Bitwise 10 Crypto Index ETF

Previous wording

Prices of Crypto Assets have fluctuated widely for a variety of reasons, including negative perception and a lack of stability and standardized regulation in the Crypto Asset economy and may continue to experience significant price fluctuations. Since the inception of the Trust, volatility has had a significant impact on the fair market value of the Portfolio Crypto Assets, to date resulting in a large positive change in the Trust’s net realized and unrealized gain on investment in Crypto Assets, but also periods of significant negative changes. For example, Bitcoin’s average price has seen significant volatility over recent years. From the Trust’s inception on November 22, 2017, through the end of 2018, the average price was $8,119.40 per Bitcoin. It climbed to $11,107.74 in 2020, followed by a substantial surge to $47,422.06 in 2021. However, the average dropped to $28,197.75 in 2022 and remained relatively stable at $28,836.24 in 2023. In 2024, the average price has hovered around $29,000 through December, but recent developments have driven sharp increases. In March 2024, Bitcoin reached a then all-time high of $73,737.94, fueled by record inflows into Spot Bitcoin ETFs and rising investor enthusiasm. More recently, on January 20, 2025, Bitcoin hit another record high of $109,114.88. There can be no assurance, however, that ongoing volatility will continue to positively impact the value of the Portfolio Crypto Assets. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Historical Portfolio Crypto Asset Prices."

Current wording

Prices of Crypto Assets have fluctuated widely for a variety of reasons, including negative perception and a lack of stability and standardized regulation in the Crypto Asset economy and may continue to experience significant price fluctuations. Since the inception of the Trust, volatility has had a significant impact on the fair market value of the Portfolio Crypto Assets, to date resulting in a large positive change in the Trust’s net realized and unrealized gain on investment in Crypto Assets, but also periods of significant negative changes. For example, Bitcoin’s average price has seen significant volatility over recent years. From the Trust’s inception on November 22, 2017, through the end of 2018, the average price was $8,119.40 per Bitcoin. It climbed to $11,107.74 in 2020, followed by a substantial surge to $47,422.06 in 2021. However, the average dropped to $28,197.75 in 2022 and remained relatively stable at $28,836.24 in 2023. In 2025, the average price has hovered around $101,625.05. Bitcoin reached an all-time high of $125,492.00 on October 6, 2025, fueled by continued inflows into Spot Bitcoin ETFs and rising investor enthusiasm. However since then, Bitcoin’s price has fallen 47.74% to $65,586.99 as of February 27, 2026. Given ongoing volatility, there can be no assurance that bitcoin will continue to positively impact the value of the Portfolio Crypto Assets. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Historical Portfolio Crypto Asset Prices.”

Previous wording

These risks also apply to other Crypto Asset trading venues, including over-the-counter markets and derivatives platforms, which may be used by Crypto Asset exchanges and therefore by the Sponsor in calculating the net asset value of the Trust. The Trust aims to minimize exposure to individual exchange disruptions by using multiple data sources and liquidity providers. However, despite efforts to ensure accurate pricing, the Trust remains subject to market volatility affecting Crypto Asset prices. A decline in active exchanges could adversely impact on the value of Crypto Assets and an investment in the Trust.

Current wording

These risks also apply to other Crypto Asset trading venues, including over-the-counter markets and derivatives platforms, which may be used by Crypto Asset exchanges and therefore by the Sponsor in calculating the NAV of the Trust. The Trust aims to minimize exposure to individual exchange disruptions by using multiple data sources and liquidity providers. However, despite efforts to ensure accurate pricing, the Trust remains subject to market volatility affecting Crypto Asset prices. A decline in active exchanges could adversely impact on the value of Crypto Assets and an investment in the Trust.

Previous wording

In addition, some have argued that certain stablecoins, particularly Tether, are improperly issued without sufficient backing in a way that, when the stablecoin is used to pay for Crypto Assets such as Ether, could cause artificial rather than genuine demand for Ether, potentially inflating the price of Ether or other Crypto Assets. Critics also argue that those associated with certain stablecoins may be involved in money laundering. On February 17, 2021, the New York Attorney General entered into an agreement with Tether’s operators, requiring them to cease any further trading activity with New York persons and pay $18.5 million in penalties for false and misleading statements made regarding the assets backing Tether. On October 15, 2021, the CFTC announced a settlement with Tether’s operators in which they agreed to pay $42.5 million in fines to settle charges that, among others, Tether’s claims that it maintained sufficient U.S. dollar reserves to back every Tether stablecoin in circulation with the “equivalent amount of corresponding fiat currency” held by Tether were untrue. In addition, a large amount of Tether is issued as ERC-20 tokens on the Ethereum network. If Tether were to no longer be issued or to cease operating on the Ethereum network, demand for Ether used to pay gas fees for ERC-20 Tether transactions, and a substantial source of demand for Ether, could decline, which may cause the price of Ether to decrease. Any material decrease in the value of Ether could negatively affect the value of the Shares. In addition, concerns persist about the adequacy and transparency of Tether’s reserves, which could influence the stability and perception of Crypto Assets, including Portfolio Crypto Assets.

Current wording

In addition, some regulators have argued that certain stablecoins, particularly Tether, are improperly issued without sufficient backing in a way that, when the stablecoin is used to pay for Crypto Assets such as Ether, could cause artificial rather than genuine demand for Ether, potentially inflating the price of Ether or other Crypto Assets. Critics also argue that those associated with certain stablecoins may be involved in money laundering or evading sanctions. On February 23, 2021, the New York Attorney General announced a settlement with Tether’s operators, requiring them to cease any further trading activity with New York persons and pay $18.5 million in penalties for false and misleading statements made regarding the assets backing Tether. On October 15, 2021, the CFTC announced a settlement with Tether’s operators in which they agreed to pay $42.5 million in fines to settle charges that, among others, Tether’s claims that it maintained sufficient U.S. dollar reserves to back every Tether stablecoin in circulation with the “equivalent amount of corresponding fiat currency” held by Tether were untrue. In addition, in June 2025, the U.S. Department of Justice (“DOJ”) announced an action to recover approximately $225.3 million in USDT linked to alleged cryptocurrency investment scams, and, in January 2026, the DOJ announced charges alleging that USDT and other crypto assets were used to launder proceeds of corruption. These and similar regulatory, supervisory, and law-enforcement actions may result in the freezing, seizure, delisting, or reduced utility of particular stablecoins, which could reduce liquidity in bitcoin markets and adversely affect the price of the Crypto Assets and, in turn, the value of the Shares.

Previous wording

While USDC is designed to maintain a stable value at $1.00, on March 10, 2023, the value of USDC fell below $1.00 for multiple days after Circle Internet Financial disclosed that $3.3 billion of the USDC reserves were held at Silicon Valley Bank, which had entered FDIC receivership earlier that day. Since then, USDC has managed to restore its peg to $1.00 and has not experienced a depegging event of similar magnitude. Stablecoins are reliant on the U.S. banking system and U.S. treasuries, and the failure of either to function normally could affect stablecoin operations, and adversely affect the value of the Shares. An affiliate of the Sponsor has a minority equity interest in the issuer of USDC. Similar to Tether, a large amount of USDC is issued as ERC-20 tokens on the Ethereum network. If USDC were to no longer be issued or to cease operating on the Ethereum network, demand for Ether used to pay gas fees for ERC-20 USDC transactions could decline, and a substantial source of demand for Ether could be eliminated, which could cause the price of Ether to decrease and negatively affect the value of the Shares.

Current wording

While USDC is designed to maintain a stable value at $1.00, on March 10, 2023, the value of USDC fell below $1.00 for multiple days after Circle Internet Financial disclosed that $3.3 billion of the USDC reserves were held at Silicon Valley Bank, which had entered FDIC receivership earlier that day. Since then, USDC has generally traded near its intended $1.00 value, but it has experienced fluctuations. Stablecoins are reliant on the U.S. banking system and U.S. treasuries, and the failure of either to function normally could affect stablecoin operations and adversely affect the value of the Shares. In addition, implementation of the GENIUS Act and evolving U.S. stablecoin regulation could require stablecoin issuers and market participants to obtain licenses or approvals, satisfy reserve and disclosure requirements, or restrict certain activities, any of which could affect stablecoin availability and liquidity. An affiliate of the Sponsor has a minority equity interest in the issuer of USDC. Similar to Tether, a large amount of USDC is issued as ERC-20 tokens on the Ethereum network. If USDC were to no longer be issued or to cease operating on the Ethereum network, demand for Ether used to pay gas fees for ERC-20 USDC transactions could decline, and a substantial source of demand for Ether could be eliminated, which could cause the price of Ether to decrease and negatively affect the value of the Shares.

