Sharplink, Inc.
For the period ended Mar 31, 2026. Filed May 8, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 8, 2026
SBET$6.24-2.8%Stored close · as of Nov 6, 2026
What changed in Risk Factors?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-12.
0001493152-25-021970
Item 1A. RISK FACTORSUNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDSDEFAULTS UPON SENIOR SECURITIESMINE SAFETY DISCLOSURESOTHER INFORMATIONCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-08.
0001493152-26-021981
ITEM 1A. RISK FACTORSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 141 previous paragraphs and 140 current paragraphs.
112 unchanged; 15 reworded; 12 added; 14 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 15 previous and 5 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (12)
Current report
Although the SEC and CFTC have issued joint interpretive guidance identifying ETH as a “digital commodity” rather than a “digital security,” that guidance is non-binding and could be modified or rejected by a court, and any determination that ETH is a “security” would subject us to additional regulation and could materially impact the operation of our business.
Current report
On March 17, 2026, the U.S. Securities and Exchange Commission (“SEC”), joined by the U.S. Commodity Futures Trading Commission (“CFTC”), issued a joint interpretation (the “Joint Interpretation”) clarifying the application of the federal securities laws to crypto assets and establishing a taxonomy of five categories: “digital commodities,” “digital collectibles,” “digital tools,” “stablecoins,” and “digital securities.” The Joint Interpretation expressly identifies ETH as an example of a digital commodity, and the SEC and CFTC have each stated that they will administer their respective statutes consistent with the Joint Interpretation. The Joint Interpretation is consistent with our long-held view, described below, that ETH is not a “security” within the meaning of the U.S. federal securities laws and that registration of the Company under the Investment Company Act of 1940, as amended (the “Investment Company Act”), is therefore not required under the applicable securities laws.
Current report
The Joint Interpretation is interpretive guidance rather than a rulemaking and does not itself have the force of law. It could be modified, withdrawn, or superseded by future SEC or CFTC leadership, narrowed or invalidated through judicial challenge, or rendered obsolete by subsequent legislation or rulemaking. Federal and state courts are not bound by the Joint Interpretation, and the ultimate legal question of whether any particular digital asset, or any particular transaction involving a digital asset, is a “security” remains subject to judicial determination under tests articulated by the U.S. Supreme Court, including in the Howey and Reves cases. In addition, the Joint Interpretation acknowledges that a crypto asset that is not itself a security may nonetheless become subject to an “investment contract” depending on the manner in which it is offered or sold, so classification of ETH as a digital commodity does not foreclose the possibility that particular transactions involving ETH could be characterized as securities transactions.
Current report
Notwithstanding the Joint Interpretation and our own conclusion, we acknowledge that a federal or state court, state securities regulator, future SEC or CFTC leadership, or private plaintiff could take a different view as to the status of ETH or any particular transaction involving ETH. State “blue sky” regulators are not formally bound by the Joint Interpretation, and private litigants are not bound by the views of any federal regulator. Application of securities laws to the specific facts and circumstances of digital assets is complex and subject to change. As such, we remain at risk of private litigation, state enforcement proceedings, and — in the event the Joint Interpretation is modified, withdrawn, or judicially rejected — federal enforcement proceedings, any of which could result in potential injunctions, cease-and-desist orders, fines, penalties, damages, or a requirement that we register as an investment company under the Investment Company Act, and any of which could adversely affect our business, results of operations, financial condition and prospects.
Current report
The Joint Interpretation is interpretive guidance rather than a rulemaking, and it does not itself have the force of law. It could be modified, withdrawn, or superseded by future SEC or CFTC leadership, narrowed or invalidated through judicial challenge, or rendered obsolete by subsequent legislation or rulemaking. No assurance can be given that ETH will continue to be treated as a digital commodity under this or any future guidance, or that the current allocation of jurisdiction between the SEC and CFTC with respect to ETH and other digital assets will remain unchanged. A change in ETH’s regulatory classification, or in the coordinated posture between the SEC and the CFTC, could materially increase our compliance burden, restrict our ability to hold or transact in ETH, and adversely affect the market price of ETH and the market price of our listed securities.
Current report
Consistent with the Executive Order and the July 2025 working group report, on March 17, 2026, the U.S. Securities and Exchange Commission (“SEC”), joined by the CFTC, issued a joint interpretation (the “Joint Interpretation”) clarifying the application of the federal securities laws to crypto assets. The Joint Interpretation establishes a taxonomy of five categories — “digital commodities,” “digital collectibles,” “digital tools,” “stablecoins,” and “digital securities” — and expressly identifies ETH as an example of a digital commodity. The SEC and CFTC have each stated that they will administer their respective statutes consistent with the Joint Interpretation. While we believe the Joint Interpretation provides meaningful additional clarity regarding the regulatory status of ETH, it is interpretive guidance rather than a rulemaking, does not itself have the force of law, and is not binding on federal or state courts, state securities regulators, or private litigants. The Joint Interpretation could be modified, withdrawn, or superseded by future SEC or CFTC leadership, narrowed or invalidated through judicial challenge, or rendered obsolete by subsequent legislation or rulemaking, and it also acknowledges that a crypto asset that is not itself a security may nonetheless become subject to an “investment contract” depending on the manner in which it is offered or sold.
