Invesco Galaxy Solana ETF S-1/A, filed Oct 31, 2025
Invesco Galaxy Solana ETF (QSOL)
S-1/A
2025-10-31
View Original
Added on
October 22, 2026
As filed with the Securities and Exchange Commission on October 31, 2025
Registration No. 333-288318
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
PRE-EFFECTIVE AMENDMENT NO. 2
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Invesco Galaxy Solana ETF
(Exact name of registrant as specified in its charter)
(Exact name of registrant as specified in its charter)
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Delaware
(State or other jurisdiction of incorporation or organization) |
6221
(Primary Standard Industrial Classification Code Number)
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39-7104353
(I.R.S. Employer Identification No.) |
c/o Adam Henkel, Esq.
Invesco Capital Management LLC
3500 Lacey Road, Suite 700
Downers Grove, IL 60515
800-983-0903
(Address, including zip code, and telephone number,
including area code, of registrant’s principal executive offices)
(Address, including zip code, and telephone number,
including area code, of registrant’s principal executive offices)
Copy to:
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J. Stephen Feinour, Jr., Esq.
Stradley Ronon Stevens & Young, LLP
2600 One Commerce Square
Philadelphia, PA 19103-7098
(215) 564-8521
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Miranda Sturgis, Esq.
Stradley Ronon Stevens & Young, LLP
2600 One Commerce Square
Philadelphia, PA 19103-7098
(215) 564-8131
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Mark R. Greer, Esq.
Stradley Ronon Stevens & Young, LLP
191 North Wacker Drive, Suite 1601
Chicago, IL 60606
(312) 964-3505
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Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of
this Registration Statement.
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the
following box: ☒
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities
Act registration statement number of the earlier effective registration statement for the same offering: ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same offering. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth
company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Securities Exchange Act of 1934.
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Large accelerated filer ☐
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Accelerated filer ☐
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Non-accelerated filer ☒
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Smaller reporting company ☒
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Emerging growth company ☒
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☒
The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such
date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
The information in this Preliminary Prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with
the Securities and Exchange Commission is effective. This Preliminary Prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
Subject to Completion
Preliminary Prospectus dated October 31, 2025
Preliminary Prospectus dated October 31, 2025
PRELIMINARY PROSPECTUS
INVESCO GALAXY SOLANA ETF
COMMON SHARES
Invesco Galaxy Solana ETF (the “Trust”) is an exchange-traded fund that issues common shares of beneficial interest (the “Shares”) that trade on Cboe BZX (“Cboe” or the “Exchange”) under the ticker
symbol “QSOL”. The Trust’s investment objective is to reflect the performance of the spot price of Solana (“SOL”) as measured using Lukka Prime Solana Reference Rate (the “Benchmark”), as adjusted to reflect the SOL staking rewards earned by the
Trust and the Trust’s expenses and other liabilities. The Trust expects to outperform the Benchmark before taking its expenses and liabilities into account due to its plans to receive SOL staking rewards.
In seeking to achieve its investment objective, the Trust will hold SOL and will seek to stake substantially all of its SOL to earn staking rewards to the extent the Trust, in the Sponsor’s sole
discretion, can engage in staking without undue legal or regulatory risk, including jeopardizing its status as a grantor trust for U.S. federal income tax purposes (the “Staking Condition”). The Trust will value its Shares each day when the
Exchange is open for regular trading (a “Business Day”) as of 4:00 p.m. ET. The value of SOL held by the Trust is determined based on the fair market value (“FMV”) price for SOL, reflecting the execution price of SOL on its principal market as
determined each day by Lukka Inc., an independent third-party digital asset data company (the “Benchmark Provider”). The Benchmark is designed to provide an estimated fair market value price for SOL, based on the execution price of SOL on its
principal market. In this regard, the Benchmark Provider seeks to identify a “principal market” for SOL each day by evaluating eligible SOL trading platforms across a variety of different criteria, including the trading platforms’ oversight and
governance frameworks, microstructure efficiency, trading volume, data transparency and data integrity. Invesco Capital Management LLC (the “Sponsor” or “Invesco”) is the sponsor of the Trust, CSC Delaware Trust Company (the “Trustee”) is the
trustee of the Trust, The Bank of New York Mellon is the Trust’s transfer agent (“Transfer Agent”) and will hold all of the Trust’s cash on the Trust’s behalf as cash custodian (“Cash Custodian”), and Coinbase Custody Trust Company, LLC (the
“Solana Custodian”) will hold all of the Trust’s SOL on the Trust’s behalf as custodian.
The Trust intends to issue Shares on a continuous basis and is registering an indeterminate number of Shares with the SEC in accordance with Rule 456(d) and 457(u) under the Securities Act of
1933, as amended (the “Securities Act”). The Trust will process all creations and redemptions of Shares in transactions with financial firms that are authorized to do so (known as “Authorized Participants”). When the Trust creates or redeems its
Shares, it will do so in cash or in-kind. When the Trust issues or redeems its Shares, it does so only in blocks of 5,000 Shares (a “Creation Basket”) based on the quantity of SOL attributable to each Share of the Trust (net of accrued but unpaid
Sponsor fees and any accrued but unpaid expenses or liabilities).
Creations and redemption transactions will be conducted in exchange for SOL in-kind or cash.
When purchasing Creation Baskets in-kind with SOL, Authorized Participants will deliver SOL to the Solana Custodian. After confirming receipt of the SOL by the Solana Custodian, the Transfer
Agent is authorized by the Sponsor to issue Creation Baskets of Shares to the creating Authorized Participant in satisfaction of the creation order.
When purchasing Creation Baskets for cash, Authorized Participants will deliver cash to the Cash Custodian. Galaxy Digital Funds LLC (the “Execution Agent”) will be responsible for acquiring the
requisite amount of SOL on behalf of the Trust on an agency basis. Once the Execution Agent selects a counterparty or digital asset trading platform (“Solana Counterparty”), the Cash Custodian will transfer cash to the Solana Counterparty in
payment for the requisite amount of SOL on behalf of the Trust on an agency basis on the value date of the order. The SOL acquired from the Solana Counterparty will be transferred to the Solana Custodian. After receipt of the SOL by the Solana
Custodian, the Transfer Agent will issue Creation Baskets of Shares to the creating Authorized Participant in satisfaction of the creation order.
When redeeming Creation Baskets in-kind for SOL, the Transfer Agent will redeem the Shares and the Solana Custodian will distribute the resulting SOL to the redeeming Authorized Participant in
satisfaction of the redemption order.
When redeeming Creation Baskets for cash, the Execution Agent will be responsible for selling the requisite amount of SOL on behalf of the Trust on an agency basis. Once the Execution Agent
selects a Solana Counterparty, the Solana Custodian will transfer SOL to the Solana Counterparty in return for the requisite cash payment. The cash received from the Solana Counterparty will be delivered to the Cash Custodian. After receipt of the
cash payment, the Transfer Agent will redeem the Shares and the Cash Custodian will distribute the resulting cash to the redeeming Authorized Participant in satisfaction of the redemption order.
In connection with both cash creation and cash redemption transactions, the Execution Agent, pursuant to the oversight of the Sponsor, will decide how and with which Solana Counterparty to
transact on the Trust’s behalf. The Trust will create Shares by receiving SOL from a third-party that is not the Authorized Participant and the Trust (through the Execution Agent, on an agency basis)—not the Authorized Participant—is responsible
for selecting the third-party to deliver the SOL. Further, the third-party will not be acting as an agent of the Authorized Participant with respect to the delivery of the SOL to the Trust or acting at the direction of the Authorized Participant
with respect to the delivery of the SOL to the Trust. The Trust will redeem shares by delivering SOL to a third-party that is not the Authorized Participant and the Trust (through the Execution Agent, on an agency basis)—not the Authorized
Participant—is responsible for selecting the third-party to receive the SOL. Further, the third-party will not be acting as an agent of the Authorized Participant with respect to the receipt of the SOL from the Trust or acting at the direction of
the Authorized Participant with respect to the receipt of the SOL from the Trust.
The Trust expects to purchase or sell SOL in connection with cash creation and redemption transactions, and to sell SOL to pay certain expenses, including the Sponsor Fee. Each creating or
redeeming Authorized Participant will be charged (i) a transaction fee and (ii) transfer, processing and other transaction costs charged by the Solana Custodian (the “Custody Transaction Fee”) in connection with each creation or redemption
transaction. Authorized Participants are expected to sell Shares to the public at prices that reflect, among other factors, the value of the Trust’s assets, supply and demand for the Shares and market conditions at the time of a transaction.
Subject to the Staking Condition being met, the Sponsor seeks to stake substantially all of the Trust’s assets through one or more trusted staking providers (“Staking Provider”), except as
necessary to (i) pay the Sponsor Fee or other Trust expenses, (ii) satisfy existing and reasonably foreseen potential redemption
requests or (iii) address regulatory or tax concerns raised by staking activities. Subject to the Staking Condition being met, [___] is expected to serve as a Staking Provider with respect to
the Trust’s SOL, though the Sponsor may choose to engage additional staking providers in its sole discretion. In consideration for any staking activity in which the Trust may engage, the Trust would receive certain staking rewards of SOL tokens,
which may be treated as income to the Trust. The Trust will not acquire and will disclaim any Incidental Right (as defined below) or Incidental Right asset received, for example as a result of forks or airdrops, and such assets will not be taken
into account for purposes of determining the net asset value per share (“NAV”). Holders of the Shares (“Shareholders”) who decide to buy or sell Shares of the Trust will place their trade orders through their brokers and may incur customary
brokerage commissions and charges. Such trades may occur at a premium or discount relative to the NAV of the Shares of the Trust. The treatment of staking in a grantor trust for U.S. federal income tax purposes is still developing. As a grantor
trust, the Trust can undertake only certain types of activities. Please see “Taxation of the Trust” below for more details.