Previous wording

Some stablecoins have been alleged to be securities under the federal securities laws. For example, on June 5, 2023, the SEC alleged in a complaint that the stablecoin BUSD, a U.S. dollar stablecoin issued by Binance, was a “crypto asset security” and that Binance “offered and sold to U.S. investors as part of a profit-earning scheme within the Binance ecosystem.” However, on June 28, 2024, a federal judge dismissed the SEC's claim that BUSD was a security, stating that the SEC failed to credibly establish that BUSD was offered or sold as such. In another example, the District Court for the Southern District of New York denied defendants’ motion to dismiss an SEC complaint asserting that the stablecoin TerraUSD (UST), a U.S. dollar stablecoin issued by Terra Labs, is a security. Further public concern about the possible security status of stablecoins manifested in November 2023, when the financial technology company PayPal disclosed in a filing that it had received a subpoena from the SEC relating to the PayPal USD stablecoin that requested the production of documents. If a widely used stablecoin were legally determined to be a security, this could trigger mass redemptions and broader instability in the Crypto Asset market, negatively impacting the value of the Shares.

Current wording

Some stablecoins have been alleged to be securities under the federal securities laws and the regulatory status of stablecoins remains in flux. For example, on June 5, 2023, the SEC alleged in a complaint that the stablecoin BUSD, a U.S. dollar stablecoin associated with the Binance ecosystem, was a “crypto asset security” and that Binance “offered and sold to U.S. investors as part of a profit-earning scheme within the Binance ecosystem.” However, on June 28, 2024, a federal judge dismissed the SEC's claim that BUSD was a security, stating that the SEC failed to credibly establish that BUSD was offered or sold as such. On May 29, 2025, the SEC filed a joint stipulation to dismiss, with prejudice, the civil enforcement action against Binance entities and founder Changpeng Zhao, and stated that the dismissal decision did not necessarily reflect the Commission’s position on other litigation or proceedings. In another example, in November 2023, the financial technology company PayPal disclosed in a filing that it had received a subpoena from the SEC relating to the PayPal USD stablecoin that requested the production of documents. PayPal later disclosed that, in February 2025, the SEC communicated it was closing this inquiry without enforcement action.

Previous wording

Given the foundational role that stablecoins play in global Crypto Asset markets, their fundamental liquidity and actual stability can have a dramatic impact on the broader Crypto Asset market, including the market for Portfolio Crypto Assets. Because a large portion of the Crypto Asset market still depends on stablecoins such as Tether and USDC, there is a risk that a disorderly de-pegging or a run on Tether or USDC could lead to dramatic market volatility in Crypto Assets more broadly. Volatility in stablecoins, operational issues with stablecoins (for example, technical issues that prevent settlement), concerns about the sufficiency of any reserves that support stablecoins or potential manipulative activity when unbacked stablecoins are used to pay for other Crypto Assets (including Portfolio Crypto Assets), or regulatory concerns about stablecoin issuers or intermediaries, such as exchanges, that support stablecoins, could impact individuals’ willingness to trade on trading venues that rely on stablecoins, reduce liquidity in the market of Portfolio Crypto Assets, and affect the value of Portfolio Crypto Assets, and in turn impact an investment in the Shares.

Current wording

Because a large portion of the Crypto Asset market still depends on stablecoins such as Tether and USDC, there is a risk that a disorderly de-pegging or a run on Tether or USDC could lead to dramatic market volatility in Crypto Assets more broadly. Volatility in stablecoins, operational issues with stablecoins (for example, technical issues that prevent settlement), concerns about the sufficiency of any reserves that support stablecoins or potential manipulative activity when unbacked stablecoins are used to pay for other Crypto Assets (including Portfolio Crypto Assets), regulatory changes affecting stablecoin issuers or intermediaries, such as exchanges, that support stablecoins, and enforcement actions or sanctions targeting stablecoin-related activity could impact individuals’ willingness to trade on trading venues that rely on stablecoins, reduce liquidity in the market of Portfolio Crypto Assets, and affect the value of Portfolio Crypto Assets, and in turn impact an investment in the Shares.

Previous wording

Recent events have heightened these risks. In November 2022, FTX and its affiliates filed for bankruptcy, undermining user confidence in cryptocurrency trading and leading to negative publicity and extreme price volatility. These events adversely affected numerous entities in the Crypto Asset industry and reduced the liquidity of certain assets. In 2023, regulatory scrutiny intensified. The SEC initiated actions against major crypto exchanges like Coinbase and Binance, alleging unregistered securities operations. This increased regulatory activity has led to uncertainty, negatively impacting market confidence and potentially affecting the operations of the Trust.

Current wording

Recent events have heightened these risks. For example, the SEC has initiated actions against major crypto exchanges like Coinbase and Binance, alleging unregistered securities operations. This increased regulatory activity has led to uncertainty, negatively impacting market confidence and potentially affecting the operations of the Trust.

Previous wording

Despite ongoing efforts to enhance the speed and throughput of Crypto Asset transactions, scaling solutions have yet to fully address these challenges. As demand for Blockchain network usage grows, transaction fees and settlement times may increase. For instance, the Bitcoin network can handle approximately 3-7 transactions per second, while the Ethereum network manages about 15 transactions per second. During periods of peak demand, these networks have experienced significant congestion. In December 2023, increased activity on the Bitcoin network led to transaction fees rising to as high as $37 to $52, with over 300,000 pending transactions. Similarly, Ethereum transaction fees peaked at $200 per transaction in April 2022, though they have since decreased to approximately $3.56 as of December 31, 2024. Such increased fees and slower settlement speeds could reduce the utility of Crypto Assets for use cases like micropayments. The lack of financial incentives for core developers of Blockchains may also slow down the development of critical upgrades. Developers who contribute to network improvements typically lack steady funding, which could lead to reduced motivation to resolve emerging challenges or to achieve consensus on solutions. This could delay necessary scalability and security enhancements, further exacerbating network congestion and increasing transaction fees.

Current wording

Despite ongoing efforts to enhance the speed and throughput of Crypto Asset transactions, scaling solutions have yet to fully address these challenges. As demand for Blockchain network usage grows, transaction fees and settlement times may increase. For instance, the Bitcoin network can handle approximately 3-7 transactions per second, while the Ethereum network manages about 15 transactions per second. During periods of peak demand, these networks have experienced significant congestion. In December 2023, increased activity on the Bitcoin network led to transaction fees rising to as high as $37 to $52, with over 300,000 pending transactions. Similarly, Ethereum transaction fees peaked at $200 per transaction in April 2022, though they have since decreased to approximately $0.09 as of December 31, 2025. Such increased fees and slower settlement speeds could reduce the utility of Crypto Assets for use cases like micropayments. The lack of financial incentives for core developers of Blockchains may also slow down the development of critical upgrades. Developers who contribute to network improvements typically lack steady funding, which could lead to reduced motivation to resolve emerging challenges or to achieve consensus on solutions. This could delay necessary scalability and security enhancements, further exacerbating network congestion and increasing transaction fees.

Previous wording

The market for Crypto Assets, including Bitcoin and Ether, tends to experience significant fluctuations due to shallow trade volumes and limited liquidity, especially during periods of market stress. Ownership concentration can be high, with a small number of holders controlling substantial amounts of assets, which can make it difficult to execute large trades in a timely and market-efficient manner. For example, as of December 31, 2024 the largest 100 Bitcoin wallets held approximately 14% of the Bitcoin in circulation, the largest 100 Ether wallets held approximately 68% of the Ether in circulation, the largest 100 SOL wallets held approximately 23% of the SOL in circulation and the largest 100 XRP wallets held approximately 71% of the XRP in circulation. This concentration increases the risk that significant sales could disrupt prices, leading to sharp declines and potential losses.

Current wording

The market for Crypto Assets, including Bitcoin and Ether, tends to experience significant fluctuations due to shallow trade volumes and limited liquidity, especially during periods of market stress. Ownership concentration can be high, with a small number of holders controlling substantial amounts of assets, which can make it difficult to execute large trades in a timely and market-efficient manner. For example, as of December 31, 2025 the largest 100 Bitcoin wallets held approximately 15.26% of the Bitcoin in circulation, the largest 100 Ether wallets held approximately 17.68% of the Ether in circulation, the largest 100 SOL wallets held approximately 22.76% of the SOL in circulation and the largest 100 XRP wallets held approximately 67.88% of the XRP in circulation. This concentration increases the risk that significant sales could disrupt prices, leading to sharp declines and potential losses.