Current report
Because stablecoins purport to be backed by underlying reserve assets, a fundamental issue in the event of the bankruptcy or insolvency of the issuer of a given stablecoin is which party possesses beneficial ownership of the underlying reserve assets: the holder of the stablecoin, or the issuer. If a particular stablecoin were structured in a manner that entitles its holder only to a contractual right to payment from the issuer (even if such payments are to be derived from the underlying assets), then the assets underlying the stablecoins may be considered to be the property of the issuer’s bankruptcy estate, such that all of the issuer’s creditors would be entitled to their pro rata share of such assets, with the stablecoin holder being treated as an unsecured creditor of the issuer. In such an event, if the issuer were to have insufficient funds or assets to satisfy the claims of its
Current report
creditors, then the holder of a stablecoin would likely receive only a partial recovery, and not the full purported value of its stablecoin holdings. Conversely, if a particular stablecoin were structured in a manner that entitles its holder to absolute beneficial ownership of the underlying reserve assets, whereby the issuer holds bare legal title to the underlying assets but has no beneficial interest or property rights in such assets, then the holders would likely have a stronger claim on the underlying assets in the event of a bankruptcy or insolvency of the issuer. However, due to the novelty of stablecoins, courts have not yet considered the treatment of underlying reserve assets in the context of a bankruptcy or insolvency of a stablecoin issuer, and there can be no certainty as to a court’s determination in such circumstances.
Current report
Liquid restaking activities also involve risks beyond those associated with native staking or liquid staking. In a liquid restaking arrangement, the underlying ETH (or its receipt token) is used to provide cryptoeconomic security not only to the Ethereum proof-of-stake protocol but also to additional services, such as the EigenCloud Autonomous Verifiable Services (“AVSs”) that we secure through ether.fi. This exposes our underlying ETH to potential slashing, forfeiture or other penalties arising from issues outside of the Ethereum staking protocol itself, including operational failures, validator or operator misconduct, or technical problems with the AVSs being secured. The AVSs and other services secured through restaking are themselves new, with limited operating history, and there can be no assurance that they will function as designed. We have deployed a portion of our ETH treasury into weETH issued by ether.fi, and any losses sustained in connection with that deployment — whether from slashing, smart contract exploits, protocol failure or otherwise — could have a material adverse effect on our financial condition, results of operations and the market price of our Common Stock. In addition, we have bridged weETH from the Ethereum mainnet to Linea, a zkEVM Layer 2 network, using ether.fi’s weETH OFT bridge powered by LayerZero v2. Cross-chain bridges have historically been a frequent target of exploits in decentralized finance, and any failure, vulnerability or exploit affecting the bridge, the messaging layer or the destination network — or any disruption to or change in the Linea sequencer, prover, governance or future upgrades — could result in delays in accessing, or partial or total loss of, the weETH we have bridged.
Current report
The AI industry is subject to developing and evolving regulatory frameworks globally, which are expected to become increasingly complex as AI continues to evolve, and our efforts to, or our failure or inability to comply with, these regulations or regulatory action against us could adversely affect our results of operations, financial condition or business.
Current report
The rapid pace of innovation in the field of AI has led to developing and evolving regulatory frameworks globally, which are expected to become increasingly complex. U.S. and regulators and lawmakers have started proposing and adopting, or are currently considering, regulations and guidance specifically on the use of AI. In the U.S., there is ongoing tension between the states and the federal government over how best to regulate the use of AI. Colorado passed a Consumer Protections for Artificial Intelligence bill introducing state-level oversight of “high-risk” AI systems. It is possible that new laws and regulations will be adopted in the U.S. and in non-U.S. jurisdictions, or that existing laws and regulations may be interpreted, in ways that would affect our operations. We may be unable to anticipate or respond to these changes, and may need to expend additional resources to adjust our offerings where legal frameworks diverge. Further, the cost to comply with such laws or regulations could be significant and would increase our operating expenses, which could adversely affect our business, financial condition and results of operations.
Removed paragraphs (14)
Previous report
Absent federal regulations, there is a possibility that ETH may be classified as a“security.”Any classification of ETH as a“security”would subject us to additional regulation and could materially impact the operation of our business.
Previous report
Neither the SEC nor any other U.S. federal or state regulator has publicly stated whether they agree that ETH is a “security.” Despite the Executive Order titled “Strengthening American Leadership in Digital Financial Technology” which includes as an objective, “protecting and promoting the ability of individual citizens and private sector entities alike to access and … to maintain self-custody of digital assets,” ETH has not yet been classified with respect to U.S. federal securities laws. Therefore, while (for the reasons discussed below) we believe that ETH is not a “security” within the meaning of the U.S. federal securities laws, and registration of the Company under The Investment Company Act of 1940, as amended (the “Investment Company Act”) is therefore not required under the applicable securities laws, we acknowledge that a regulatory body or federal court may determine otherwise. Our belief, even if reasonable under the circumstances, would not preclude legal or regulatory action based on such a finding that ETH is a “security” which would require us to register as an investment company under the Investment Company Act.