The Trust was seeded with $100,000 on October 16, 2025, through the sale of 4,000 Shares at a per-Share price of $25.00 by the Trust to Invesco Ltd. On [ ], Invesco Ltd. redeemed all of its
Shares for cash at a per-Share price of $[__] for a total redemption value of $[_]. At the same time on [__], Invesco Ltd. created [__] shares at a price of $[__] per Share based on the Benchmark price as of 4:00 pm. Eastern Time on [__], 2025.
Accordingly, as of the market close on [__], the Trust had total assets of $[__], solely represented by SOL held in custody by the Solana Custodian, and had [__] Shares outstanding, entirely held by Invesco Ltd.
Invesco Ltd. and [___] (in such role, the “Seed Capital Investor”) each have acted as a statutory underwriter in connection with their purchase of the applicable shares. Invesco and the Seed
Capital Investor may sell some or all of the shares underlying their purchases held by them pursuant to the registration statement for the Trust (Invesco Ltd. and the Seed Capital Investor, in such roles, the “Selling Shareholders”), which shares
have been registered to permit the resale from time to time after purchase. The Selling Shareholders may make a public offering of the Shares held by them at a price per Share that will depend, among other factors, on the net asset value per Share
and the trading price of Shares on the Exchange at the time of the offer. The price of Shares offered by the Selling Shareholders were acquired by the Selling Shareholders as described in the registration statement, and could be sold at different
times and at different offering prices. The Trust will not receive any of the proceeds from the resale by the Selling Shareholders of these shares. The Selling Shareholders will not receive any fee or other compensation from the Sponsor in
connection with the sale of the Shares. Prior to this offering, pursuant to this Prospectus, there has been no public market for the Shares. The Shares are expected to be listed for trading, subject to notice of issuance, on the Exchange under the
ticker symbol QSOL. Investing in the Trust involves risks similar to those involved with an investment directly in SOL, as well as other significant risks. See “Risk Factors” beginning on page [__].
The offering of the Trust’s Shares is registered with the Securities and Exchange Commission (the “SEC”) in accordance with the Securities Act. The offering is intended to be a continuous offering
and is not expected to terminate until either all of the registered Shares have been sold or three years from the date of the original offering, whichever is earlier, unless extended as permitted by applicable rules under the Securities Act. The
Trust is not a mutual fund, is not registered under the Investment Company Act of 1940, as amended (the “1940 Act”) and is not subject to regulation under the 1940 Act. The Trust is not a commodity pool for purposes of the Commodity Exchange Act of
1936, as amended (the “CEA”), and the Sponsor is not subject to regulation by the Commodity Futures Trading Commission (the “CFTC”) as a commodity pool operator or a commodity trading advisor. The Trust’s Shares are neither interests in, nor
obligations of, the Sponsor or the Trustee.
AN INVESTMENT IN THE TRUST INVOLVES SIGNIFICANT RISKS AND MAY NOT BE SUITABLE FOR SHAREHOLDERS THAT ARE NOT IN A POSITION TO ACCEPT RISKS RELATED TO SOLANA. THE SHARES ARE
SPECULATIVE SECURITIES. THEIR PURCHASE INVOLVES A HIGH DEGREE OF RISK, AND YOU COULD LOSE YOUR ENTIRE INVESTMENT. YOU SHOULD CONSIDER ALL RISK FACTORS BEFORE INVESTING IN THE TRUST. PLEASE REFER TO “RISK FACTORS” BEGINNING ON PAGE [__].
THE SHARES OF THE TRUST ARE NEITHER INTERESTS IN NOR OBLIGATIONS OF THE SPONSOR, THE TRUSTEE, THE BENCHMARK PROVIDER, THE ADMINISTRATOR, THE TRANSFER AGENT, THE EXECUTION AGENT,
THE CASH CUSTODIAN, THE SOLANA CUSTODIAN, THE MARKETING AGENT OR ANY OF THEIR RESPECTIVE AFFILIATES. THE SHARES ARE NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.
NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THE SECURITIES OFFERED IN THIS PROSPECTUS, OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR
COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE TRUST IS AN “EMERGING GROWTH COMPANY” AS THAT TERM IS USED IN THE JUMPSTART OUR BUSINESS STARTUPS ACT AND, AS SUCH, MAY ELECT TO COMPLY WITH CERTAIN REDUCED REPORTING
REQUIREMENTS.
The date of this Prospectus is October [__], 2025
TABLE OF CONTENTS
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Page
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STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
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iii
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EMERGING GROWTH COMPANY STATUS
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iii
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PROSPECTUS SUMMARY
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1
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RISK FACTORS
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18
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SOLANA AND THE SOLANA MARKET
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66
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CALCULATION OF NAV
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85
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ADDITIONAL INFORMATION ABOUT THE TRUST
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89
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THE TRUST’S SERVICE PROVIDERS
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92
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CUSTODY OF THE TRUST’S ASSETS
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96
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THE PRIME BROKER
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101
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FORM OF SHARES
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104
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TRANSFER OF SHARES
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104
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PLAN OF DISTRIBUTION
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105
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CREATION AND REDEMPTION OF SHARES
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107
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USE OF PROCEEDS
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116
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OWNERSHIP OR BENEFICIAL INTEREST IN THE TRUST
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117
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CONFLICTS OF INTEREST
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117
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DUTIES OF THE SPONSOR
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119
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LIABILITY AND INDEMNIFICATION
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120
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VOTING BY SHAREHOLDERS; MANAGEMENT
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123
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BOOKS AND RECORDS
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126
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STATEMENTS, FILINGS, AND REPORTS TO SHAREHOLDERS
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126
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FISCAL YEAR
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126
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GOVERNING LAW; CONSENT TO DELAWARE JURISDICTION
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126
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LEGAL MATTERS
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127
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EXPERTS
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127
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MATERIAL CONTRACTS
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127
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U.S. FEDERAL INCOME TAX CONSEQUENCES
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134
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PURCHASES BY EMPLOYEE BENEFIT PLANS
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140
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INFORMATION YOU SHOULD KNOW
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141
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WHERE YOU CAN FIND MORE INFORMATION
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141
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INVESCO CAPITAL MANAGEMENT LLC PRIVACY NOTICE
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142
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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142
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APPENDIX A GLOSSARY OF DEFINED TERMS
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A-1
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This Prospectus contains information you should consider when making an investment decision about the Shares of the Trust. You may rely on the information contained in this Prospectus. The Trust
and the Sponsor have not authorized any person to provide you with different information and, if anyone provides you with different or inconsistent information, you should not rely on it. This Prospectus is not an offer to sell the Shares in any
jurisdiction where the offer or sale of the Shares is not permitted.
The Shares of the Trust are not registered for public sale in any jurisdiction other than the United States (the “U.S.”).
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STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This Prospectus includes “forward-looking statements” that generally relate to future events or future performance. In some cases, you can identify forward-looking statements by terminology such as
“may,” “will,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential” or the negative of these terms or other comparable terminology. All statements (other than statements of historical fact) included in this
Prospectus that address activities, events or developments that will or may occur in the future, including such matters as movements in the digital asset markets, the Trust’s operations, the Sponsor’s plans and references to the Trust’s future
success and other similar matters, are forward-looking statements. These statements are only predictions. Actual events or results may differ materially. These statements are based upon certain assumptions and analyses the Sponsor has made based on
its perception of historical trends, technology developments regarding the use of SOL and other digital assets, including the systems used by the Sponsor and the Trust’s Solana Custodian in their provision of services to the Trust, current conditions
and expected future developments, as well as other factors appropriate in the circumstances. Whether or not actual results and developments will conform to the Sponsor’s expectations and predictions, however, is subject to a number of risks and
uncertainties, including the special considerations discussed in this Prospectus, general economic, market and business conditions, changes in laws or regulations, including those concerning taxes, made by governmental authorities or regulatory
bodies, and other economic and political developments. Consequently, all the forward-looking statements made in this Prospectus are qualified by these cautionary statements, and there can be no assurance that actual results or developments the
Sponsor anticipates will be realized or, even if substantially realized, that they will result in the expected consequences to, or have the expected effects on, the Trust’s operations or the value of its Shares. None of the Trust, the Sponsor, or the
Trustee or their respective affiliates is under a duty to update any of the forward-looking statements to conform such statements to actual results or to a change in the Sponsor’s expectations or predictions, other than as required by applicable
laws.
EMERGING GROWTH COMPANY STATUS
The Trust is an “emerging growth company” as that term is used in the Jumpstart Our Business Startups Act (the “JOBS Act”) and, as such, may elect to comply with certain reduced reporting
requirements. For as long as the Trust is an emerging growth company, unlike other public companies, it will not be required to:
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provide an auditor’s attestation report on management’s assessment of the effectiveness of its system of internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002;
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comply with any new requirements adopted by the Public Company Accounting Oversight Board (“PCAOB”) requiring mandatory auditor rotation or a supplement to the auditor’s report in which the auditor would be required to provide additional
information about the audit and the financial statements of the issuer;
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comply with any new audit rules adopted by the PCAOB after April 5, 2012, unless the Securities and Exchange Commission determines otherwise;
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provide certain disclosure regarding executive compensation required of larger public companies; or
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obtain shareholder approval of any golden parachute payments not previously approved.