Previous wording

As Crypto Assets have gained widespread adoption and increased in market size, various U.S. federal, state, local, and foreign governmental agencies, as well as consumer advocacy groups, have escalated their scrutiny of crypto networks, users, and platforms. Areas of concern include the use of Crypto Assets for illicit activities, funding of criminal or terrorist enterprises, and the safety and integrity of platforms holding Crypto Assets on behalf of users. These entities have increasingly called for heightened regulatory oversight and issued advisories warning users and investors of the risks associated with Crypto Assets. Notably, in September 2022, the White House released the “Comprehensive Framework for Responsible Development of Digital Assets,” encouraging regulatory agencies to implement rules addressing emerging risks in the Crypto Asset ecosystem. Since then, additional regulatory developments, including proposed rules by the SEC targeting Crypto Asset platforms and renewed focus on stablecoins, have highlighted an ongoing commitment to stricter oversight.

Current wording

As Crypto Assets have gained widespread adoption and increased in market size, various U.S. federal, state, local, and foreign governmental agencies, as well as consumer advocacy groups, have escalated their scrutiny of crypto networks, users, and platforms. Areas of concern include the use of Crypto Assets for illicit activities, funding of criminal or terrorist enterprises, and the safety and integrity of platforms holding Crypto Assets on behalf of users. These entities have increasingly called for heightened regulatory oversight and issued advisories warning users and investors of the risks associated with Crypto Assets. See “—Risks Related to Regulatory and Compliance” for additional information.

Previous wording

Additionally, Bitcoin Mining is highly sensitive to fluctuations in energy prices and Bitcoin market prices. Mining requires specialized computers that consume significant amounts of energy, and the marginal cost of Mining can vary based on energy prices and competition among Miners. If the cost of Mining exceeds the potential profit, some Miners may cease operations, which could slow transaction processing on the Bitcoin network and reduce its security against potential attacks. Furthermore, federal or state governments in key jurisdictions, including the United States, have are considering regulations targeting Bitcoin Mining’s energy consumption, which could further increase operational costs or restrict Miner activity. The combined impact of reduced profitability, increased sales of newly mined Bitcoin, and fluctuating operational costs could negatively affect the price of Bitcoin, thereby impacting the value of an investment in the Shares.

Current wording

Additionally, Bitcoin Mining is highly sensitive to fluctuations in energy prices and Bitcoin market prices. Mining requires specialized computers that consume significant amounts of energy, and the marginal cost of Mining can vary based on energy prices and competition among Miners. If the cost of Mining exceeds the potential profit, some Miners may cease operations, which could slow transaction processing on the Bitcoin network and reduce its security against potential attacks. Furthermore, federal or state governments in key jurisdictions, including the United States, are considering regulations targeting Bitcoin Mining’s energy consumption, which could further increase operational costs or restrict Miner activity. The combined impact of reduced profitability, increased sales of newly mined Bitcoin, and fluctuating operational costs could negatively affect the price of Bitcoin, thereby impacting the value of an investment in the Shares.

Previous wording

Forks can introduce security risks, such as replay attacks, where transactions on one network are maliciously duplicated on another, potentially leading to double-spending. For instance, the Ethereum and Ethereum Classic fork resulted in months of replay attacks, with significant financial losses. Additionally, a Hard Fork can reduce network security by fracturing the Validating or hashing power, increasing the risk of a 51% attack where a single entity gains control over the network. This could make smaller networks more vulnerable to attacks, undermining the stability and security of the assets. Furthermore, Hard Forks can lead to market volatility. The announcement of a fork may temporarily increase demand for the original asset as holders anticipate receiving new forked assets.

Current wording

Forks can introduce security risks, such as replay attacks, where transactions on one network are maliciously duplicated on another, potentially leading to double-spending. For instance, the Ethereum and Ethereum Classic fork resulted in months of replay attacks, with significant financial losses. Additionally, a Hard Fork can reduce network security by fracturing the Validating or hashing power, increasing the risk of a 51% attack where a single entity gains control over the network. This could make smaller networks more vulnerable to attacks, undermining the stability and security of the assets. Furthermore, Hard Forks can lead to market volatility. The announcement of a fork may temporarily increase demand for the original asset as holders anticipate receiving new forked assets. However, once the fork is completed, the combined value of the resulting assets may be lower than the pre-fork value. Additionally, if the fork leads to operational challenges on either network, the affected Crypto Assets may experience significant value declines, which could negatively impact the Shares. Smart contract-based forked assets may also introduce risks if applications fail to transition securely, potentially leading to fund losses or security exploits.

Previous wording

The emergence of cloned networks can introduce competition that disrupts the market dynamics of the original network. For example, in 2020, Binance Smart Chain ("BSC") cloned Ethereum’s open-source code to create a separate network that utilized the Proof-of-Staked Authority consensus mechanism. By offering faster transactions and lower fees while maintaining compatibility with Ethereum’s Virtual Machine ("EVM"), BSC attracted developers and decentralized applications ("dApps") away from Ethereum network. This shift led to a diversification of activity across multiple platforms, potentially reducing demand for Ether and impacting its market value. Similarly, while Bitcoin has not faced direct large-scale cloning, projects like Bitcoin Private ("BTCP")—a merge fork of Bitcoin and ZClassic—illustrate how cloned networks can trigger market volatility. In 2018, the creation of BTCP led to speculation that impacted the prices of both Bitcoin and Zclassic. Although not as widespread, the emergence of a significant clone that gains market traction could negatively impact the market value of Bitcoin.

Current wording

The emergence of cloned networks can introduce competition that disrupts the market dynamics of the original network. For example, in 2020, Binance Smart Chain (“BSC”) cloned Ethereum’s open-source code to create a separate network that utilized the Proof-of-Staked Authority consensus mechanism. By offering faster transactions and lower fees while maintaining compatibility with Ethereum’s Virtual Machine, BSC attracted developers and dApps away from Ethereum network. This shift led to a diversification of activity across multiple platforms, potentially reducing demand for Ether and impacting its market value. Similarly, while Bitcoin has not faced direct large-scale cloning, projects like Bitcoin Private (“BTCP”)—a merge fork of Bitcoin and ZClassic—illustrate how cloned networks can trigger market volatility. In 2018, the creation of BTCP led to speculation that impacted the prices of both Bitcoin and ZClassic. Although not as widespread, the emergence of a significant clone that gains market traction could negatively impact the market value of Bitcoin.

Previous wording

The Trust relies heavily on the expertise and contributions of the executive officers and other key personnel of the Sponsor and Bitwise, including Hunter Horsley, Teddy Fusaro, Katherine Dowling, Matthew Hougan, and Hong Kim. These individuals are critical to managing the Trust’s business, operations, and investment strategy. The loss of any of these individuals would be difficult to replace and could involve significant time and expense, potentially delaying or preventing the achievement of the Trust’s objectives. Moreover, the Sponsor and Bitwise do not maintain key man life insurance policies on these executives, which could exacerbate the negative impact of their absence.

Current wording

The Trust relies heavily on the expertise and contributions of the executive officers and other key personnel of the Sponsor and Bitwise, including Hunter Horsley, Paul “Teddy” Fusaro, Matthew Hougan, and Hong Kim. These individuals are critical to managing the Trust’s business, operations, and investment strategy. The loss of any of these individuals would be difficult to replace and could involve significant time and expense, potentially delaying or preventing the achievement of the Trust’s objectives. Moreover, the Sponsor and Bitwise do not maintain key man life insurance policies on these executives, which could exacerbate the negative impact of their absence.

Previous wording

Sponsor Discretion and Limited Fiduciary Duties: The Sponsor may consider the interests of parties other than the Trust and its Shareholders when resolving conflicts, provided it does not act in bad faith. The Trust has also agreed to indemnify the Sponsor and its affiliates pursuant to the Trust Agreement, and amendments to the Trust Agreement that do not materially adversely affect

Current wording

Sponsor Discretion and Limited Fiduciary Duties: The Sponsor may consider the interests of parties other than the Trust and its Shareholders when resolving conflicts, provided it does not act in bad faith. The Trust has also agreed to indemnify the Sponsor and its affiliates pursuant to the Trust Agreement, and amendments to the Trust Agreement that do not materially adversely affect Shareholders may be made without their consent. Additionally, Shareholders holding a majority of outstanding Shares may approve other amendments, potentially impacting minority Shareholders.

Previous wording

The markets for Portfolio Crypto Assets are generally less liquid than traditional asset classes, and their prices can experience significant swings, particularly during periods of market stress or low trading volumes. This lack of liquidity may hinder the Trust’s ability to execute trades at favorable prices or liquidate positions promptly, especially if large sell orders are needed. Should the Trust attempt to sell significant portions of its Portfolio Crypto

Current wording

The markets for Portfolio Crypto Assets are generally less liquid than traditional asset classes, and their prices can experience significant swings, particularly during periods of market stress or low trading volumes. This lack of liquidity may hinder the Trust’s ability to execute trades at favorable prices or liquidate positions promptly, especially if large sell orders are needed. Should the Trust attempt to sell significant portions of its Portfolio Crypto Assets holdings, the size of these positions could further magnify liquidity risks, resulting in potential losses if the Trust struggles to find buyers without driving prices downward.

