUI,ha
308、ve experienced extreme volatility in recent periods and maycontinue to do so.Extreme volatility in the future,including further decline in the trading prices of SUI,could have amaterial adverse effect on the value of the Shares and the Shares could lose all or substantially all of their value.The tr
309、ading prices of many digital assets,including SUI,have experienced extreme volatility in recent periods and maycontinue to do so.For instance,there were steep increases in the value of certain digital assets over the course of 2021,andmultiple market observers asserted that digital assets were exper
310、iencing a“bubble.”These increases were followed by steepdrawdowns throughout 2022 in digital asset trading prices.SUI was launched in May 2023,and over the course of 2023 and 2024,prices of digital assets continued to exhibit extreme volatility.Extreme volatility may persist,and the value of the Sha
311、res may significantly decline in the future without recovery.The digitalasset markets may still be experiencing a bubble or may experience a bubble again in the future.For example,in the first half of2022,each of Celsius Network,Voyager Digital Ltd.,and Three Arrows Capital declared bankruptcy,resul
312、ting in a loss ofconfidence in participants of the digital asset ecosystem and negative publicity surrounding digital assets more broadly.InNovember 2022,FTX Trading Ltd.(“FTX”)one of the largest digital asset exchanges by volume at the time,halted customerwithdrawals amid rumors of the companys liq
313、uidity issues and likely insolvency,which were subsequently corroborated by itsCEO.Shortly thereafter,FTXs CEO resigned,and FTX and many of its affiliates filed for bankruptcy in the United States,whileother affiliates have entered insolvency,liquidation,or similar proceedings around the globe,follo
314、wing which the U.S.Departmentof Justice brought criminal fraud and other charges,and the SEC and CFTC brought civil securities and commodities fraudcharges,against certain of FTXs and its affiliates senior executives,including its former CEO,who was found guilty of thesecriminal charges in November
315、2023.In addition,several other entities in the digital asset industry filed for bankruptcy followingFTXs bankruptcy filing,such as BlockFi Inc.and Genesis Global Capital,LLC(“Genesis”).In response to these events(collectively,the“2022 Events”),the digital asset markets have experienced extreme price
316、 volatility and other entities in the digitalasset industry have been,and may continue to be,negatively affected,further undermining confidence in the digital asset markets.These events have also negatively impacted the liquidity of the digital asset markets as certain entities affiliated with FTX e
317、ngagedin significant trading activity.If the liquidity of the digital asset markets continues to be negatively impacted by these events,digital asset prices,including SUI,may continue to experience significant volatility or price declines,and confidence in the digitalasset markets may be further und
318、ermined.In addition,regulatory and enforcement scrutiny has been significant,including from,among others,the U.S.Department of Justice,the SEC,the CFTC,the White House and Congress,as well as state regulators andauthorities.It is not possible to predict at this time all of the risks that they may po
319、se to the Trust,its service providers or to thedigital asset industry as a whole.192025/5/8 17:06sec.gov/Archives/edgar/data/2061626/000121390025037812/ea0240078-s1_21shares.htmhttps:/www.sec.gov/Archives/edgar/data/2061626/000121390025037812/ea0240078-s1_21shares.htm27/154 Extreme volatility in the
320、 future,including further declines in the trading prices of SUI,could have a material adverse effect onthe value of the Shares,and the Shares could lose all or substantially all of their value.The Trust is not actively managed and willnot take any actions to take advantage,or mitigate the impacts,of
321、 volatility in the price of SUI.Spot markets on which SUI trades are relatively new and largely unregulated.Digital asset markets,including spot markets for SUI,are growing rapidly.The spot markets through which SUI and otherdigital assets trade are new and,in some cases,may be subject to but not co
322、mply with their relevant jurisdictions regulations.These markets are local,national and international and include a broadening range of digital assets and participants.Significanttrading may occur on systems and platforms with minimum predictability.Spot markets may impose daily,weekly,monthly orcus
323、tomer-specific transaction or withdrawal limits or suspend withdrawals entirely,rendering the exchange of SUI for fiat currencydifficult or impossible.Participation in spot markets requires users to take on credit risk by transferring SUI from a personalaccount to a third partys account.Digital asse
324、t exchanges do not appear to be subject to,or may not comply with,regulation in a similar manner as otherregulated trading platforms,such as national securities exchanges or designated contract markets.Many digital asset exchanges areunlicensed,unregulated,operate without extensive supervision by go
325、vernmental authorities,and do not provide the public withsignificant information regarding their ownership structure,management team,corporate practices,cybersecurity,and regulatorycompliance.In particular,those located outside the United States may be subject to significantly less stringent regulat
326、ory andcompliance requirements in their local jurisdictions.As a result,trading activity on or reported by these digital asset exchanges is generally significantly less regulated than tradingin regulated U.S.securities and commodities markets,and may reflect behavior that would be prohibited in regu
327、lated U.S.tradingvenues.Furthermore,many spot markets lack certain safeguards put in place by more traditional exchanges to enhance the stabilityof trading on the exchange and prevent flash crashes,such as limit-down circuit breakers.As a result,the prices of digital assetssuch as SUI on digital ass
328、et exchanges may be subject to larger and/or more frequent sudden declines than assets traded on moretraditional exchanges.Tools to detect and deter fraudulent or manipulative trading activities(such as market manipulation,front-running of trades,and wash-trading)may not be available to or employed
329、by digital asset exchanges or may not exist at all.As aresult,the marketplace may lose confidence in,or may experience problems relating to,these venues.No SUI exchange is immune from these risks.While the Trust itself does not buy or sell SUI on SUI spot markets,the closureor temporary shutdown of
330、SUI exchanges due to fraud,business failure,hackers or malware,or government-mandated regulationmay reduce confidence in the Sui Network and can slow down the mass adoption of SUI.Further,spot market failures or that ofany other major component of the overall SUI ecosystem can have an adverse effect
331、 on SUI markets and the price of SUI and couldtherefore have a negative impact on the performance of the Trust.Negative perception,a lack of stability in the SUI spot markets,manipulation of SUI spot markets by customers and/or theclosure or temporary shutdown of such exchanges due to fraud,business
332、 failure,hackers or malware,or government-mandatedregulation may reduce confidence in SUI generally and result in greater volatility in the market price of SUI and the Shares of theTrust.Furthermore,the closure or temporary shutdown of a SUI spot market may impact the Trusts ability to determine the
333、 valueof its SUI holdings or for the Trusts Authorized Participants to effectively arbitrage the Trusts Shares.202025/5/8 17:06sec.gov/Archives/edgar/data/2061626/000121390025037812/ea0240078-s1_21shares.htmhttps:/www.sec.gov/Archives/edgar/data/2061626/000121390025037812/ea0240078-s1_21shares.htm28/154 Authorized Participants may act in the same or similar capacity for other competing products.Au
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