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The Trust will cease to be an “emerging growth company” upon the earliest of (i) when it has $1.235 billion or more in annual revenues; (ii) when it is deemed to be a large accelerated filer under
Rule 12b-2 promulgated pursuant to the Securities Exchange Act of 1934; (iii) when it issues more than $1.0 billion of
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non-convertible debt over a three-year period; or (iv) the last day of the fiscal year following the fifth anniversary of its initial public offering. In addition, Section 107 of the JOBS Act also
provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can
delay the adoption of certain accounting standards until those standards would otherwise apply to private companies however, the Trust is choosing to “opt out” of such extended transition period, and as a result, the Trust will comply with new or
revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. Section 107 of the JOBS Act provides that the Trust’s decision to opt out of the extended transition period for
complying with new or revised accounting standards is irrevocable.
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INVESCO GALAXY SOLANA ETF
TICKER: QSOL
CUSIP: 67122G106
TICKER: QSOL
CUSIP: 67122G106
PROSPECTUS SUMMARY
This is only a summary of the Prospectus and, while it contains material information about the Trust and its Shares, it does not contain or summarize all of the information about the Trust and the
Shares contained in the Prospectus that is material and/or that may be important to you. You should read this entire Prospectus before making an investment decision about the Shares. For a glossary of defined terms, see Appendix A.
As used below, “Solana” is used to describe the system as a whole that is involved in maintaining the ledger of Solana ownership and facilitating the transfer of SOL among parties. “SOL” is used to
refer to the digital asset within the Solana network.
Overview of the Trust
Invesco Galaxy Solana ETF (the “Trust”) is an exchange-traded fund that issues common shares of beneficial interest (the “Shares”) that trade on Cboe BZX (“Cboe” or the “Exchange”) under the
ticker symbol QSOL.
Invesco Capital Management LLC (the “Sponsor”) is the sponsor of the Trust.
The Trust’s investment objective is to reflect the performance of the spot price of SOL as measured using the Lukka Prime Solana Reference Rate (the “Benchmark”), as adjusted to reflect the SOL
staking rewards earned by the Trust and the Trust’s expenses and other liabilities. The Trust expects to outperform the Benchmark before taking its expenses and liabilities into account due to its plans to receive SOL staking rewards. The Trust is
passively-managed and the Sponsor does not actively manage the SOL held by the Trust. This means that the Sponsor does not sell SOL at times when its price is high or acquire SOL at low prices in the expectation of future price increases. It also
means that the Sponsor does not make use of any of the hedging techniques available to professional SOL investors to attempt to reduce the risks of losses resulting from price changes. The Trust will not utilize leverage, derivatives or any similar
arrangements in seeking to meet its investment objective; however, the Trust may utilize a short term credit facility or an alternative liquidity arrangement solely for the purposes of obtaining funds necessary to meet requested redemptions from
the Trust. The Trust is not a registered investment company under the Investment Company Act of 1940 (the “1940 Act”) and is not required to register under the 1940 Act. The Sponsor is not registered with the SEC as an investment adviser and is not
subject to regulation by the SEC as such in connection with its activities with respect to the Trust. The Trust is not a commodity pool for purposes of the Commodity Exchange Act (the “CEA”), and the Sponsor is not subject to regulation by the CFTC
as a commodity pool operator or a commodity trading advisor in connection with its activities with respect to the Trust.
The Trust intends to continuously offer Shares but may suspend the issuance of Shares at any time.
In seeking to achieve its investment objective, the Trust will hold SOL and will seek to stake substantially all of its SOL to earn staking rewards to the extent the Trust, in the Sponsor’s sole
discretion, can engage in staking without undue legal or regulatory risk, including jeopardizing its status as a grantor trust for U.S. federal income tax purposes (the “Staking Condition”). The Trust will value its Shares each day when the
Exchange is open for regular trading (a “Business Day”) as of 4:00 p.m. ET. The value of SOL held by the Trust is determined based on the estimated fair market value (“FMV”) price for SOL, reflecting the execution price of SOL on its principal
market as determined each day by Lukka Inc., an independent third-
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party digital asset data company (the “Benchmark Provider”). In this regard, the Benchmark Provider seeks to identify a “principal market” for SOL each day, by evaluating eligible SOL trading
platform across a variety of different criteria, including the trading platforms’ oversight and governance frameworks, microstructure efficiency, trading volume, data transparency and data integrity. CSC Delaware Trust Company (the “Trustee”) is
the trustee of the Trust, The Bank of New York Mellon is the Trust’s transfer agent (“Transfer Agent”) and will hold all of the Trust’s cash on the Trust’s behalf as cash custodian (“Cash Custodian”), and Coinbase Custody Trust Company, LLC (the
“Solana Custodian”) will hold all of the Trust’s SOL on the Trust’s behalf as custodian.
The Trust will process all creations and redemptions of Shares in transactions with financial firms that are authorized to do so (known as “Authorized Participants”). When the Trust creates or
redeems its Shares, it will do so in cash or in-kind. When the Trust issues or redeems its Shares, it will do so only in blocks of 5,000 Shares (a “Creation Basket”) based on the quantity of SOL attributable to each Share of the Trust (net of
accrued but unpaid Sponsor fees and any accrued but unpaid expenses or liabilities). Creation and redemption transactions will be conducted in exchange for SOL in-kind or cash. See “Creation and Redemption of Shares.”
The Trust expects to purchase and sell SOL in connection with cash creation or redemption transactions, and may sell SOL to pay certain expenses, including the Sponsor Fee. In this capacity, the
Sponsor has entered into an agreement with Execution Agent to facilitate the purchase or sale of SOL by the Trust.
The quantity of SOL required to create each Creation Basket (“Creation Basket Deposit”) changes from day to day. On each day that the Exchange is open for regular trading, the Sponsor will
publish the Creation Basket after market close, which is composed of an amount of SOL or an amount of cash and/or SOL required to purchase a Creation Basket the following day. After the Trust’s NAV is struck on a Business Day, The Bank of New York
Mellon (the “Administrator”) adjusts the quantity of SOL constituting the Creation Basket Deposit for the next Business Day as appropriate to reflect accrued expenses. The computation is made by the Administrator as promptly as practicable after
4:00 p.m. ET. The Administrator calculates the Creation Basket Deposit for a given day by multiplying the NAV by the number of Shares in a Creation Basket (5,000) divided by the price of SOL at 4:00 p.m. ET as determined consistent with the
Benchmark to determine the cash amount required for a Creation Basket. Fractions of a SOL smaller than 0.00000001 are disregarded for purposes of the computation of the Creation Basket Deposit. Although the Administrator applies the SOL price to
the calculation of the Creation Basket value, the Administrator plays no role in the determination of the SOL price used by the Trust; rather the SOL price used in calculating the cash value of a Creation Basket is identical to the SOL price used
in determining the Trust’s NAV.
For cash creation transactions, to the extent there is a difference between the price actually paid by the Trust to acquire a Creation Basket worth of SOL in the cash creation process compared
to the cash value of the Creation Basket (i.e., if there is a difference between the amount paid by the Execution Agent on behalf of the Trust to purchase the requisite amount of SOL and the valuation of SOL as part of the Trust’s NAV calculation),
that difference will also be charged to the creating Authorized Participant in the form of a variable fee.
To support the ability of Authorized Participants to provide liquidity at prices that reflect the value of the Trust’s assets and to facilitate orderly transactions in the Shares, the Trust will
ordinarily process redemptions of Creation Baskets within two business days following receipt of a redemption request by an Authorized Participant.
Creation Baskets are expected to be created when there is sufficient demand for Shares, including when the market price per Share is at a premium to the net asset value per Share (“NAV”).
Authorized Participants are expected to sell such Shares to the public at prices that reflect, among other factors, the value of the
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Trust’s assets, supply of and demand for Shares and market conditions at the time of a transaction. Similarly, Creation Baskets are expected to be redeemed when the market price per Share is at a
discount to the NAV. Investors (other than Authorized Participants) seeking to purchase or sell Shares on any day are expected to transact in the secondary market, on the Exchange or other national securities exchanges, at the market price per Share,
rather than through the creation or redemption of Creation Baskets. Shares initially comprising the same Creation Basket but offered by the Authorized Participants to the public at different times may have different offering prices, which depend on
various factors, including the supply and demand for Shares, the value of the Trust’s assets, and market conditions at the time of a transaction.
The Sponsor believes that the design of the Trust will enable investors to effectively and efficiently implement strategic and tactical asset allocation strategies that use SOL by investing in the
Shares rather than directly in SOL.
The Trust’s Expenses
The Trust will pay the Sponsor a unified fee of 0.25% per annum (the “Sponsor Fee”) as compensation for services performed under the Trust Agreement (as defined herein). The Trust’s only
ordinary recurring expense is the Sponsor Fee.