Previous wording

An investment in the Trust involves significant risks, including the potential for the complete loss of the investment. The Trust operates as a passive investment vehicle, and the Sponsor will generally not actively manage the Portfolio Crypto Assets held by the Trust, except in limited circumstances where activities such as Staking or lending are deemed to be in the Trust’s best interest and permitted by applicable laws, rules, and regulations. Unlike actively managed funds, the Trust will not attempt to mitigate losses during adverse market conditions or capitalize on opportunities for price increases; instead, it will hold investments that track the Index regardless of market performance. Consequently, the Trust’s net asset value may be adversely affected, and investors may sustain losses that could have been avoided through active management.

Current wording

An investment in the Trust involves significant risks, including the potential for the complete loss of the investment. The Trust operates as a passive investment vehicle, and the Sponsor will generally not actively manage the Portfolio Crypto Assets held by the Trust, except in limited circumstances where activities such as Staking or lending are deemed to be in the Trust’s best interest and permitted by applicable laws, rules, and regulations. Unlike actively managed funds, the Trust will not attempt to mitigate losses during adverse market conditions or capitalize on opportunities for price increases; instead, it will hold investments that track the Index regardless of market performance. Consequently, the Trust’s NAV may be adversely affected, and investors may sustain losses that could have been avoided through active management.

Previous wording

The Custodian serves as a fiduciary under § 100 of the New York Banking Law and a qualified custodian for purposes of Rule 206(4)-2(d)(6) under the Advisers Act. While the Portfolio Crypto Assets in the Custodial Account are considered fiduciary assets and remain the Trust’s property at all times, the Custodian or Sponsor may terminate the Custodian Agreement for cause at any time during the initial term and, after the initial term, for any reason upon 30 days’ notice. The Sponsor also has the right to remove the Custodian and may appoint an additional or replacement custodian by entering into a new custodian agreement on behalf of the Trust. If the Custodian resigns or is removed and no replacement acceptable to the Sponsor is engaged, the Trust may be forced to dissolve in accordance with the Trust Agreement, triggering liquidation of its assets and potential adverse effects on investors. For more information, see the section entitled “Item 10. Directors, Executive Officers and Corporate Governance—The Custodian and the Custodial Services Agreement.“

Current wording

The Custodian serves as a fiduciary under § 100 of the New York Banking Law and a qualified custodian for purposes of Rule 206(4)-2(d)(6) under the Advisers Act. While the Portfolio Crypto Assets in the Custodial Account are considered fiduciary assets and remain the Trust’s property at all times, the Custodian or Sponsor may terminate the Custodian Agreement for Cause (as defined in the applicable agreement) at any time during the initial term and, after the initial term, for any reason upon 30 days’ notice. The Sponsor also has the right to remove the Custodian and may appoint an additional or replacement custodian by entering into a new custodian agreement on behalf of the Trust. If the Custodian resigns or is removed and no replacement acceptable to the Sponsor is engaged, the Trust may be forced to dissolve in accordance with the Trust Agreement, triggering liquidation of its assets and potential adverse effects on investors. For more information, see the section entitled “Item 10. Directors, Executive Officers and Corporate Governance—The Custodian and the Custodial Services Agreement.”

Previous wording

The Index may not achieve its intended objective of tracking a basket of Crypto Assets that represents a majority of the total free-float-adjusted market capitalization due to its rules-driven investment policies and the evolving nature of the Crypto Asset market. As new Crypto Assets are continuously created, the proportion of the total market capitalization represented by the top ten Crypto Assets may decrease. At its inception on October 1, 2017, the Crypto Assets in the Index represented approximately 83% of the total market capitalization of all Crypto Assets, which has since decreased to around 78% as of December 31, 2024. The Index, which tracks only the top ten Crypto Assets by free-float-adjusted market capitalization and is rebalanced monthly, may consequently cover a diminishing portion of the overall market.

Current wording

The Index may not achieve its intended objective of tracking a basket of Crypto Assets that represents a majority of the total free-float-adjusted market capitalization due to its rules-driven investment policies and the evolving nature of the Crypto Asset market. As new Crypto Assets are continuously created, the proportion of the total market capitalization represented by the top ten Crypto Assets may decrease. At its inception on October 1, 2017, the Crypto Assets in the Index represented approximately 83% of the total market capitalization of all Crypto Assets, which has since decreased to around 75% as of December 31, 2025. The Index, which tracks only the top ten Crypto Assets by free-float-adjusted market capitalization and is rebalanced monthly, may consequently cover a diminishing portion of the overall market.

Previous wording

Furthermore, the Trust’s investment policies and Index Methodology—including specific eligibility criteria and a monthly rebalancing schedule—may lead to the Index’s underrepresentation of Crypto Assets that are increasing in value and overrepresentation of those that are declining in value. As a result, the composition of the Index may not always align with the “top 10 Crypto Assets“ lists available on popular websites like CoinMarketCap.com, potentially causing delays in adjusting the Trust’s portfolio to market changes. Consequently, the Trust may underperform relative to other investment options that invest in different or additional Crypto Assets and do not follow similar investment policies, which could have an adverse effect on the Trust and on the value of an investment in the Trust.

Current wording

Furthermore, the Trust’s investment policies and Index Methodology—including specific eligibility criteria and a monthly rebalancing schedule—may lead to the Index’s under-representation of Crypto Assets that are increasing in value and overrepresentation of those that are declining in value. As a result, the composition of the Index may not always align with the “top 10 Crypto Assets” lists available on popular websites like CoinMarketCap.com, potentially causing delays in adjusting the Trust’s portfolio to market changes. Consequently, the Trust may underperform relative to other investment options that invest in different or additional Crypto Assets and do not follow similar investment policies, which could have an adverse effect on the Trust and on the value of an investment in the Trust.

Previous wording

The Sponsor is solely responsible for determining the Trust’s NAV Per Share, and computing the Trust’s NAV in accordance with Article 6 of the Trust Agreement. Historically, for periods through June 30, 2021, the Trust relied on a blended pricing approach for calculating the value of its Portfolio Crypto Assets. Following a comprehensive review, the Sponsor transitioned to a principal market-based valuation method effective August 31, 2021, and subsequently engaged Lukka, Inc. as a third-party valuation vendor in February 2023 to further refine this process. Despite these updates, the determination of NAV Per Share remains the responsibility of the Sponsor.

Current wording

The Sponsor is solely responsible for determining the Trust’s NAV Per Share, and computing the Trust’s NAV in accordance with Article 6 of the Trust Agreement. Historically, for periods through June 30, 2021, the Trust relied on a blended pricing approach for calculating the value of its Portfolio Crypto Assets. Following a comprehensive review, the Sponsor transitioned to a principal market-based valuation method effective August 31, 2021, subsequently engaged Lukka, Inc. as a third-party valuation vendor in February 2023 to further refine this process and then transitioned to CF Benchmarks Ltd. in June 2025. Despite these updates, the determination of NAV Per Share remains the responsibility of the Sponsor.

Previous wording

Furthermore, fluctuations in market supply and demand could also contribute to such price deviations. The Trust’s NAV Per Share fluctuates with changes in the market value of the Portfolio Crypto Assets, which may trade in 24-hour marketplaces, while the Exchange operates during limited hours each day. This discrepancy could lead to significant differences between the NAV Per Share and the trading price of the Shares. During periods when Exchange is closed but markets for the Portfolio Crypto Assets are open, significant price movements can occur, which could result in a divergence between the value of the Portfolio Crypto Assets and the most recent NAV Per

Current wording

Furthermore, fluctuations in market supply and demand could also contribute to such price deviations. The Trust’s NAV Per Share fluctuates with changes in the market value of the Portfolio Crypto Assets, which may trade in 24-hour marketplaces, while the Exchange (as defined below) operates during limited hours each day. This discrepancy could lead to significant differences between the NAV Per Share and the trading price of the Shares. During periods when Exchange is closed but markets for the Portfolio Crypto Assets are open, significant price movements can occur, which could result in a divergence between the value of the Portfolio Crypto Assets and the most recent NAV Per Share or closing trading price of the Shares. Even during periods when the Exchange is open, large marketplaces for the Portfolio Crypto Assets (or a substantial number of smaller marketplaces) may be lightly traded or be closed for any number of reasons, which could increase trading spreads and widen any premium or discount on the Shares. If the price of Portfolio Crypto Assets drops significantly during the hours the Exchange is closed, Shareholders may not be able to sell their Shares until after the “gap” down has been fully realized, resulting in an inability to mitigate losses in a rapidly worsening market.