Previous report
We acknowledge, however, that the SEC, a federal court or another relevant entity could take a different view. The regulatory treatment of ETH is such that it has drawn significant attention from legislative and regulatory bodies. Application of securities laws to the specific facts and circumstances of digital assets is complex and subject to change. Our conclusion, even if reasonable under the circumstances, would not preclude legal or regulatory action based on a finding that ETH, or any other digital asset we might hold is a “security.” As such, we are at risk of enforcement proceedings against us, which could result in potential injunctions, cease-and-desist orders, fines, and penalties if Ether was determined to be a security by a regulatory body or a court. Such developments could subject us to fines, penalties, and other damages, and adversely affect our business, results of operations, financial condition and prospects.
Previous report
Changes in the governance of a digital asset network or protocol may not receive sufficient support from users and validators, which may negatively affect that digital asset network’s or protocol’s ability to grow and respond to challenges.
Previous report
The governance of some digital asset networks and protocols, such as the Ethereum Network, is generally by voluntary consensus and open competition. For such networks and protocols, there may be a lack of consensus or clarity on that network’s or protocol’s governance, which may stymie such network’s or protocol’s utility, adaptability and ability to grow and face challenges. The foregoing notwithstanding, the underlying software for some digital asset networks and protocols, such as the Ethereum Network, is informally or formally managed or developed by a group of core developers that propose amendments to the relevant network’s or protocol’s source code. Core developers’ roles may evolve over time, generally based on self-determined participation. If a significant majority of users and validators were to adopt amendments to a decentralized network based on the proposals of such core developers, such network would be subject to new source code that may adversely affect the value of the relevant digital asset. As a result of the foregoing, it may be difficult to find solutions or marshal sufficient effort to overcome any future problems, especially long-term problems, on digital asset networks.
Previous report
If we are unable to recruit or retain skilled personnel, or if we lose the services of our Chairman of the Board of Directors and Co-Chief Executive Officers, our business, operating results, and financial condition could be materially adversely affected.
Previous report
Our future success depends on our continuing ability to attract and retain highly skilled personnel. Competition for employees is intense. We may not be able to retain our current key employees or attract, train, and retain other highly skilled personnel in the future. Competition for qualified employees in the technology industry has historically been high. Our future success also depends in large part on the continued service of Joseph Lubin, our Chairman of the Board of Directors, Rob Phythian and Joseph Chalom as Co-Chief Executive Officers of the Company, and Robert DeLucia, Chief Financial Officer of the Company. If we lose the services of Messrs. Lubin, Phythian, Chalom or DeLucia, or if we are unable to attract, train and retain the highly skilled personnel we need, our business, operating results and financial condition could be materially adversely affected.
Previous report
On August 21, 2025, the Board authorized a share repurchase program under which the Company may repurchase up to $1.5 billion of its outstanding Common Stock. As of September 30, 2025, the Company has repurchased 1,938,540 of its outstanding Common Stock for $31,692,488.
Previous report
The following table sets forth repurchases of our Common Stock during the three months ended September 30, 2025:
Previous report
None of the Company’s directors or officers adopted, modified orterminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement, as such terms are defined under Item 408(a) of Regulation S-K, during the Company’s fiscal quarter ended September 30, 2025.
Previous report
During the quarter ended September 30, 2025, the Company’s Board approved and adopted an Amended and Restated Insider Trading Policy as part of its continuing efforts to enhance corporate governance and ensure compliance with applicable securities laws and Nasdaq listing standards. The updated policy clarifies procedures regarding trading windows, pre-clearance requirements and restrictions on derivative and hedging transactions involving Company securities. The adoption of the amended policy did not have a material effect on the Company’s financial position, results of operations or internal controls. Management will continue to monitor and enforce the policy as part of its overall compliance program.
Reworded paragraphs (15)
Previous wording
We have also adapted our process for analyzing the U.S. federal securities law status of ETH and other cryptocurrencies over time, as guidance and case law have evolved. As part of our U.S. federal securities law analytical process, we take into account a number of factors, including the various definitions of “security” under U.S. federal securities laws and federal court decisions interpreting the elements of these definitions, such as the U.S. Supreme Court’s decisions in theHowey andReves cases, as well as court rulings, reports, orders, press releases, public statements, and speeches by the SEC Commissioners and SEC Staff providing guidance on when a digital asset or a transaction to which a digital asset may relate may be a security for purposes of U.S. federal securities laws. Our position that ETH is not a “security” is premised, among other reasons, on our conclusion ETH does not meet the elements of theHowey test. Among the reasons for our conclusion that ETH is not a security is that holders of ETH do not have a reasonable expectation of profits from our efforts in respect of their holding of ETH. Also, ETH ownership does not convey the right to receive any interest, rewards, or other returns.