The Sponsor Fee will be accrued daily and paid monthly in arrears in U.S. dollars, and will be calculated by the Administrator. The Sponsor may, at its sole discretion and from time to time,
waive all or a portion of the Sponsor’s Fee for stated periods of time. The Sponsor is under no obligation to waive any portion of its fees and any such waiver shall create no obligation to waive any such fees during any period not covered by the
waiver. The Administrator will calculate the Sponsor Fee on a daily basis by applying the 0.25% annualized rate to the Trust’s total net assets. To cover the Sponsor Fee, and extraordinary expenses not assumed by the Sponsor, the Sponsor or its
delegate will cause the Trust (or its delegate) to instruct the Execution Agent to convert SOL held by the Trust into U.S. dollars. At the direction of the Trust, the Execution Agent will seek to sell SOL at approximately the price at which it is
valued by the Trust and in the smallest amounts required to permit such payments as they become due, with the intention of minimizing the Trust’s holdings of assets other than SOL. Accordingly, the amount of
SOL to be sold may vary from time to time depending on the level of the Trust’s expenses and liabilities and the market price of SOL. The NAV of the Trust and the number of SOL represented by a Share will decline each time the Trust accrues the
Sponsor Fee or any Trust expenses not assumed by the Sponsor. The Trust is not responsible for paying any costs associated with the transfer of SOL to or from the Trust in connection with paying the Sponsor Fee or in connection with creation and
redemption transactions.
Except as noted below, the Sponsor has agreed to pay all of the Trust’s ordinary expenses out of the Sponsor’s unified fee, including, but not limited to, the Trustee’s fees, the fees of The Bank
of New York Mellon (for its services as the “Administrator,” “Transfer Agent,” and “Cash Custodian”), the fees of the Solana Custodian, the fees of the Execution Agent, Exchange listing fees, Securities and Exchange Commission (“SEC”) registration
fees, printing and mailing costs, legal costs and audit fees. The Sponsor’s payment of such Trust expenses is not subject to a cap. The Sponsor also paid the costs of the Trust’s organization.
Subject to the Staking Condition being met, the Trust will receive a portion of the Staking Rewards earned through its staking program in the form of SOL. The remaining portion of the Staking
Rewards will be retained by the Staking Provider facilitating the staking program. The expenses of staking the Trust’s SOL will be paid from the proceeds of the Trust's staking program.
The Trust may incur certain extraordinary expenses that are not assumed by the Sponsor. These include, but are not limited to, taxes and governmental charges, any applicable brokerage commissions,
financing
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fees, Solana network fees and similar transaction fees, expenses and costs of any extraordinary services performed by the Sponsor (or any other service provider) on behalf of the Trust to protect
the Trust or the interests of Shareholders (including, for example, in connection with any fork of the Solana blockchain), any indemnification of the Sponsor, Cash Custodian, Solana Custodian, Administrator or other agents, service providers or
counterparties of the Trust and extraordinary legal fees and expenses, including any legal fees and expenses incurred in connection with litigation, regulatory enforcement or investigation matters.
The Trust’s Legal Structure
The Trust is a Delaware statutory trust, formed on June 12, 2025, pursuant to the Delaware Statutory Trust Act (“DSTA”). The Trust continuously issues common shares representing fractional
undivided beneficial interest in and ownership of the Trust that may be purchased and sold on the Exchange. The Trust operates pursuant to its Amended and Restated Declaration of Trust and Trust Agreement, dated as of [__] 2025 (the “Trust
Agreement”). CSC Delaware Trust Company, a Delaware trust company, is the Delaware trustee of the Trust (the “Trustee”). The Trust is managed and controlled by the Sponsor. Shareholders will have very limited voting rights, which will limit their
ability to influence matters such as amendment of the Trust Agreement, change in the Trust’s basic investment policy, dissolution of the Trust, or the sale or distribution of the Trust’s assets.
The Lukka Prime Solana Reference Rate
The Benchmark is designed to provide an estimated fair market value (“FMV”) for SOL, in a manner that aligns with accounting principles generally accepted in the United States (“U.S. GAAP”) and
International Financial Reporting Standards Foundation (“IFRS”) accounting guidelines regarding fair market value measurements. In this regard, the Benchmark Provider seeks to identify a “principal market” for SOL each day, by evaluating eligible
SOL trading platforms across a variety of different criteria, including the trading platforms’ oversight and governance frameworks, microstructure efficiency, trading volume, data transparency and data integrity. As of September 30, 2025, the
following trading platforms are considered to be eligible trading platforms by the Benchmark Provider: Binance, Bitfinex, Bitflyer, Bitstamp, Bullish, Coinbase, Crypto.com, Gate.io, Gemini, HitBTC, Huobi, itBit, Kraken, KuCoin, LMAX, MEXC Global,
OKX and Poloniex (collectively, “Benchmark Pricing Sources”). The Benchmark Provider reviews trading platforms eligible for inclusion in the Benchmark quarterly. In determining which trading platforms to include as Benchmark Pricing Sources, the
Benchmark Provider evaluates each trading platform using proprietary ratings criteria. The Benchmark Provider periodically reassesses the trading platforms eligible to be considered Benchmark Pricing Sources, and makes adjustments as needed.
For purposes of financial reporting, the Trust will determine the principal market for SOL in accordance with ASC Topic 820-10, and such determination is considered from the Trust’s perspective.
Procedures will be implemented to review and confirm the prices utilized to value SOL reflect fair value in accordance with Accounting Standards Codification Topic 820, “Fair Value Measurements and Disclosures” (“ASC Topic 820”) and will be
reviewed by the Sponsor’s Valuation Committee on a periodic basis.
With respect to the Trust’s Authorized Participants, the Trust has no authority over which trading platforms the Authorized Participants or their affiliates might transact on, although the Trust
expects that most Authorized Participants or their affiliates may transact on several of the trading platforms used by the Benchmark Provider. The Trust notes that for transactions in which it is selling SOL, it may do so in principal-to-principal
transactions, although the Trust is eligible to execute trades on all of the trading platforms used by the Benchmark Provider. While the principal to principal market is the market in which the Execution Agent, on the Trust’s behalf, would normally
transact for sales of SOL, in considering all information reasonably available in accordance with the guidance in ASC 820-10-35-5A, the Trust notes
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that the identification of a principal market is completed by the Benchmark Provider based on a variety of different criteria including but not limited to trading platforms’ oversight and
governance frameworks, microstructure efficiency, trading volume, data transparency and data integrity. The Trust views this evidence to the contrary as an appropriate basis to determine a primary market that is not the principal-to-principal market,
in accordance with the guidance in ASC 820-10-35-5A.
The Trust’s Staking Program
In seeking to achieve its investment objective, the Trust will hold SOL and will seek to stake substantially all of its SOL to earn staking rewards, except as necessary to (i) pay the Sponsor
Fee or other Trust expenses, (ii) satisfy existing and reasonably foreseen potential redemption requests or (iii) address regulatory or tax concerns raised by staking activities. The Trust will only engage in staking to the extent the Trust, in
the Sponsor’s sole discretion, can engage in staking without undue legal or regulatory risk, including without jeopardizing its status as a grantor trust for U.S. federal income tax purposes (the “Staking Condition”). Subject to the Staking Condition being met, [__] is expected to serve as a Staking Provider with respect to the Trust’s SOL.
If the Trust engaging in staking activities were to jeopardize the Trust’s ongoing ability to satisfy the Staking Condition and related requirements or conditions in the discretion of the Sponsor, or if the Trust
engaging in staking activities raised concerns about the safety or liquidity of the Trust's SOL, the Trust may cease some or all of its staking activities. Staking on the Solana network involves delegating of SOL to validators and carries risks
discussed further below. Staked SOL may be subject to community-determined penalties for validator misbehavior, or slashing. If the Staking Provider causes the Trust’s staked SOL to be subject to such slashing losses, the Trust could suffer losses
of the staked SOL. Additionally, the staking process includes protocol-defined warm-up, activation and withdrawal periods, during which staked SOL is temporarily locked and inaccessible. These phases affect when SOL begins earning rewards,
participates in consensus and becomes available for transfer or redelegation.
The Staking Provider will stake the Trust’s SOL as the node operator and will operate a validator to stake the Trust’s SOL. The Staking Provider will perform its staking services in collaboration with the Solana
Custodian, as the SOL will be staked directly from the Trust’s SOL account with the Solana Custodian. The Trust will maintain control of the SOL while it is staked because it will remain in the Trust’s account with the Solana Custodian (i.e., it will be kept in a separate account for which the Trust is the beneficial and record owner and will not be commingled other parties' accounts with the Solana Custodian). The Trust will maintain the power
to unstake its SOL. The Staking Provider will not have this capability. Staking will be a passive activity for the Trust, as it will not operate its staking program. The Trust’s role will be limited to evaluating and contracting with one or more
Staking Providers and instructing the Staking Provider on when to stake and/or unstake the Trust’s SOL.
The Trust will receive a portion of the staking rewards earned through staking activities in the form of additional SOL tokens. The remaining portion of the staking rewards will be retained by the third party
Staking Provider for providing and facilitating the staking activities. The expenses of staking the Trust’s SOL will be paid from the staking rewards generated by the staking program. The staking rewards earned by the Trust will accrue to the
Trust’s account with the Solana Custodian and will generally be staked in the same way as the Trust’s already staked SOL.