Previous wording

While an investment in the Shares is not a direct investment in the Portfolio Crypto Assets, the net asset value of the Trust relates primarily to the value of the Portfolio Crypto Assets, and fluctuations in the price of such Portfolio Crypto Assets could materially and adversely affect the value of the Shares. A substantial majority of the Portfolio Crypto Assets are concentrated in Bitcoin and Ether, which represented approximately 72.71% and 15.87%, respectively, of the Trust’s net asset value as of December 31, 2024, and as a result, the underlying value of the Shares depends disproportionately on the value of Bitcoin and Ether. Any future decline in the value of these Crypto Assets would be expected to have a greater effect on the value of the Shares than any other of the Portfolio Crypto Assets. The value of Crypto Assets is extremely volatile, and both Bitcoin and Ether have in the past experienced significant declines in value.

Current wording

While an investment in the Shares is not a direct investment in the Portfolio Crypto Assets, the NAV of the Trust relates primarily to the value of the Portfolio Crypto Assets, and fluctuations in the price of such Portfolio Crypto Assets could materially and adversely affect the value of the Shares. A substantial majority of the Portfolio Crypto Assets are concentrated in Bitcoin and Ether, which represented approximately 75% and 15%, respectively, of the Trust’s NAV as of December 31, 2025, and as a result, the underlying value of the Shares depends disproportionately on the value of Bitcoin and Ether. Any future decline in the value of these Crypto Assets would be expected to have a greater effect on the value of the Shares than any other of the Portfolio Crypto Assets. The value of Crypto Assets is extremely volatile, and both Bitcoin and Ether have in the past experienced significant declines in value.

Previous wording

There are several factors the Sponsor will consider in providing assurances and non-objections to the lending arrangements with regard to the Trust’s shares. First, the Trust will only grant consent to allow for the Trust’s shares to be used in lending arrangements for shares purchased by the prospective pledgor directly from the Trust, and that are “restricted securities” within the meaning of Rule 144, and consent will not be granted by the Trust for lending arrangements involving any shares that the pledgor purchases from any person other than the Trust and for any shares of the Trust that are not “restricted securities” within the meaning of Rule 144. Second, in order for the Trust to grant consent to the proposed lending arrangement, the pledgor and the secured party must both agree to remain in full compliance with all obligations and responsibilities under the subscription agreement with the Trust, with regard to all organizational documents of the Trust, and with all applicable laws, rules and regulations relating to these Trust obligations. Third, neither the pledgor nor the secured party may be an affiliate of the Trust, or any affiliate of the Trust, and may not become an affiliate at any time during the term of the lending arrangement. And fourth, the Trust will only consent to the lending arrangement if the secured party agrees that any sale of the collateral will only be made in transactions registered under the Securities Act, or in transactions for which the secured party delivers an opinion of counsel to the Trust that such transactions are exempt from registration under the Securities Act, and will only be made in transactions and to purchasers that are eligible to be holders of the Trust in accordance with the Trust’s organizational documents and are otherwise in compliance with all applicable securities laws.

Current wording

There are several factors the Sponsor will consider in providing assurances and non-objections to the lending arrangements with regard to Shares. First, the Trust will only grant consent to allow for Shares to be used in lending arrangements for Shares purchased by the prospective pledgor directly from the Trust, and that are “restricted securities” within the meaning of Rule 144, and consent will not be granted by the Trust for lending arrangements involving any Shares that the pledgor purchases from any person other than the Trust and for any Shares that are not “restricted securities” within the meaning of Rule 144. Second, in order for the Trust to grant consent to the proposed lending arrangement, the pledgor and the secured party must both agree to remain in full compliance with all obligations and responsibilities under the subscription agreement with the Trust, with regard to all organizational documents of the Trust, and with all applicable laws, rules and regulations relating to these Trust obligations. Third, neither the pledgor nor the secured party may be an affiliate of the Trust, or any affiliate of the Trust, and may not become an affiliate at any time during the term of the lending arrangement. And fourth, the Trust will only consent to the lending arrangement if the secured party agrees that any sale of the collateral will only be made in transactions registered under the Securities Act, or in transactions for which the secured party delivers an opinion of counsel to the Trust that such transactions are exempt from registration under the Securities Act, and will only be made in transactions and to purchasers that are eligible to be holders of the Trust in accordance with the Trust’s organizational documents and are otherwise in compliance with all applicable securities laws.

Previous wording

If the Trust were to cease accepting new subscribers—investors invest in the Trust by purchasing newly issued Shares— it is possible that the number of Portfolio Crypto Assets represented by each share of the Trust would decrease. These investments enable the Trust to acquire additional Portfolio Crypto Assets, thereby maintaining or increasing its holdings relative to its expenses.

Current wording

If the Trust were to cease accepting new subscribers—investors invest in the Trust by purchasing newly issued Shares— it is possible that the number of Portfolio Crypto Assets represented by each Share would decrease. These investments enable the Trust to acquire additional Portfolio Crypto Assets, thereby maintaining or increasing its holdings relative to its expenses.

Previous wording

The Shares are qualified for public trading on the Exchange and an active trading market for the Shares has developed. However, there is no assurance that such trading market will be maintained or continue to develop. In addition, the Exchange may halt the trading of the Shares for a variety of reasons. To the extent that Exchange halts trading in the Shares, whether on a temporary or permanent basis, investors may not be able to buy or sell Shares, which could adversely affect the value of the Shares. If an active trading market for the Shares does not continue to exist, the market prices and liquidity of the Shares may be adversely affected.

Current wording

On December 8, 2025, the Shares were approved by the NYSE Arca for listing and trading on the Exchange under the ticker symbol “BITW”. The Shares began trading on the Exchange on December 9, 2025. However, there is no assurance that such trading market will be maintained or continue to develop. In addition, the Exchange may halt the trading of the Shares for a variety of reasons. To the extent that Exchange halts trading in the Shares, whether on a temporary or permanent basis, investors may not be able to buy or sell Shares, which could adversely affect the value of the Shares. If an active trading market for the Shares does not continue to exist, the market prices and liquidity of the Shares may be adversely affected.

Previous wording

Compliance with these rules and regulations may demand significant time and effort from the Sponsor’s management and personnel, potentially diverting attention away from day-to-day operational activities. This increased focus on compliance could also place considerable strain on the Trust’s financial and management systems, internal controls, and workforce. If the Trust fails to comply with these regulatory requirements or meet the OTCQX’s continued listing standards, which include maintaining a minimum per-share bid price, market capitalization, net tangible assets, and public float, the Shares may no longer be permitted to trade on the OTCQX, resulting in adverse consequences for the Shareholders, including limited availability of market quotations and reduced liquidity for the Shares.

Current wording

Compliance with these rules and regulations may demand significant time and effort from the Sponsor’s management and personnel, potentially diverting attention away from day-to-day operational activities. This increased focus on compliance could also place considerable strain on the Trust’s financial and management systems, internal controls, and workforce. If the Trust fails to comply with these regulatory requirements or meet the Exchange's continued listing standards, which include maintaining a minimum per-share bid price, market capitalization, net tangible assets, and public float, the Shares may no longer be permitted to trade on the Exchange, resulting in adverse consequences for the Shareholders, including limited availability of market quotations and reduced liquidity for the Shares.

Previous wording

The regulatory landscape for Crypto Assets in the United States is complex and evolving, with multiple federal and state agencies actively overseeing various aspects of their use, trading, and compliance obligations. These agencies include, but are not limited to, the SEC, the U.S. Commodity Futures Trading Commission (“CFTC”), the Financial Crimes Enforcement Network (“FinCEN”), the Office of Foreign Assets Control (“OFAC”), the Office of the Comptroller of the Currency, the Federal Reserve Board, the U.S. Department of the Treasury, the Consumer Financial Protection Bureau, the Federal Trade Commission, the Internal Revenue Service, the U.S. Department of Justice (“DOJ”) and various state financial regulators and state Attorneys General.

Current wording

The regulatory landscape for Crypto Assets in the United States is complex and evolving, with multiple federal and state agencies actively overseeing various aspects of their use, trading, and compliance obligations. These agencies include, but are not limited to, the SEC, the U.S. Commodity Futures Trading Commission (“CFTC”), the Financial Crimes Enforcement Network (“FinCEN”), the Office of Foreign Assets Control (“OFAC”), the Office of the Comptroller of the Currency, the Federal Reserve Board, the U.S. Treasury Department, the Consumer Financial Protection Bureau, the Federal Trade Commission, the Internal Revenue Service, the DOJ and various state financial regulators and state Attorneys General.