Current wording
We have adapted, and expect to continue to adapt, our process for analyzing the U.S. federal securities law status of ETH and other cryptocurrencies over time, as guidance, interpretive releases, and case law have evolved. As part of our U.S. federal securities law analytical process, we take into account a number of factors, including the various definitions of “security” under U.S. federal securities laws and federal court decisions interpreting the elements of these definitions, such as the U.S. Supreme Court’s decisions in the Howey and Reves cases, as well as court rulings, reports, orders, press releases, public statements, and speeches by the SEC Commissioners and SEC Staff — including, most recently, the Joint Interpretation — providing guidance on when a digital asset, or a transaction to which a digital asset may relate, may be a security for purposes of U.S. federal securities laws. Our position that ETH is not a “security” is premised, among other reasons, on our conclusion that ETH does not meet the elements of the Howey test. Among the reasons for our conclusion that ETH is not a security is that holders of ETH do not have a reasonable expectation of profits from our efforts in respect of their holding of ETH. Also, ETH ownership does not convey the right to receive any interest, rewards, or other returns.
Previous wording
Legislative or regulatory change regarding the regulation of“commodities”by the Commodities Futures Trading Commission (“CFTC”) and the potential regulation of digital assets as“digital commodities”could subject us to additional regulatory burdens and oversight by the CFTC and could adversely affect the market price of ETH and the market price of our listed securities.
Current wording
Regulatory developments regarding the classification of digital assets as “commodities” or “digital commodities” by the Commodities Futures Trading Commission (“CFTC”), including recent joint SEC-CFTC interpretive guidance and pending legislation, could subject us to additional regulatory burdens and oversight by the CFTC and could adversely affect the market price of ETH and the market price of our listed securities.
Previous wording
The CFTC has stated it believes, and judicial decisions involving CFTC enforcement actions have confirmed, that at least some digital assets fall within the definition of a “commodity” under the U.S. Commodities Exchange Act of 1936 (the “CEA”) and the rules promulgated by the CFTC thereunder (“CFTC Rules”). While the CFTC has enforcement authority to police against fraud and manipulation in spot commodity markets (including the spot market for digital assets that are commodities), the CFTC only has regulatory and supervisory jurisdiction with respect to “commodity interest” transactions, such as futures, options, and swaps on a commodity (including a digital asset commodity) and certain leveraged, margined, or financed transactions in commodities involving retail customers. Accordingly, we are not currently regulated or supervised by the CFTC and are not subject to the legal and regulatory obligations that are applicable to CFTC-registered entities under the CEA and CFTC Rules.
Current wording
While the CFTC has enforcement authority to police against fraud and manipulation in spot commodity markets (including the spot market for digital assets that are commodities), the CFTC continues to have regulatory and supervisory jurisdiction only with respect to “commodity interest” transactions, such as futures, options, and swaps on a commodity (including a digital asset commodity) and certain leveraged, margined, or financed transactions in commodities involving retail customers. The Joint Interpretation did not expand the CFTC’s statutory jurisdiction over spot digital asset activities. Accordingly, we are not currently regulated or supervised by the CFTC and are not subject to the legal and regulatory obligations that are applicable to CFTC-registered entities under the CEA and CFTC Rules.
Previous wording
The regulation of digital assets in the U.S. is subject to change because of the enactment and adoption of new laws and regulations. For example, the proposed CLARITY Act recently passed by the U.S. House of Representatives and other draft digital asset market structure and regulation bills have proposed granting the CFTC additional regulatory and supervisory powers with respect to spot digital assets as “digital commodities.” While it is not possible to predict if and in what form such proposals will be adopted, if any, changes to or expansion of the jurisdiction of the CFTC with respect to activities in spot digital assets could result in the imposition of additional regulatory obligations and burdens, which could include registration, disclosure, reporting, and business conduct requirements. For example, it is possible that if the CLARITY Act were to become law as currently proposed, our ETH Treasury Management strategy could cause us to be deemed a “commodity pool” under the CEA such that our operators and advisors may need to register with the CFTC as commodity pool operators and comply with other CFTC regulations as well as the rules of the National Futures Association. Such additional regulatory burdens and oversight could materially increase the cost of our business, could adversely affect the market price of ETH, and in turn could adversely affect the market price of our listed securities.