The Trust may seek an opinion of a tax advisor or a private letter ruling from the Internal Revenue Service that would allow it to utilize a credit facility or an alternative means of satisfying redemption requests
without un-staking the Trust’s SOL, but it will not take such actions in the absence of such an opinion or ruling.
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Liquidity Risk Management
The Trust’s staking program involves the temporary loss of the ability to transfer or otherwise dispose of the Trust’s SOL. The Sponsor expects that under normal conditions, the Trust will generally regain complete
control over the Trust’s SOL in up to three days of instructing the Solana Custodian to unstake or "exit" the Trust’s staked SOL positions. However, there can be no guarantee that such process will result in the Trust regaining complete control of
its SOL in time to satisfy its current obligations. Accordingly, the Sponsor may consider a number of options to manage the liquidity of the Trust’s assets in times of stress, including a temporary extension of the settlement timeline for
redemption orders or a temporary suspension of redemption orders. The Sponsor may also rely on other means of managing liquidity in the future such as the use of a credit facility or an alternative liquidity arrangement (including a credit facility
with the Sponsor or its affiliates acting as lender) in its sole discretion.
The Sponsor has adopted a liquidity risk management policy (the “Policy”) related to the management of the Trust’s staking-related liquidity risks. The Sponsor reviews this policy at least annually. The Trust may
reduce the amount of its SOL that is staked as part of managing its liquidity, extend the settlement time for redemptions of Creation Baskets, or seek alternative sources of liquidity, such as a credit facility. As of the date of the Prospectus,
the Trust has not entered into a credit facility or an alternative liquidity arrangement. If the Trust enters into a credit facility or an alternative liquidity arrangement, the Trust will notify shareholders
through the filing of a Form 8-K and a supplement to this Prospectus describing the material terms of any such arrangement.
The Trust will not utilize leverage, derivatives or similar instruments or transactions in seeking to meet its investment objective; however, the Trust may utilize a short term credit facility or an alternative
liquidity arrangement solely for the purposes of obtaining funds necessary to meet redemptions from the Trust. The Policy is designed to manage staking-related liquidity risks, but these risks cannot be fully eliminated, especially in extreme or
stressed market conditions or in the event that the Trust or its service providers experience operational disruptions. Accordingly, investors could still experience delays or limitations on redemptions if the Trust is unable to unstake the
necessary amount of SOL in time to satisfy its current obligations. The Policy is intended to, and is in line with, the listing rules of the Exchange.
The Trust’s Service Providers
The Sponsor
Invesco Capital Management LLC is the Sponsor of the Trust. The Sponsor arranged for the creation of the Trust and is responsible for the ongoing registration of the Shares for their public
offering, the listing of Shares on the Exchange and valuing the SOL held by the Trust. The Sponsor is a limited liability company formed in the State of Delaware on February 7, 2003, and is a wholly-owned subsidiary of Invesco Ltd. Invesco Ltd. and
its subsidiaries, including the Sponsor, are an independent global investment management group. The Sponsor’s principal address is 3500 Lacey Road, Suite 700, Downers Grove, IL 60515.
The Trustee
CSC Delaware Trust Company, a Delaware trust company, acts as the Trustee of the Trust as required to create a Delaware statutory trust in accordance with the Trust Agreement and the DSTA. The
Trustee’s principal address is 251 Little Falls Drive, Wilmington, DE 19808.
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The Administrator
The Bank of New York Mellon (“BNYM”) serves as the Trust’s Administrator. Under the trust administration and accounting agreement, the Administrator provides necessary administrative, tax and
accounting services and financial reporting for the maintenance and operations of the Trust, including calculating the NAV of the Trust, determining the net assets of the Trust, and calculating the size of the Creation Baskets. The Administrator’s
principal address is 240 Greenwich Street, New York, New York 10286.
The Transfer Agent
BNYM also serves as the Transfer Agent for the Trust. The Transfer Agent is responsible for (1) issuing and redeeming Shares in connection with creation and redemption transactions, (2) responding
to correspondence by Shareholders and others relating to its duties, (3) maintaining Shareholder accounts and (4) making periodic reports to the Trust. The Transfer Agent’s principal address is 240 Greenwich Street, New York, New York 10286.
The Solana Custodian
Coinbase Custody Trust Company, LLC serves as the Trust’s Solana Custodian. The Trust has entered into a prime brokerage and custody agreement with the Solana Custodian (the “Solana Custody
Agreement”), pursuant to which the Solana Custodian will hold in custody all of the Trust’s SOL, other than that which may be maintained in a trading account with Coinbase, Inc. from time to time. See “Prospectus Summary—Custody of the Trust’s
Assets,” below. The Solana Custodian is chartered as a limited purpose trust company by the New York State Department of Financial Services (“NYSDFS”) and is authorized by the NYSDFS to provide digital asset custody services. The Solana Custodian is
a wholly-owned subsidiary of Coinbase Global, Inc.
The Solana Custodian is a third-party limited purpose trust company that was chartered in 2018 upon receiving a trust charter from the NYSDFS. The Solana Custodian is subject to regulation by the
NYSDFS and has a long track record of providing custodial services for digital asset private keys. The Sponsor believes that the Solana Custodian’s policies, procedures, and controls for safekeeping, exclusively possessing, and controlling the
Trust’s SOL holdings are consistent with industry best practices to protect against theft, loss, and unauthorized and accidental use of the private keys. Each Trust Solana account at the Solana Custodian and the Sponsor’s Solana account, if any, at
the Solana Custodian are segregated accounts and are therefore not commingled with the Solana Custodian’s corporate or other customer assets.
Although the Solana Custodian carries insurance for the benefit of its account holders, the Solana Custodian’s insurance does not cover any loss in value to SOL and only covers losses caused by
certain events such as fraud or theft and, in such covered events, it is unlikely the insurance would cover the full amount of any losses incurred by the Trust.
The Cash Custodian
BNYM also serves as the cash custodian for the Trust (the “Cash Custodian”) pursuant to a custody agreement (the “Cash Custody Agreement”). The Cash Custodian is responsible for holding the Trust’s
cash, including in connection with creation and redemption transactions effected in cash. The Cash Custodian is a New York state-chartered bank and a member of the Federal Reserve System. The Cash Custodian’s principal address is 240 Greenwich
Street, New York, New York 10286.
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The Staking Provider
If the Staking Condition is satisfied and the Trust seeks to engage in staking of its SOL, the Trust will enter into agreements with the Staking Provider, which may be an affiliate of the Solana
Custodian
and/or the Execution Agent . Subject to the Staking Condition being met, [__] is expected
to serve as a Staking Provider with respect to the Trust’s SOL. The Staking Provider will stake the Trust’s SOL as the node operator and will operate a validator by which the Trust’s SOL is staked. The Staking Provider will perform its staking
services in collaboration with the Solana Custodian, as the SOL will be staked directly from the Trust’s account with the Solana Custodian.
The Execution Agent
The Sponsor has entered into an agreement with Galaxy Digital Funds LLC, a subsidiary of Galaxy Digital LP (“Galaxy” or the “Execution Agent”) to serve as Execution Agent. At the direction of the
Sponsor, the Execution Agent is responsible for selling SOL on behalf of the Trust to the extent necessary to permit the payment of the Trust’s expenses. The Trust also will utilize the services of the Execution Agent to purchase or sell SOL in
connection with cash creations and redemptions. When acquiring or disposing of SOL on behalf of the Trust in connection with a creation or redemption transaction, the Sponsor will provide instructions to the Execution Agent, who will identify a
Solana Counterparty. The Solana Counterparty will not have a pre-existing material relationship with the Trust, except that in some cases the Solana Counterparty may be an affiliate of a service provider to the Trust. In connection with both cash
creation and cash redemption transactions, the Execution Agent, pursuant to the oversight of the Sponsor, will decide how and with which Solana Counterparty to transact on the Trust’s behalf. In addition, as part of this agreement, the Execution
Agent has agreed to co-brand and co-market the Trust and the Sponsor has licensed the use of certain Execution Agent trademarks, service marks and trade names in connection with the Trust. The Execution Agent’s principal address is 300 Vesey Street,
New York City, New York 10282.
Galaxy is a subsidiary of Galaxy Digital Holdings LP (“Galaxy Holdings”). Galaxy Digital Holdings Ltd., which holds a limited partner interest in Galaxy Holdings, is listed on the Toronto Stock
Exchange under the symbol “GLXY.”
Authorized Participants
The Trust will process all creations and redemptions of Shares in transactions with Authorized Participants. Creation and redemption transactions will be conducted in exchange for
SOL in-kind or cash.
When purchasing Creation Baskets in-kind with SOL, Authorized Participants will deliver SOL to the Solana Custodian. After confirming receipt of the SOL by the Solana Custodian, the Transfer
Agent is authorized by the Sponsor to issue Creation Baskets of Shares to the creating Authorized Participant in satisfaction of the creation order.
When purchasing Creation Baskets for cash, Authorized Participants will deliver cash to the Cash Custodian. The Execution Agent will be responsible for acquiring the requisite amount of SOL on
behalf of the Trust on an agency basis on the value date of the order. Once the Execution Agent selects a Solana Counterparty, the Cash Custodian will transfer cash to the Solana Counterparty in payment for the requisite amount of SOL. The SOL
acquired from the Solana Counterparty will be transferred to the Solana Custodian. After receipt of the SOL by the Solana Custodian, the Transfer Agent will issue Creation Baskets of Shares to the creating Authorized Participant in satisfaction of
the creation order.