Previous wording

The jurisdiction of federal and state regulators over Crypto Assets depends on their classification. Crypto Assets may be deemed “securities,” “commodities,” “virtual currencies,” or another asset type. Each classification can trigger different regulatory frameworks and oversight responsibilities. For example, a Crypto Asset like Ether could be classified by the SEC as a “security” under U.S. federal securities laws, depending on its use and the circumstances surrounding specific transactions. Ether may also be classified by the CFTC as a “commodity interest” under the Commodity Exchange Act, or by state regulators as a form of virtual currency subject to state money transmission laws. Although U.S. courts have ruled in some circumstances that Bitcoin is a commodity and acknowledged the CFTC’s position that Ether should be considered a commodity, no comprehensive federal court ruling conclusively establishes that Bitcoin, Ether, or any other Crypto Asset, is a security, commodity, or other form of asset under all circumstances.

Current wording

The jurisdiction of federal and state regulators over Crypto Assets depends on their classification. Crypto Assets may be deemed “securities,” “commodities,” “virtual currencies,” or another asset type. Each classification can trigger different regulatory frameworks and oversight responsibilities. For example, a Crypto Asset like Ether could be classified by the SEC as a “security” under U.S. federal securities laws, depending on its use and the circumstances surrounding specific transactions. Ether may also be classified by the CFTC as a “commodity interest” under the Commodity Exchange Act, or by state regulators as a form of virtual currency subject to state money transmission laws. Although U.S. courts have ruled in some circumstances that Bitcoin is a commodity and acknowledged the CFTC’s position that Ether should be considered a commodity, no comprehensive federal court ruling conclusively establishes that Bitcoin, Ether, or any other Crypto Asset, is a security, commodity, or other form of asset under all circumstances. In December 2025, the CFTC withdrew certain interpretive guidance relating to “retail commodity transactions” in digital assets. However, the scope of the CFTC’s jurisdiction and the application of the Commodity Exchange Act to digital asset products and transactions (including transactions involving Ether) remain subject to change through legislation, regulation, agency interpretation, and judicial decisions.

Previous wording

In recent years, the SEC has increased enforcement actions and investigations in the crypto sector, targeting entities it deems in violation of securities laws. This includes actions against platforms such as Kraken for offering unregistered securities and Staking services, as well as ongoing investigations into Coinbase, Ripple, Binance and ConsenSys for activities involving various Crypto Assets and services. The SEC also proposed or adopted several rules last year that could significantly impact the Crypto Asset industry. These included amendments to the Exchange Act’s definition of “dealer,” which could negatively affect numerous digital asset trading platforms, and certain DeFi platforms in particular, and proposed amendments to the SEC Custody Rule under the Advisers Act, which would make it more difficult for asset managers to custody Crypto Assets. The SEC also raised concerns about compliance and market oversight of Crypto Assets, and emphasized retail investor protection and market integrity as key priorities, with its Division of Examinations identifying Crypto Assets as a focus for 2025. These regulatory actions and heightened scrutiny extend to emerging areas such as DeFi protocols and NFTs creating additional legal challenges and market uncertainty.

Current wording

In recent years, the SEC has increased enforcement actions and investigations in the crypto sector, targeting entities it deems in violation of securities laws. This includes actions against platforms such as Kraken for offering unregistered securities and staking services, as well as investigations into certain digital asset platforms and service providers. In 2025, the SEC dismissed a number of pending civil enforcement actions involving major crypto market participants, including Coinbase. The SEC also proposed, adopted, or withdrew several rules and issued multiple staff statements and other staff guidance in 2025 that could significantly impact the digital asset industry. The SEC also raised concerns about compliance and market oversight of digital assets, and emphasized retail investor protection and market integrity as key priorities. These regulatory actions and heightened scrutiny extend to emerging areas such as DeFi protocols, creating additional legal challenges and market uncertainty.

Previous wording

However, recent SEC developments indicate possible shifts in its regulatory approach, although the SEC’s long-term direction remains uncertain. The SEC approved multiple spot Bitcoin ETFs for the first time in January 2024 followed by the approval of multiple spot Ethereum ETFs in July 2024, including the Bitwise trusts holding Bitcoin and Ether. These approvals suggest that both Bitcoin and Ethereum may be commodities. More recently the SEC: 1) withdrew Staff Accounting Bulletin 121, eliminating the requirement for companies to recognize a liability and corresponding asset for safeguarding Crypto Assets; 2) formed a new Crypto Task Force led by Commissioner Hester Peirce aimed at providing greater regulatory clarity to the Crypto Asset industry; and 3) paused enforcement actions against Binance. That said, any permanent regulatory shift remain uncertain at this time, and there is no assurance a more favorable U.S. regulatory environment will emerge at the federal or state levels. Any adverse regulatory developments or enforcement actions could negatively impact the value of these assets and related products, including the Trust.

Current wording

However, recent SEC developments indicate possible shifts in its regulatory approach, although the SEC’s long-term direction remains uncertain. The SEC approved multiple spot Bitcoin ETFs for the first time in January 2024 followed by the approval of multiple spot Ethereum ETFs in July 2024, including the Bitwise trusts holding Bitcoin and Ether. These approvals do not constitute a binding determination of the legal classification of Bitcoin or Ether under the federal securities laws or the Commodity Exchange Act for all purposes. More recently, the SEC, among other things: (i) issued Staff Accounting Bulletin No. 122 on January 23, 2025, which rescinded Staff Accounting Bulletin No. 121; (ii) announced the formation of a Crypto Task Force on January 21, 2025; (iii) issued multiple staff statements in 2025 addressing, among other things, certain protocol staking activities and disclosure practices for crypto asset ETPs; and (iv) approved orders and exchange rule changes in 2025 affecting crypto asset ETP operations (including permitting in-kind creations and redemptions for certain Bitcoin- and Ether-based crypto asset ETPs and adopting generic listing standards for commodity-based trust shares). That said, any permanent regulatory shift remains uncertain at this time, and there is no assurance a more favorable U.S. regulatory environment will emerge at the federal or state levels. Any adverse regulatory developments or enforcement actions could negatively impact the value of these assets and related products, including the Trust.

Previous wording

The SEC has also regularly stated that certain Crypto Assets may be considered “securities” under federal securities laws, and this classification can have significant implications for Crypto Assets, including certain Portfolio Crypto Assets. The legal test for determining whether any given Crypto Asset, product, or service is an investment contract security was set forth in the 1946 Supreme Court case SEC v. W.J. Howey Co., and whether any given Crypto Asset, product, or service is a note, is discussed in the 1990 Supreme Court case Reves v. Ernst & Young. Determining whether any given Crypto Asset, product, or service is a security requires a highly complex, fact-driven analysis. Accordingly, whether any given Crypto Asset, product or service would be ultimately deemed by a federal court to be a security is uncertain and difficult to predict notwithstanding the conclusions of the SEC or any conclusions we may draw regarding the likelihood that a particular Crypto Asset, product or service could be deemed a “security” or “securities offering” under applicable laws. Certain statements by SEC officials have suggested that Bitcoin does not meet the criteria of an investment contract under the federal securities laws. Former SEC Director William Hinman also stated in 2018 that Ether, in its decentralized form at the time, did not meet these criteria; but former SEC Chairman Gary Gensler suggested that Ether might be a security as recently as last year. None of these statements are comprehensive or binding, and the SEC continues to scrutinize aspects of the Crypto Asset space, including Bitcoin, Ether.

Current wording

The SEC has also regularly stated that certain Crypto Assets may be considered “securities” under federal securities laws, and this classification can have significant implications for Crypto Assets, including certain Portfolio Crypto Assets. The legal test for determining whether any given Crypto Asset, product, or service is an investment contract security was set forth in the 1946 Supreme Court case SEC v. W.J. Howey Co., and whether any given Crypto Asset, product, or service is a note, is discussed in the 1990 Supreme Court case Reves v. Ernst & Young. Determining whether any given Crypto Asset, product, or service is a security requires a highly complex, fact-driven analysis. Accordingly, whether any given Crypto Asset, product or service would be ultimately deemed by a federal court to be a security is uncertain and difficult to predict notwithstanding the conclusions of the SEC or any conclusions we may draw regarding the likelihood that a particular Crypto Asset, product or service could be deemed a “security” or “securities offering” under applicable laws. Certain statements by SEC officials have suggested that Bitcoin does not meet the criteria of an investment contract under the federal securities laws. Former SEC Director William Hinman also stated in 2018 that Ether, in its decentralized form at the time, did not meet these criteria; but former SEC Chairman Gary Gensler suggested that ether might be a security in certain public remarks during his tenure. In addition, in May 2025 the staff of the SEC’s Division of Corporation Finance issued a statement regarding the acceptability of certain protocol staking activities; however, staff statements reflect staff views, are not binding on the Commission, and may be withdrawn or modified. None of these statements are comprehensive or binding, and the SEC continues to scrutinize aspects of the Crypto Asset space, including Bitcoin and Ether.