Current wording
The regulation of digital assets in the U.S. also remains subject to change through the enactment and adoption of new laws and regulations, and the Joint Interpretation is expressly intended to complement, rather than substitute for, Congressional market structure legislation. The proposed CLARITY Act passed by the U.S. House of Representatives, and other draft digital asset market structure and regulation bills, have proposed granting the CFTC additional regulatory and supervisory powers with respect to spot digital assets as “digital commodities.” While it is not possible to predict if and in what form such proposals will be adopted, if any, changes to or expansion of the jurisdiction of the CFTC with respect to activities in spot digital assets could result in the imposition of additional regulatory obligations and burdens, which could include registration, disclosure, reporting, and business conduct requirements. For example, it is possible that if the CLARITY Act were to become law as currently proposed, our ETH Treasury Management strategy could cause us to be deemed a “commodity pool” under the CEA such that our operators and advisors may need to register with the CFTC as commodity pool operators and comply with other CFTC regulations as well as the rules of the National Futures Association. Such additional regulatory burdens and oversight could materially increase the cost of our business, could adversely affect the market price of ETH, and in turn could adversely affect the market price of our listed securities.
Previous wording
As digital assets are relatively novel and the application of state and federal securities laws and other laws and regulations to digital assets are unclear in certain respects, it is possible that regulators in the United States or foreign countries may interpret or apply existing laws and regulations in a manner that adversely affects the price of digital assets. The U.S. federal government, states, regulatory agencies, and foreign countries may also enact new laws and regulations, or pursue regulatory, legislative, enforcement or judicial actions, that could materially impact the price of digital assets or the ability of individuals or institutions such as us to own or transfer digital assets.
Current wording
As digital assets are relatively novel and the application of state and federal securities laws and other laws and regulations to digital assets is still evolving, it is possible that regulators in the United States or foreign countries may interpret or apply existing laws and regulations in a manner that adversely affects the price of digital assets. The U.S. federal government, states, regulatory agencies, and foreign countries may also enact new laws and regulations, or pursue regulatory, legislative, enforcement or judicial actions, that could materially impact the price of digital assets or the ability of individuals or institutions such as us to own or transfer digital assets.
Previous wording
There have also been several bills introduced in Congress that propose to establish additional regulation and oversight of the digital asset markets. For example, the CLARITY Act was passed by the House of Representatives in July 2025, which would, if enacted, regulate digital asset markets and digital asset trading platforms in the United States. In addition, also in July 2025, the Guiding and Establishing National Innovation for U.S. Stablecoins Act of 2025 (the “GENIUS Act”) became the first federal law specifically regulating the issuance, custody and other stablecoin-related matters in the United States. It is difficult to predict whether, or when, the CLARITY Act or another bill that would regulate digital asset markets and digital asset trading platforms may become law or what any such bill may entail.
Current wording
There have also been several bills introduced in Congress that propose to establish additional regulation and oversight of the digital asset markets. For example, the CLARITY Act was passed by the House of Representatives in July 2025, which would, if enacted, regulate digital asset markets and digital asset trading platforms in the United States and provide statutory backing for the allocation of jurisdiction between the SEC and CFTC reflected in the Joint Interpretation. In addition, also in July 2025, the Guiding and Establishing National Innovation for U.S. Stablecoins Act of 2025 (the “GENIUS Act”) became the first federal law specifically regulating the issuance, custody and other stablecoin-related matters in the United States. It is difficult to predict whether, or when, the CLARITY Act or another bill that would regulate digital asset markets and digital asset trading platforms may become law or what any such bill may entail.
Previous wording
It is difficult to predict whether, or when, as a result of these developments, Congress will grant additional authorities to the SEC or other regulators, what the nature of such additional authorities might be, how additional legislation and/or regulatory oversight might impact the ability of digital asset markets to function, the willingness of financial and other institutions to continue to provide services to the digital assets industry, or how any new regulations or changes to existing regulations might impact the value of digital assets generally and ETH held by the Company specifically. The consequences of increased federal regulation of digital assets and digital asset activities could have a material adverse effect on our business, results of operations, financial condition, and prospects, as well as the market price of ETH, which in turn could adversely affect the market price of our listed securities.
Current wording
It is difficult to predict whether, or when, as a result of these developments, Congress will grant additional authorities to the SEC, the CFTC, or other regulators, what the nature of such additional authorities might be, how additional legislation and/or regulatory oversight might impact the ability of digital asset markets to function, the willingness of financial and other institutions to continue to provide services to the digital assets industry, or how any new regulations, changes to existing regulations, or changes to or withdrawal of existing interpretive guidance might impact the value of digital assets generally and ETH held by the Company specifically. The consequences of these potential developments, including any narrowing, modification, or withdrawal of the Joint Interpretation, could have a material adverse effect on our business, results of operations, financial condition, and prospects, as well as the market price of ETH, which in turn could adversely affect the market price of our listed securities.