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When redeeming Creation Baskets in-kind for SOL, the Transfer Agent will redeem the Shares and the Solana Custodian will distribute the resulting SOL to the redeeming Authorized Participant in
satisfaction of the redemption order.
When redeeming Creation Baskets for cash, the Execution Agent will be responsible for selling the requisite amount of SOL on behalf of the Trust on an agency basis. Once the Execution Agent
selects a Solana Counterparty, the Solana Custodian will transfer SOL to the Solana Counterparty in return for the requisite cash payment. The cash received from the Solana Counterparty will be delivered to the Cash Custodian. After receipt of the
cash payment, the Transfer Agent will redeem the Shares and the Cash Custodian will distribute the resulting cash to the redeeming Authorized Participant in satisfaction of the redemption order.
In connection with both cash creation and cash redemption transactions, the Execution Agent, pursuant to the oversight of the Sponsor, will decide how and with which Solana Counterparty to
transact on the Trust’s behalf. The Trust will create Shares by receiving SOL from a third-party that is not the Authorized Participant and the Trust (through the Execution Agent, on an agency basis)—not the Authorized Participant—is responsible
for selecting the third-party to deliver the SOL. Further, the third-party will not be acting as an agent of the Authorized Participant with respect to the delivery of the SOL to the Trust or acting at the direction of the Authorized Participant
with respect to the delivery of the SOL to the Trust. The Trust will redeem shares by delivering SOL to a third-party that is not the Authorized Participant and the Trust (through the Execution Agent, on an agency basis)—not the Authorized
Participant—is responsible for selecting the third-party to receive the SOL. Further, the third-party will not be acting as an agent of the Authorized Participant with respect to the receipt of the SOL from the Trust or acting at the direction of
the Authorized Participant with respect to the receipt of the SOL from the Trust.
Authorized Participants are expected to sell Shares to the public at prices that reflect, among other factors, the value of the Trust’s assets, supply of and demand for Shares and market conditions
at the time of a transaction.
As of the date of the Prospectus, the Trust has entered into Authorized Participant Agreements with [ ].
The Marketing Agent
Invesco Distributors, Inc. (the “Marketing Agent”) is responsible for: (1) working with the Transfer Agent to review and approve, or reject, purchase and redemption orders of Shares placed by
Authorized Participants with the Transfer Agent; and (2) reviewing and approving the marketing materials prepared by the Trust for compliance with applicable SEC and Financial Industry Regulatory Authority (“FINRA”) advertising laws, rules, and
regulations. The Marketing Agent’s principal address is 11 Greenway Plaza, Suite 1000, Houston, TX 77046.
Custody of the Trust’s Assets
The Solana Custodian will keep the private keys associated with the Trust’s SOL in a “cold storage” environment where the private keys are generated and secured (the “Prime Custody Vault”). The
Trust intends to conduct its regular SOL transactions, including in connection with creation and redemption transactions and selling SOL to pay the Trust’s expenses, directly from the Trust’s Prime Custody Vault in over-the-counter transactions
directly with counterparties selected by the Execution Agent. While the Trust does not expect to utilize the services of the Coinbase, Inc. (“Coinbase” or the “Prime Broker”), in connection with transactions where the Trust’s SOL is being processed
in connection with certain creation or redemption transactions or it is being sold to pay Trust expenses, the Execution Agent may elect to transact through the Prime Broker. In such circumstances, the Trust’s SOL may be maintained in a trading
account (the “Trading Balance”) with the Prime Broker, an affiliate of the Solana Custodian. The Trust’s
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SOL will be maintained by the Solana Custodian and Coinbase in accounts that are required to be segregated from the assets held by the Solana Custodian or Coinbase as principal and, when held in
the Prime Custody Vault, the assets of their other customers. “Cold storage” refers to a safeguarding method by which the private keys corresponding to the Trust’s SOL are generated and stored in an offline manner using computers or devices that
are not directly connected to the internet, which is intended to make them more resistant to hacking, or similarly secure technology. All of the Trust’s SOL will be held in the Prime Custody Vault, except that it may be maintained in the Trading
Balance in connection with certain creation or redemption transactions or when it is being sold to pay the Sponsor Fee or Trust expenses not assumed by the Sponsor. Subject to the Staking Condition being met, the Sponsor seeks to stake
substantially all of the Trust’s assets through one or more trusted Staking Providers, except as necessary to (i) pay the Sponsor Fee or other Trust expenses, (ii) satisfy existing and reasonably foreseen potential redemption requests or (iii)
address regulatory or tax concerns raised by staking activities. In consideration for any staking activity in which the Trust may engage, the Trust would receive certain staking rewards of SOL tokens, which may be treated as income to the Trust.
The treatment of staking in a grantor trust for U.S. federal income tax purposes is still developing. As a grantor trust, the Trust can undertake only certain types of activities. Please see "Taxation of the Trust" below for more details. The
Trust will not acquire and will disclaim any Incidental Right or Incidental Right asset received, for example as a result of “forks” or “airdrops,” and such assets will not be taken into account for purposes of determining NAV.
The SOL in the Trust’s account at the Solana Custodian may be held across multiple wallets, any of which will feature the following safety and security measures to be implemented by the Solana
Custodian:
Cold Storage: Cold storage in the context of SOL means keeping the reserve of SOL offline, which is a widely-used security precaution, especially when
dealing with a large amount of SOL. SOL held under custodianship with the Solana Custodian will be kept in high-security, offline, multi-layer cold storage vaults. This means that the private key materials, the cryptographic components that allow a
user to access SOL, are stored offline on hardware that has never been directly connected to the internet. Storing private key materials offline minimizes the risk of the SOL being stolen. The Sponsor expects that all of the Trust’s SOL will be held
in cold storage of the Solana Custodian in the Prime Custody Vault on an ongoing basis, except as noted above. In connection with certain creations or redemptions, the Trust may process creations and redemptions by selling SOL from its Prime Custody
Vault balance.
Private Keys: All private keys are securely protected using multiple layers of high-quality encryption and in Solana Custodian-owned offline hardware in
physically secure environments. No customers or third parties are given access to the Solana Custodian’s private keys.
Whitelisting: Transactions are only sent to vetted, known addresses. The Solana Custodian’s platform supports pre-approval and test transactions. The Solana
Custodian requires authentication when adding or removing addresses for whitelisting. All instructions to initiate a whitelist addition or removal must be submitted via the Solana Custodian’s platform. When a whitelist addition or removal request is
initiated, the initiating user will be prompted to authenticate their request using a two-factor authentication key. A consensus mechanism on the Solana Custodian’s platform dictates how many approvals are required in order for the consensus to be
achieved to add or remove a whitelisted address. Only when the consensus is met is the underlying transaction considered officially approved. An account’s roster and user roles are maintained by the Solana Custodian in a separate log, an Authorized
User List (“AUL”). Any changes to the account’s roster must be reflected on an updated AUL first and executed by an authorized signatory.
Audit Trails: Audit trails exist for all movement of SOL within Solana Custodian-controlled SOL wallets and are audited annually for accuracy and
completeness by an independent external audit firm.
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In addition to the above measures, in accordance with the Solana Custody Agreement, SOL held in custody with the Solana Custodian will be segregated from both the proprietary property of the Solana
Custodian and the assets of any other customer in accounts that clearly identify the Trust as the owner of the accounts.
The Solana Custodian has insurance coverage as a subsidiary under its parent company, Coinbase Global, Inc., which procures fidelity (e.g., crime) insurance to protect the organization from risks
such as theft of funds. Specifically, the fidelity program provides coverage for the theft of funds held in hot or cold storage. The insurance program is provided by a syndicate of industry-leading insurers. The insurance program does not cover,
insure or guarantee the performance of the Trust. The Solana Custodian is not insured by the Federal Deposit Insurance Corporation (“FDIC”).
The Trust relies on the Cash Custodian to hold or transfer any cash related to the purchase or sale of SOL in connection with cash creation and redemption transactions, or held for payment of
expenses not assumed by the Sponsor, such as the Sponsor Fee. In its role, the Cash Custodian helps facilitate the creations and redemptions of Shares done in exchange for cash.
Net Asset Value
NAV means the value of the total assets of the Trust including, but not limited to, all SOL and cash (if any) less the total liabilities of the Trust (including accrued but unpaid expenses),
divided by the number of outstanding Shares.
The Administrator determines the NAV of the Trust on each day that the Exchange is open for regular trading. In determining the Trust’s NAV, the Administrator values the SOL held by the Trust based
on the price established by the Benchmark Provider as of 4:00 p.m. ET each Business Day.
The amount of SOL represented by the Shares will be reduced during the life of the Trust each time the Trust accrues the Sponsor Fee or pays for any extraordinary expenses. This dynamic will occur
irrespective of whether the value of the Trust’s assets, or the trading price of the Shares, rises or falls. See “Risk Factors—Risks Related to the Trust and the Shares—The amount of SOL represented by the Shares will decline over time” and
“Calculation of NAV.”
Plan of Distribution
Most investors buy and sell Shares of the Trust in secondary market transactions through brokers. Shares trade on the Exchange under the ticker symbol “QSOL.” Shares are bought and sold
throughout the trading day like other publicly traded securities. When buying or selling Shares through a broker, most investors incur customary brokerage commissions and charges, as well as any bid-ask spread. Shareholders are encouraged to review
the terms of their brokerage account for details on applicable charges.