Previous wording

On December 22, 2020, the SEC instituted proceedings to enjoin Ripple Labs Inc., the creator of XRP, on the basis that the offer and sale of XRP was an unregistered, ongoing offering of securities in violation of Sections 5(a) and 5(c) of the Securities Act. On December 23, 2020, the Trust made a decision to liquidate its position in XRP based on consideration of new public information from the SEC’s complaint. The Trust immediately reinvested the proceeds from the liquidated position in other Portfolio Crypto Assets, primarily Bitcoin and Ethereum, but subsequently re-invested in XRP. The SEC case against Ripple Labs Inc. remains ongoing. In July 2023, the U.S. District Court for the Southern District of New York found that institutional sales of XRP violated federal securities laws, while programmatic sales on public exchanges did not constitute securities transactions. In August 2024, the court ordered Ripple to pay a $125 million civil penalty. The SEC has since appealed the court's ruling on programmatic sales, seeking clarity on XRP's regulatory status in secondary market transactions, with the appeal currently pending before the Second Circuit Court of Appeals. In a June 2023 action against Coinbase, Inc., the SEC alleged, among other things, that the Portfolio Crypto Assets Solana (SOL) and Cardano (ADA), constituted unregistered securities. Coinbase has vigorously contested the claims against it, and the case remains ongoing.

Current wording

The SEC previously instituted proceedings to enjoin Ripple Labs Inc., the creator of XRP, on the basis that the offer and sale of XRP was an unregistered, ongoing offering of securities in violation of Sections 5(a) and 5(c) of the Securities Act. The SEC case against Ripple Labs Inc. remains ongoing. In July 2023, the U.S. District Court for the Southern District of New York found that institutional sales of XRP violated federal securities laws, while programmatic sales on public exchanges did not constitute securities transactions. In August 2024, the court ordered Ripple to pay a $125 million civil penalty. The SEC has since appealed the court's ruling on programmatic sales, seeking clarity on XRP's regulatory status in secondary market transactions, with the appeal currently pending before the Second Circuit Court of Appeals. In a June 2023 action against Coinbase, Inc., the SEC alleged, among other things, that the Portfolio Crypto Assets Solana (SOL) and Cardano (ADA), constituted unregistered securities. Coinbase has vigorously contested the claims against it, and the case remains ongoing.

Previous wording

In addition, the CFTC has asserted regulatory jurisdiction over both Bitcoin and Ether futures markets, having classified these Crypto Assets as “commodities” under the Commodity Exchange Act (“CEA”). This designation would grant the CFTC authority to prosecute fraud and manipulation in the cash, or spot, markets for Bitcoin and Ether; however, its oversight of these spot markets is generally limited unless transactions involve leverage, collateral, or financing. The National Futures Association ("NFA") serves as the self-regulatory organization for the U.S. futures industry, including Bitcoin and Ether futures, but does not oversee their respective spot markets. Recent enforcement actions by the CFTC underscore its heightened scrutiny of Crypto Asset markets. In 2023, the CFTC launched multiple actions against crypto firms—targeting high-profile entities and executives such as FTX, Binance, and Coinbase—for violations including illegal off-exchange commodity trading and inadequate anti-money laundering controls.

Current wording

In addition, the CFTC has asserted regulatory jurisdiction over both Bitcoin and Ether futures markets, having classified these Crypto Assets as “commodities” under the Commodity Exchange Act (“CEA”). This designation would grant the CFTC authority to prosecute fraud and manipulation in the cash, or spot, markets for Bitcoin and Ether; however, its oversight of these spot markets is generally limited unless transactions involve leverage, collateral, or financing. The National Futures Association (“NFA”) serves as the self-regulatory organization for the U.S. futures industry, including Bitcoin and Ether futures, but does not oversee their respective spot markets. Recent enforcement actions by the CFTC underscore its heightened scrutiny of Crypto Asset markets. In 2023, the CFTC launched multiple actions against crypto firms—targeting high-profile entities and executives such as FTX, Binance, and Coinbase—for violations including illegal off-exchange commodity trading and inadequate anti-money laundering controls. In September 2025, SEC and CFTC staff issued a joint statement regarding the trading of certain spot crypto asset products on CFTC-registered designated contract markets, and in December 2025 the CFTC announced the first-ever listed spot crypto contract and withdrew certain interpretive guidance relating to retail commodity transactions involving digital assets. These developments illustrate that the scope of CFTC oversight relating to digital assets and spot digital asset markets remains subject to change.

Previous wording

Federal and state regulators including FinCEN and OFAC have been examining Crypto Asset Networks, Crypto Asset users and the Crypto Asset markets, with particular focus on the extent to which Crypto Assets can be used to launder the proceeds of illegal activities, evade sanctions, or fund criminal or terrorist enterprises. For example, certain privacy-enhancing features have been, or are expected to be, introduced to a number of Crypto Asset Networks, and these features may provide law enforcement agencies with less visibility into transaction-level data. Europol, the European Union’s law enforcement agency, released a report in October 2017 noting the increased use of privacy-enhancing Crypto Assets like Zcash and Monero in criminal activity on the internet. In August 2022, OFAC banned all transactions by U.S. persons or in the United States involving Tornado Cash, a Crypto Asset protocol designed to obfuscate Blockchain transactions, by adding Tornado Cash and certain Ethereum wallet addresses associated with the protocol to its Specially Designated Nationals and Blocked Persons List. A large portion of Validators globally, as well as notable industry participants such as Centre, the issuer of the USDC stablecoin, have reportedly complied with the sanctions and blacklisted the sanctioned addresses from interacting with their networks. In October 2023, FinCEN issued a notice of proposed rulemaking that identified convertible virtual currency ("CVC") mixing as a class of transactions of primary money laundering concern and proposed requiring covered financial institutions to implement certain recordkeeping and reporting requirements on transactions that covered financial institutions know, suspect, or have reason to suspect involve CVC mixing within or involving jurisdictions outside the United States. The DOJ has also arrested and charged the developers of certain Crypto Asset Networks and Crypto Assets for crimes related to money laundering and other offenses.

Current wording

Federal and state regulators including FinCEN and OFAC have been examining Crypto Asset Networks, Crypto Asset users and the Crypto Asset markets, with particular focus on the extent to which Crypto Assets can be used to launder the proceeds of illegal activities, evade sanctions, or fund criminal or terrorist enterprises. For example, certain privacy-enhancing features have been, or are expected to be, introduced to a number of Crypto Asset Networks, and these features may provide law enforcement agencies with less visibility into transaction-level data. Europol, the European Union’s law enforcement agency, released a report in October 2017 noting the increased use of privacy-enhancing Crypto Assets like Zcash and Monero in criminal activity on the internet. In August 2022, OFAC banned all transactions by U.S. persons or in the United States involving Tornado Cash, a Crypto Asset protocol designed to obfuscate Blockchain transactions, by adding Tornado Cash and certain Ethereum wallet addresses associated with the protocol to its Specially Designated Nationals and Blocked Persons List. In March 2025, OFAC removed Tornado Cash from the Specially Designated Nationals and Blocked Persons List. However, U.S. sanctions policy and enforcement priorities relating to mixers, sanctions evasion, and other illicit finance risks involving digital assets may change, and DeFi protocols, service providers, and users may continue to face sanctions-related risks. A large portion of Validators globally, as well as notable industry participants such as Centre, the issuer of the USDC stablecoin, have reportedly complied with the sanctions and blacklisted the sanctioned addresses from interacting with their networks. In October 2023, FinCEN issued a notice of proposed rulemaking that identified convertible virtual currency (“CVC”) mixing as a class of transactions of primary money laundering concern and proposed requiring covered financial institutions to implement certain recordkeeping and reporting requirements on transactions that covered financial institutions know, suspect, or have reason to suspect involve CVC mixing within or involving jurisdictions outside the United States. The DOJ has also arrested and charged the developers of certain Crypto Asset Networks and Crypto Assets for crimes related to money laundering and other offenses.