Previous wording
There are also volatility risks related to stablecoins, which are designed to have a relatively stable price relative to an underlying physical asset, most commonly a fiat currency, such as U.S. dollars, or an exchange-traded commodity. The stability of a stablecoin results from the underlying assets backing the stablecoin that are held by the stablecoin’s issuer in reserve accounts, among other factors such as the ability of a holder to redeem the stablecoin from its issuer at par. The issuers of certain stablecoins currently retain broad discretion to determine the composition and amounts of assets held in the issuers’ accounts backing those stablecoins, and to substitute assets other than the fiat currency that is initially deposited. The composition of backing assets varies considerably across popular stablecoins, with some stablecoins backed entirely by off-chain assets including cash or short-term, highly liquid assets, and others backed by assets significantly less liquid than cash or cash equivalents. For example, Circle, which issues USDC, reports that it holds cash and short-term cash equivalents to back its USDC stablecoins. We regularly transact in and hold stablecoins; as of September 30, 2025, USDC is the only stablecoin that we held. A lack of applicable law and regulation has afforded discretion to certain stablecoin issuers to determine the composition and amounts of assets backing those stablecoins. There is a risk that an issuer may be unable to liquidate enough backing assets if it were to face mass redemptions ofits stablecoin, which could cause the price of the stablecoin to deviate from the price of the underlying fiat currency or other asset with which the stablecoin is designed to align in price. In extreme cases, such as a request to immediately redeem all or substantially all of a particular stablecoin in circulation, even stablecoins backed by reserves comprised primarily of cash and cash equivalents may be subject to instability or an inability of the stablecoin issuer to meet all redemption requests, as the market for short-dated U.S. government obligations might not be sufficiently price stable. Market participants have increasingly shown concern about the actual underlying liquidity and reserves for dollar stablecoins such as USDC. For example, according to reports, Circle had more than $3 billion of its USDC reserve funds on deposit at SVB which became temporarily inaccessible when SVB was placed into FDIC receivership in March 2023. Although these funds were ultimately made available, concerns related to Circle’s access to these funds caused USDC to temporarily fall below its$1.00 peg, and the total market capitalization of USDC decreased following this temporary depegging. If a stablecoin issuer were to fail to honor its redemption obligations, this could undermine public confidence in stablecoins and in digital assets more broadly, which could have a widespread impact on the crypto economy, causing the prices o…
Excerpt shortened here; the source contains the full paragraph.
Current wording
There are also volatility risks related to stablecoins, which are designed to have a relatively stable price relative to an underlying physical asset, most commonly a fiat currency, such as U.S. dollars, or an exchange-traded commodity. The stability of a stablecoin results from the underlying assets backing the stablecoin that are held by the stablecoin’s issuer in reserve accounts, among other factors such as the ability of a holder to redeem the stablecoin from its issuer at par. The issuers of certain stablecoins currently retain broad discretion to determine the composition and amounts of assets held in the issuers’ accounts backing those stablecoins, and to substitute assets other than the fiat currency that is initially deposited. The composition of backing assets varies considerably across popular stablecoins, with some stablecoins backed entirely by off-chain assets including cash or short-term, highly liquid assets, and others backed by assets significantly less liquid than cash or cash equivalents. For example, Circle, which issues USDC, reports that it holds cash and short-term cash equivalents to back its USDC stablecoins. We regularly transact in and hold stablecoins; as of December 31, 2025, USDC is the only stablecoin that we held. A lack of applicable law and regulation has afforded discretion to certain stablecoin issuers to determine the composition and amounts of assets backing those stablecoins. There is a risk that an issuer may be unable to liquidate enough backing assets if it were to face mass redemptions of its stablecoin, which could cause the price of the stablecoin to deviate from the price of the underlying fiat currency or other asset with which the stablecoin is designed to align in price. In extreme cases, such as a request to immediately redeem all or substantially all of a particular stablecoin in circulation, even stablecoins backed by reserves comprised primarily of cash and cash equivalents may be subject to instability or an inability of the stablecoin issuer to meet all redemption requests, as the market for short-dated U.S. government obligations might not be sufficiently price stable. Market participants have increasingly shown concern about the actual underlying liquidity and reserves for dollar stablecoins such as USDC. For example, according to reports, Circle had more than $3 billion of its USDC reserve funds on deposit at SVB which became temporarily inaccessible when SVB was placed into FDIC receivership in March 2023. Although these funds were ultimately made available, concerns related to Circle’s access to these funds caused USDC to temporarily fall below its $1.00 peg, and the total market capitalization of USDC decreased following this temporary depegging. If a stablecoin issuer were to fail to honor its redemption obligations, this could undermine public confidence in stablecoins and in digital assets more broadly, which could have a widespread impact on the crypto economy, causing the prices …
Excerpt shortened here; the source contains the full paragraph.
Previous wording
We may incur extraordinary expenses to meet these requirements or, alternatively, may determine that continued operations are not viable. Further, we may not be capable of complying with certain federal or state regulatory obligations applicable to “money services businesses” and “money transmitters,” such as monitoring transactions and blocking transactions, because of the nature of the Ethereum blockchain. If we are deemed to be subject to and determine not to comply with such additional regulatory and registration requirements, we may act to dissolve and liquidate. If we decide to cease certain operations in response to new regulatory obligations, such actions could occur at a time that is unfavorable to investors. Note – pretty small risk here. If this is a normal CYA then fine but if this causes any concern we should discuss.