Authorized Participants are expected to sell such Shares to the public at prices that reflect, among other factors, the value of the Trust’s assets, supply of and demand for Shares and market
conditions at the time of a transaction. The Trust will continuously offer Creation Baskets consisting of 5,000 Shares to Authorized Participants. Authorized Participants may pay (i) a transaction fee and (ii) transfer, processing and other
transaction costs charged by the Solana Custodian (the “Custody Transaction Fee”) for each order they place to create or redeem Creation Baskets.
Prior to this offering, there has been no public market for the Shares. The Shares are expected to be listed for trading, subject to notice of issuance, on the Exchange under the ticker symbol
QSOL.
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Federal Income Tax Considerations
It is expected that owners of Shares will be treated, for U.S. federal income tax purposes, as if they own a proportionate share of the assets of the Trust, as if they directly receive a
proportionate share of any income of the Trust, and as if they incur a proportionate share of the expenses of the Trust. Consequently, each sale of SOL by the Trust (which includes, under current Internal Revenue Service guidance, using SOL to pay
expenses of the Trust, including the Sponsor Fee) would give rise to taxable gain or loss to Shareholders. See “U.S. Federal Income Tax Consequences—Taxation of U.S. Shareholders.”
Use of Proceeds
Proceeds received by the Trust from the issuance of Creation Baskets consist of SOL in-kind and cash deposits. SOL deposits are held by the Solana Custodian on behalf of the Trust until (i)
delivered to Authorized Participants or their designated agent or client in connection with an in-kind redemption or sold in connection with a cash redemption or (ii) sold to pay the Sponsor’s Fee and Trust expenses of liabilities not assumed by
the Sponsor. Cash deposits are held by the Cash Custodian on behalf of the Trust until (i) transferred in connection with the purchase of SOL, (ii) delivered to Authorized Participants in connection with a redemption of Creation Baskets; or (iii)
transferred to pay the Sponsor Fee or for extraordinary expenses and liabilities not assumed by the Sponsor. If the Staking Condition has been satisfied and subject to any other applicable requirements related to the Staking Condition, proceeds may
also be used in staking activities.
SOL and the Solana Network
SOL is a digital asset, also referred to as a digital currency or cryptocurrency, that is created and transmitted through the operations of the peer-to-peer Solana network (“Solana” or “Solana
network”), which is a network of computers, known as nodes, that operates as cryptographic computer-code based logic, call a protocol. No single entity owns or operates the Solana network, the infrastructure of which is collectively maintained by a
distributed user base, a phenomenon known as decentralization. The Solana network allows people to exchange tokens of value, called SOL, which are recorded on a public transaction ledger known as the Solana blockchain. SOL may be used to pay for
goods and services, including computational power on the Solana network, stored for future use, or converted to a fiat currency, such as the U.S. dollar, at rates determined on digital asset trading platforms, or in individual end-user-to-end-user
transactions under a barter system.
Furthermore, the Solana network also allows users to write and implement smart contracts—that is, general-purpose code that executes on every computer in the network and can instruct the
transmission of information and value based on a sophisticated set of logical conditions. Using smart contracts, users can create markets, store registries of debts or promises, represent the ownership of property, move funds in accordance with
conditional instructions and create digital assets other than SOL on the Solana network. Smart contract operations are executed on the Solana Blockchain in exchange for payment of SOL. The Solana network is one of a number of projects intended to
expand blockchain use beyond just a peer-to-peer money system. The value of SOL is not backed by any government, corporation, or other identified body.
The Solana protocol introduced the Proof-of-History ("PoH") timestamping mechanism. PoH automatically orders on-chain transactions by creating a historical record that proves an event has occurred at a specific moment
in time. PoH is intended to provide a transaction processing speed and capacity advantage over other blockchain networks like Bitcoin and Ethereum, which rely on sequential production of blocks and can lead to delays caused by validator
confirmations. PoH is a new blockchain technology that is not widely used. PoH may not function as intended. For example, it may require more specialized equipment to
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participate in the network and fail to attract a significant number of users, or may be subject to outages or fail to function as intended. In addition, there may be flaws in the cryptography underlying PoH, including
flaws that affect functionality of the Solana network or make the network vulnerable to attack.
In addition to the PoH mechanism described above, the Solana network uses a proof-of-stake consensus mechanism to incentivize SOL holders to validate transactions. Unlike proof-of-work, in which miners expend
computational resources to compete to validate transactions and are rewarded coins in proportion to the amount of computational resources expended, in proof-of-stake, validators risk or “stake” coins to compete to be randomly selected to validate
transactions and are rewarded coins in proportion to the amount of coins staked. Any malicious activity, such as disagreeing with the eventual consensus or otherwise violating protocol rules, results in the forfeiture or “slashing” of a portion of
the staked coins. Proof-of-stake is viewed as more energy efficient and scalable than proof-of-work and is sometimes referred to as “virtual mining.”
The Solana protocol was first conceived by Anatoly Yakovenko in a 2017 whitepaper. Development of the Solana network is overseen by the Solana Foundation, a Swiss non-profit organization, and Solana Labs, Inc. (“Solana
Labs”), a Delaware corporation, which administered the original network launch and token distribution. Although Solana Labs and the Solana Foundation continue to exert significant influence over the direction of the development of Solana, the Solana
network, like the Ethereum network, is understood to be decentralized and does not require governmental authorities or financial institution intermediaries to create, transmit or determine the value of Solana.
In order to own, transfer or use SOL directly on the Solana network (as opposed to through an intermediary, such as a custodian), a person generally must have internet access to connect to the Solana network. SOL
transactions may be made directly between end-users without the need for a third-party intermediary. To prevent the possibility of double-spending SOL, a user must notify the Solana network of the transaction by broadcasting the transaction data to
its network peers. The Solana network provides confirmation against double-spending by memorializing every transaction in the Solana blockchain, which is publicly accessible and transparent. This memorialization and verification against
double-spending is accomplished through the Solana network validation process, which adds “blocks” of data, including recent transaction information, to the Solana blockchain. Unlike other blockchains that rely solely on sequential production of
blocks through proof-of-work or proof-of-stake mechanisms, however, the Solana network introduces PoH, which creates a historical record that proves an event has occurred at a specific moment in time.
The Solana software source code allows for the creation of decentralized applications (“DApps”) that are supported by a transaction protocol referred to as “smart contracts,” which includes the
cryptographic operations that verify and secure SOL transactions. A smart contract operates by a predefined set of rules (i.e., “if/then statements”) that allows it to automatically execute code the same way on any Solana node on the network. Such
actions taken by the predefined set of rules are not necessarily contractual in nature but are intended to eliminate the arbitration of a third party for carrying out code execution on behalf of users, making the system decentralized, while
empowering developers to create a wide range of applications layering together different smart contracts. Smart contracts can be utilized across several different applications ranging from art to finance. One of the most popular applications is the
use of smart contracts for underpinning the operability of decentralized financial services (“DeFi”), which consist of numerous highly interoperable protocols and applications. DeFi is believed by some to offer many opportunities for innovation and
to have the potential to create an open, transparent, and immutable financial infrastructure, with democratized access.
The Solana network operates using open-source protocols, meaning that any user can become a node by downloading a software application that implements
Solana network specification and communications with the Solana network (“Solana Client”), and participating in the Solana network,
and no permission of
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a central authority or body is needed to do so. In addition, anyone can propose a modification to the Solana network’s source code and then propose that the Solana network community support the modification. These proposed modifications to the Solana network’s source code, if adopted, can lead to forks (referred to as “planned forks” because they take
place through a formal process).
A modification of the Solana network’s source code is only effective with respect to the SOL nodes that download it and modify their Solana Clients accordingly, and in practice such
decisions are heavily influenced by the preferences of validators and users. Typically, after a modification introduced and if a sufficiently broad critical mass of users and validators support the modification and nodes download the modification
into their individual Solana Clients, the change is implemented and the Solana network continues to operate uninterrupted, assuming there are no software issues (e.g., bugs, outages, etc.). However, if less
than a sufficiently broad critical mass (in practice, amounting to a substantial majority) of users and validators support the proposed modification and nodes refuse to download the modification to their Solana Clients, and the modification is not
backwards compatible with the Solana blockchain or network or the Solana Clients of nodes prior to their modification, the consequence would be what is known as a “hard fork” of the Solana network, with one group of nodes running the pre-modified
software, with users and validators continuing to use the pre-modified software, while the other group would adopt and run the modified software.
In the event of a hard fork of the Solana network, the Sponsor will instruct the Trust to immediately and irrevocably disclaim all rights to the SOL, cash or other assets or rights received as a
result of a hard fork or airdrop in respect of SOL (“IR Assets”) so created. As a result, shareholders will not receive the benefits of any hard fork or airdrop. SOL is the only digital asset that will be held by the Trust. In the event the Trust
seeks to change its treatment of Incidental Rights or IR Assets, an application would need to be filed with the SEC by the Exchange seeking approval to amend its listing rules.
Assets in the Solana network are held in accounts. Each account, or “wallet,” is made up of at least two components: a public address and a private key. A SOL private key controls the transfer or
“spending” of SOL from its associated public SOL address. A SOL “wallet” is a collection of public Solana addresses and their associated private key(s). This design allows only the owner of SOL to send SOL, the intended recipient of SOL to unlock it,
and the validation of the transaction and ownership to be verified by any third party anywhere in the world.