Previous wording

If a Crypto Asset Network of a Portfolio Crypto Asset held by the Trust is used to facilitate illicit activities, businesses that facilitate transactions in such Portfolio Crypto Asset could be at increased risk of potential criminal or civil lawsuits, or of having banking or other services cut off, and such Portfolio Crypto Asset could be removed from Crypto Asset trading platforms. Moreover, law enforcement agencies and other market participants have often relied on the transparency of Blockchains to facilitate investigations and comply with laws, such as anti-money laundering and economic sanctions laws. If any of the Portfolio Crypto Assets contain privacy-enhancing features, law enforcement agencies and other market participants may have less visibility into transaction-level data, which may encourage bad actors to misuse such Portfolio Crypto Asset’s network for such illicit purposes. Businesses that facilitate transactions in those Portfolio Crypto Assets may be at increased risk of potential criminal or civil lawsuits, or of having banking services cut off if there is a concern that these features interfere with the performance of anti-money laundering duties and economic sanctions checks. In August 2019, for example, Coinbase UK delisted another privacy-oriented Crypto Asset, Zcash, and in January 2021 Bittrex delisted Zcash as well as Monero and Dash, two other privacy-focused Crypto Assets. Although neither trading platform disclosed the reasons for such delisting, and both trading platforms subsequently relisted Zcash, it has been reported in the media that they were de-listed due to the privacy-enhancing features of the Crypto Assets. Thus, there is a risk that Crypto Asset trading platforms could remove any Portfolio Crypto Assets containing privacy-enhancing features in the future. Any such occurrences could adversely affect the price of the relevant Portfolio Crypto Asset, the attractiveness of the respective Crypto Asset Network and an investment in the Shares of the Trust.

Current wording

If a Crypto Asset Network of a Portfolio Crypto Asset held by the Trust is used to facilitate illicit activities, businesses that facilitate transactions in such Portfolio Crypto Asset could be at increased risk of potential criminal or civil lawsuits, or of having banking or other services cut off, and such Portfolio Crypto Asset could be removed from Crypto Asset trading platforms. Moreover, law enforcement agencies and other market participants have often relied on the transparency of Blockchains to facilitate investigations and comply with laws, such as anti-money laundering and economic sanctions laws. If any of the Portfolio Crypto Assets contain privacy-enhancing features, law enforcement agencies and other market participants may have less visibility into transaction-level data, which may encourage bad actors to misuse such Portfolio Crypto Asset’s network for such illicit purposes. Businesses that facilitate transactions in those Portfolio Crypto Assets may be at increased risk of potential criminal or civil lawsuits, or of having banking services cut off if there is a concern that these features interfere with the performance of anti-money laundering duties and economic sanctions checks. Any such occurrences could adversely affect the price of the relevant Portfolio Crypto Asset, the attractiveness of the respective Crypto Asset Network and an investment in the Shares of the Trust.

Previous wording

On January 23, 2025, President Trump issued Executive Order 14178, titled “Strengthening American Leadership in Digital Financial Technology,” which revoked President Biden’s March 2022 Executive Order 14067, “Ensuring Responsible Development of Digital Assets.” Among other things, Trump’s order establishes the President’s Working Group on Digital Asset Markets, tasked with proposing a federal regulatory framework for digital assets within 180 days. This working group is directed to focus on fostering innovation, reducing regulatory burdens, and ensuring U.S. competitiveness in global digital financial markets.

Current wording

On January 23, 2025, President Trump issued Executive Order 14178, titled “Strengthening American Leadership in Digital Financial Technology,” which revoked President Biden’s March 2022 Executive Order 14067, “Ensuring Responsible Development of Digital Assets.” Among other things, Trump’s order establishes the President’s Working Group on Digital Asset Markets, tasked with proposing a federal regulatory framework for digital assets within 180 days. This working group is directed to focus ondeveloping policy recommendations, including potential legislative and regulatory proposals relating to digital asset market structure and stablecoins. In July 2025, the White House released a report described as fulfilling the executive order’s 180-day report requirement. In addition, on March 6, 2025, President Trump issued an executive order establishing a “Strategic Bitcoin Reserve” and a “U.S. Digital Asset Stockpile,” which could affect digital asset markets and increase regulatory and public policy attention to digital assets.

Previous wording

Trump’s executive order follows ongoing legislative efforts to establish a comprehensive regulatory framework for digital assets. On May 22, 2024, the U.S. House of Representatives passed the Financial Innovation and Technology for the 21st Century Act (“Fit21”), advancing efforts to establish a federal framework for digital assets. Fit21 seeks to clarify the SEC’s and CFTC’s jurisdiction, granting the CFTC primary oversight of digital commodities while preserving the SEC’s authority over securities. Alongside Fit21, other proposals aim to refine digital asset classifications, disclosure requirements, and tax treatment. However, the future of these regulatory efforts, and how regulatory authority may be divided among regulators, remains uncertain.

Current wording

President Trump’s executive order follows ongoing legislative efforts to establish a comprehensive regulatory framework for digital assets. On May 22, 2024, the U.S. House of Representatives passed the Financial Innovation and Technology for the 21st Century Act (“Fit21”), advancing efforts to establish a federal framework for digital assets. Fit21 seeks to clarify the SEC’s and CFTC’s jurisdiction, granting the CFTC primary oversight of digital commodities while preserving the SEC’s authority over securities. Alongside Fit21, other proposals aim to refine digital asset classifications, disclosure requirements, and tax treatment. However, the future of these regulatory efforts, and how regulatory authority may be divided among regulators, remains uncertain. For example, on July 17, 2025, the U.S. House of Representatives passed the Digital Asset Market Clarity Act of 2025, and on July 18, 2025, President Trump signed the GENIUS Act into law establishing a federal framework for certain payment stablecoins. In addition, on April 10, 2025, President Trump signed legislation disapproving an IRS rule that would have expanded certain digital asset tax reporting requirements to certain DeFi participants. There can be no assurance whether, when, or in what form additional federal digital asset legislation will be enacted or how any such legislation will affect ether, the Trust, or the Shares.

Previous wording

Crypto Assets, including Portfolio Crypto Assets, currently face an uncertain regulatory landscape in many foreign jurisdictions such as the European Union, China, the United Kingdom, Australia, Russia, Israel, Poland, India and Canada. Cybersecurity attacks by state actors, particularly for the purpose of evading international economic sanctions, are likely to attract additional regulatory scrutiny to the acquisition, ownership, sale and use of Crypto Assets, including Portfolio Crypto Assets. Various foreign jurisdictions have adopted, and may continue to adopt in the near future, laws, regulations or directives that affect Crypto Assets, particularly with respect to Crypto Asset exchanges, trading venues and service providers that fall within such jurisdictions’ regulatory scope. Some countries have classified Crypto Assets broadly as “securities,” while others, like Switzerland, Malta, and Singapore, have adopted a more nuanced approach. As a result, Crypto Assets may be considered securities in one country but not in another.

Current wording

Crypto Assets, including Portfolio Crypto Assets, currently face an uncertain regulatory landscape in many foreign jurisdictions such as the European Union, China, the United Kingdom, Australia, Russia, Israel, India and Canada. Cybersecurity attacks by state actors, particularly for the purpose of evading international economic sanctions, are likely to attract additional regulatory scrutiny to the acquisition, ownership, sale and use of Crypto Assets, including Portfolio Crypto Assets. Various foreign jurisdictions have adopted, and may continue to adopt in the near future, laws, regulations or directives that affect Crypto Assets, particularly with respect to Crypto Asset exchanges, trading venues and service providers that fall within such jurisdictions’ regulatory scope. Some countries have classified Crypto Assets broadly as “securities,” while others, like Switzerland, Malta, and Singapore, have adopted a more nuanced approach. As a result, Crypto Assets may be considered securities in one country but not in another.

Previous wording

The European Union’s Markets in Crypto-Assets ("MiCA") regulation recently took effect and seeks to establish a comprehensive framework for crypto assets, including stablecoins and crypto-asset service providers. Beyond the EU, the United Kingdom’s Financial Services and Markets Act expands the Financial Conduct Authority’s ("FCA") oversight of crypto activities, enabling further regulation of stablecoins and other crypto assets. The Monetary Authority of Singapore ("MAS") has also introduced stablecoin regulations under its Payment Services Act, and China has maintained strict scrutiny of Crypto Assets following its 2021 prohibition of Mining.

Current wording

The European Union’s Markets in Crypto-Assets (“MiCA”) regulation seeks to establish a comprehensive framework for crypto assets, including stablecoins and crypto-asset service providers. Beyond the EU, the United Kingdom’s Financial Services and Markets Act expands the Financial Conduct Authority’s (“FCA”) oversight of crypto activities, enabling further regulation of stablecoins and other crypto assets. The Monetary Authority of Singapore (“MAS”) has also introduced stablecoin regulations under its Payment Services Act, and China has maintained strict scrutiny of Crypto Assets following its 2021 prohibition of Mining.