Current wording
We may incur extraordinary expenses to meet these requirements or, alternatively, may determine that continued operations are not viable. Further, we may not be capable of complying with certain federal or state regulatory obligations applicable to “money services businesses” and “money transmitters,” such as monitoring transactions and blocking transactions, because of the nature of the Ethereum blockchain. If we are deemed to be subject to and determine not to comply with such additional regulatory and registration requirements, we may act to dissolve and liquidate. If we decide to cease certain operations in response to new regulatory obligations, such actions could occur at a time that is unfavorable to investors.
Previous wording
We may engage in decentralized finance transactions and deploy ETH using liquid staking protocols, which present additional risk as opposed to simply holding our digital assets.
Current wording
We may engage in decentralized finance transactions and deploy ETH using liquid staking and liquid restaking protocols, which present additional risk as opposed to simply holding our digital assets.
Previous wording
We have also deployed ETH using liquid staking protocols. Liquid staking protocols are even newer than many decentralized finance protocols and are a novel and evolving technology. Although the staff of the SEC’s Division of Corporation Finance has provided a statement that the staff does not generally believe liquid staking services are securities offerings, and that it does not believe receipt tokens obtained through such liquid staking services are generally securities, there is no guarantee that courts agree. It is also possible that the liquid staking protocols we use do not fit the specific scope of the staff statement. If it is determined that the liquid staking protocols we use, or the receipt tokens we receive, are securities offerings, the providers of liquid staking protocols may be required to pay fines or be subject to other third-party claims, and the ETH we have deposited with them may be available to their creditors to fulfill those claims. See “Our shift towards an ETH-focused treasury strategy requires substantial changes in our day-to-day operations and exposes us to significant operational risks”and“We face risks relating to the custody of our digital assets, including the loss or destruction of private keys required to access our digital assets and cyberattacks or other data loss relating to our digital assets and insolvency of our custodians.” There is also ongoing uncertainty as to the regulatory treatment of liquid staking services from other regulators and agencies.
Current wording
We have also deployed ETH using liquid staking and liquid restaking protocols, including by staking ETH through Liquid Collective in exchange for LsETH and through ether.fi in exchange for weETH, the wrapped, non-rebasing form of eETH. Liquid staking protocols are even newer than many decentralized finance protocols and are a novel and evolving technology, and liquid restaking protocols — which layer additional restaking and validation arrangements on top of liquid staking and use the underlying ETH (or its receipt tokens) to provide cryptoeconomic security to other protocols and services — are even more novel and have an even more limited operating history. Although the staff of the SEC’s Division of Corporation Finance has provided a statement that the staff does not generally believe liquid staking services are securities offerings, and that it does not believe receipt tokens obtained through such liquid staking services are generally securities, there is no guarantee that courts agree. That staff statement is, by its terms, addressed to liquid staking and does not directly address liquid restaking arrangements or the receipt tokens obtained from liquid restaking protocols, such as weETH; the regulatory treatment of liquid restaking arrangements under the federal securities laws therefore remains uncertain. It is also possible that the liquid staking or liquid restaking protocols we use, or specific features of those protocols, do not fit within the scope of the staff statement. If it is determined that the liquid staking or liquid restaking protocols we use, or the receipt tokens we receive (including LsETH and weETH), are securities offerings, the providers of those protocols may be required to pay fines or be subject to other third-party claims, and the ETH we have deposited with them may be available to their creditors to fulfill those claims. See “Our shift towards an ETH-focused treasury strategy requires substantial changes in our day-to-day operations and exposes us to significant operational risks” and “We face risks relating to the custody of our digital assets, including the loss or destruction of private keys required to access our digital assets and cyberattacks or other data loss relating to our digital assets and insolvency of our custodians.” There is also ongoing uncertainty as to the regulatory treatment of liquid staking and liquid restaking services from other regulators and agencies.
Previous wording
Both decentralized finance protocols and liquid staking protocols typically rely on the use of smart contracts. Smart contracts are computer programs that run on a digital asset network or related protocol that execute automatically when certain conditions are met. Because smart contract functions typically cannot be stopped or reversed, vulnerabilities in or unforeseen consequences of their programming can have damaging effects for the underlying digital asset network or protocol and the value of digital assets that use or interact with such smart contracts. For example, in June 2016, a vulnerability in the smart contracts underlying a protocol that was deployed on the Ethereum network, The DAO, a distributed autonomous organization for venture capital funding, allowed an attack by a hacker to syphon approximately $60 million worth of ETH from The DAO into a separate account. In the aftermath of the theft, certain developers of and core contributors to the Ethereum network pursued a “hard fork” of the Ethereum network in order to erase any record of the theft. Despite these efforts, the price of ETH dropped approximately 35% in the aftermath of the attack and subsequent hard fork. In addition, in July 2017, a vulnerability in a smart contract for a multi-signature wallet software developed by Parity led to a $30 million theft of ETH, and in November 2017, a new vulnerability in Parity’s wallet software led to roughly $160 million worth of ETH being indefinitely frozen in an account.
Current wording
Both decentralized finance protocols and liquid staking and liquid restaking protocols typically rely on the use of smart contracts. Smart contracts are computer programs that run on a digital asset network or related protocol that execute automatically when certain conditions are met. Because smart contract functions typically cannot be stopped or reversed, vulnerabilities in or unforeseen consequences of their programming can have damaging effects for the underlying digital asset network or protocol and the value of digital assets that use or interact with such smart contracts. For example, in June 2016, a vulnerability in the smart contracts underlying a protocol that was deployed on the Ethereum network, The DAO, a distributed autonomous organization for venture capital funding, allowed an attack by a hacker to syphon approximately $60 million worth of ETH from The DAO into a separate account. In the aftermath of the theft, certain developers of and core contributors to the Ethereum network pursued a “hard fork” of the Ethereum network in order to erase any record of the theft. Despite these efforts, the price of ETH dropped approximately 35% in the aftermath of the attack and subsequent hard fork. In addition, in July 2017, a vulnerability in a smart contract for a multi-signature wallet software developed by Parity led to a $30 million theft of ETH, and in November 2017, a new vulnerability in Parity’s wallet software led to roughly $160 million worth of ETH being indefinitely frozen in an account.
Previous wording
Other smart contracts, such as bridges between separate digital asset networks have also been manipulated, exploited or used in ways that were not intended or envisioned by their creators. Initial problems and continued problems with the development, design and deployment of smart contracts may have an adverse effect on the value of protocols, including liquid staking and decentralized finance protocols, built on smart contract platforms or other digital assets that rely on smart contract technology, including any liquid staking tokens such as LsETH. If any of the smart contracts with which we interact, whether decentralized finance, liquid staking, or otherwise, suffer from such manipulation or exploit, or otherwise do not function as intended or as we anticipate, our ETH and any LsETH or similar tokens we hold may be exposed.
Current wording
Other smart contracts, such as bridges between separate digital asset networks, have also been manipulated, exploited or used in ways that were not intended or envisioned by their creators. Initial and continued problems with the development, design and deployment of smart contracts may have an adverse effect on the value of protocols, including liquid staking, liquid restaking and decentralized finance protocols, built on smart contract platforms or other digital assets that rely on smart contract technology, including any liquid staking or liquid restaking tokens such as LsETH and weETH. Liquid restaking tokens such as weETH are exposed not only to risks at the liquid staking protocol layer but also to risks at the additional restaking and AVS layers and, where bridged to other networks, to risks of the cross-chain bridge and the destination network. If any of the smart contracts with which we interact — whether decentralized finance, liquid staking, liquid restaking, cross-chain bridging or otherwise — suffer from such manipulation or exploit, or otherwise do not function as intended or as we anticipate, our ETH and any LsETH, weETH or similar tokens we hold may be exposed.
Previous wording
Our Custodians’digital asset insurance may not be sufficient to make us whole in the event of any loss of ETH.
Current wording
Our Custodians’ digital asset insurance may not be sufficient to make us whole in the event of any loss of ETH.
Previous wording
As corresponding increases in throughput lag behind growth in the use of digital asset networks, average transaction fees and settlement times may increase considerably. For example, the Ethereum Network has been, at times, at capacity, which has led to transaction fees as high as $200.27 per transaction, on May 1, 2022. Transaction fees in 2025 have ranged from a high of $12.11 on January 19 to below $1.00 throughout much of September 2025. Increased transaction fees and decreased settlement speeds could preclude certain uses for Ether (e.g., micropayments), and could reduce demand for, and the price of, ETH, which could adversely impact the value of our Common Stock. However, reduced gas fees could signal lower demand for ETH.
Current wording
As corresponding increases in throughput lag behind growth in the use of digital asset networks, average transaction fees and settlement times may increase considerably. For example, the Ethereum Network has been, at times, at capacity, which has led to transaction fees as high as $200.27 per transaction, on May 1, 2022. Transaction fees in 2024 have ranged from a high of $12.11 on January 19 to below $1.00 throughout much of the year. Increased transaction fees and decreased settlement speeds could preclude certain uses for Ether (e.g., micropayments), and could reduce demand for, and the price of, ETH, which could adversely impact the value of our Common Stock. However, reduced gas fees could signal lower demand for ETH.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
The CFTC has stated it believes, and judicial decisions involving CFTC enforcement actions have confirmed, that at least some digital assets fall within the definition of a “commodity” under the U.S. Commodities Exchange Act of 1936 (the “CEA”) and the rules promulgated by the CFTC thereunder (“CFTC Rules”). On March 17, 2026, the U.S. Securities and Exchange Commission (“SEC”), joined by the CFTC, issued a joint interpretation (the “Joint Interpretation”) clarifying the application of the federal securities laws to crypto assets and establishing a token taxonomy distinguishing “digital commodities,” “digital collectibles,” “digital tools,” “stablecoins,” and “digital securities.” The Joint Interpretation expressly identifies ETH as an example of a digital commodity, and the CFTC has stated that it will administer the CEA consistent with the Joint Interpretation.