SOL may be regarded as a currency or digital commodity depending on its specific use in particular transactions. SOL may be used as a medium of exchange or unit of account. Similarly, SOL may be
used as a store of value (i.e., an asset that maintains its value rather than depreciating), although it has experienced significant periods of price volatility.
There can be no assurance as to the future performance of SOL; the past performance and volatility of SOL should not be taken as an indication of future performance or volatility.
The Solana Market
SOL spot trading occurs on venues in the U.S. that are licensed to conduct that business by the NYSDFS, other venues in the U.S. and non-U.S. venues. In addition, SOL futures trading occurs on
trading platforms in the U.S. regulated by the CFTC. The market for NYSDFS-licensed and CFTC-regulated trading of SOL and SOL futures has developed substantially. SOL market conditions in the three months ending on September 30, 2025, are briefly
summarized as follows:
| • |
Solana: There are over 20 NYSDFS-licensed entities operating trading platforms with order books for spot trading of SOL. Among the top NYSDFS-licensed trading platforms, year-to-date as-of
|
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September 30, 2025, the average daily trading volume is approximately $293 million. Across these venues, the average daily deviation of prices was less than 0.08%. The largest
NYSDFS-licensed trading platform by volume had an average bid-ask spread during the period of less than 0.05%.
| • |
Futures: There are currently over 10 CFTC-regulated trading platforms, 2 of which are open and facilitate trading of SOL futures, with a total average daily trading volume of approximately $650
million.
|
Principal Investment Risks of an Investment in the Trust
An investment in the Trust involves risks. You should consider carefully the risks summarized below, which are described in more detail under “Risk Factors.”
Shareholders may choose to use the Trust as means of investing indirectly in SOL. Shareholders considering a purchase of Shares of the Trust should carefully consider how much of their total assets
should be exposed to the SOL market, and should fully understand, be willing to assume, and have the financial resources necessary to withstand, the risks involved in the Trust’s investment strategy, and be in a position to bear the potential loss of
their entire investment in the Trust.
There is no assurance as to whether the Trust will be profitable or meet its expenses and liabilities. Any investment made in the Trust may result in a total loss of the investment.
Risks Related to Solana
Market and Volatility Risk. The trading prices of many digital assets, including SOL, have exhibited high price
volatility relative to more traditional asset classes, which may be due to speculation regarding potential future appreciation in value. The value of the Trust’s investments in SOL could decline rapidly, including to zero.
Some market observers have asserted that the digital asset market, including SOL, periodically experiences pricing “bubbles” and have predicted that, in time, the value of SOL will fall to a
fraction of its current value, or even to zero. SOL has not been in existence long enough for market participants to assess these predictions with any precision, but if these observers are even partially correct, an investment in the Shares may turn
out to be substantially worthless.
Adoption Risk. The further development and acceptance of the Solana network, which is part of a new and rapidly changing industry, is subject to a variety of
factors that are difficult to evaluate. The slowing, stopping or reversing of the development or acceptance of the Solana network may adversely affect the price of SOL and therefore an investment in the Shares.
Currently, there is relatively limited use of SOL in the retail and commercial marketplace in comparison to relatively extensive use as a store of value. Tax treatment of the use of SOL as a medium
of exchange and other factors could hinder expansion of SOL into retail and commercial markets. A lack of expansion by SOL into retail and commercial markets, or a contraction of such use, may result in damage to the public perception of SOL and the
utility of SOL as a payment system, increased volatility or a reduction in the value of SOL, all of which could adversely impact an investment in the Shares. Furthermore, many other digital assets besides SOL have been created. To the extent market
participants come to prefer these other digital assets, the value of SOL, and therefore an investment in the Shares, may be adversely affected.
Regulatory Risk. Regulatory changes or actions may alter the nature of an investment in SOL or restrict the use of SOL or the operations of the Solana
network or venues on which SOL trades in a manner that adversely affects the price of SOL and an investment in the Shares. For example, it may become difficult
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or illegal to acquire, hold, sell or use SOL in one or more countries, which could adversely impact the price of SOL.
Cybersecurity Risk. In the past, flaws in the source code for digital asset networks and related protocols have been
discovered, including those that resulted in the theft of users’ digital assets. Several errors and defects have been publicly found and corrected, including those that disabled some functionality for users and exposed users’ personal information.
Discovery of flaws in or exploitations of the source code that allow malicious actors to take or create money in contravention of known network rules has occurred.
Additionally, if a malicious actor or botnet (i.e., a volunteer or hacked collection of computers controlled by networked software coordinating the actions of the computers) obtains control of more
than 50% of the validating power of the Solana network, such actor or botnet could alter the digital transaction ledger, or “blockchain,” that records transactions in and ownership of SOL and adversely affect the value of SOL.
By using computers that appear to be participating in the Solana network, but that are not in fact connected to the network (so-called “cancer nodes”), a malicious actor can disconnect the target
user from the SOL economy entirely by refusing to relay any blocks or transactions.
Separate from the cybersecurity risks of the Solana protocol, entities that custody or facilitate the transfers or trading of SOL have been frequent and successful targets of cybersecurity attacks,
leading to significant theft of SOL. If any of these exploitations or attacks occur, it could result in a loss of public confidence in SOL, a decline in the value of SOL and, as a result, adversely impact an investment in the Shares.
Risks Related to the Trust and the Shares
Expense Risk. The Trust’s returns will not match the performance of SOL because the Trust incurs the Sponsor Fee and may incur other expenses.
Risk That Market Price of Shares May Reflect a Discount or Premium to NAV. The NAV of the Trust may not always correspond to the market price of its Shares
for a number of reasons, including price volatility, levels of trading activity, differences between the normal trading hours for the Trust and the underlying SOL market, the calculation methodology of the NAV, demand or supply for Shares of the
Trust in excess of an Authorized Participant’s ability to create or redeem Shares and/or the closing of SOL trading platforms due to fraud, failure, security breaches or otherwise. As a result, the NAV of the Shares included in Creation Baskets may
differ from the market price of the Shares.
Cash Creations and Redemptions. The extent of the Trust’s use of cash creations and redemptions, as opposed to in-kind creations and redemptions, may
adversely affect the arbitrage transactions by Authorized Participants intended to keep the price of the Shares closely linked to the price of SOL and, as a result, the price of the Shares may fall or otherwise diverge from NAV. The use of cash
creations and redemptions could cause delays in trade execution due to potential operational issues arising from implementing a cash creation and redemption model. Such delays could cause the execution price associated with such trades to materially
deviate from the Benchmark price used to determine the NAV. Even though the Authorized Participant is responsible for the dollar cost of such difference in prices, Authorized Participants could default on their obligations to the Trust, or such
potential risks and costs could lead to Authorized Participants to elect to not participate in the Trust’s Share creation and redemption processes, which may adversely affect the arbitrage mechanism, and as a result, the price of the Shares may fall
or otherwise diverge from NAV. If the arbitrage mechanism is not effective, purchases or sales of Shares on the secondary market could occur at a premium or discount to NAV, which could harm Shareholders.
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In-Kind Creations and Redemptions. The use of in-kind creations and redemptions of Shares, as opposed to cash creations and redemptions, could lead to
inefficiencies in the arbitrage mechanism. This may result in Shares trading at significant premiums or discounts to their NAV. The Trust’s ability to create and redeem in-kind is new, and broker-dealers may struggle to comply with regulations,
affecting their ability to participate in in-kind transactions. Consequently, the Trust may have to rely more on cash transactions, which could impair liquidity and widen bid/ask spreads. This reliance on cash creations and redemptions could also
increase costs for investors and other market participants, particularly during times of market volatility. Additionally, there is no assurance that broker-dealers will be willing to serve as Authorized Participants for in-kind transactions,
potentially impacting the Trust’s performance and the value of the Shares.
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RISK FACTORS
You should consider carefully the risks described below before making an investment decision. You should also refer to the other information included in this Prospectus, as well as information
found in documents incorporated by reference in this Prospectus, before you decide to purchase any Shares. These risk factors may be amended, supplemented or superseded from time to time by risk factors contained in any periodic report, prospectus
supplement, post-effective amendment or in other reports filed with the SEC in the future.
Risks Related to Solana.
Digital asset networks face significant scaling challenges and efforts to increase the volume and speed of transactions may not be successful.
Many digital asset networks, including the Solana network, face significant scaling challenges due to the fact that public blockchains generally face a tradeoff between security and scalability.
One means through which public blockchains achieve security is decentralization, meaning that no intermediary is responsible for securing and maintaining these systems. For example, a greater degree of decentralization generally means a given digital
asset network is less susceptible to manipulation or capture. In practice, this typically means that every single validator on a given digital asset network is responsible for securing the system by processing every transaction and every single full
node is responsible for maintaining a copy of the entire state of the network. As a result, a digital asset network may be limited in the number of transactions it can process by the fact that all validators participate in validating in each block
and the capabilities of each single fully participating node. Many developers are actively researching and testing scalability solutions for public blockchains that do not necessarily result in lower levels of
security or decentralization, such as off-chain payment channels. Off-chain payment channels would allow parties to transact without requiring the full processing power of a blockchain.
On September 30, 2025, the Solana network handled approximately 976 transactions per second. In an effort to increase the volume of transactions that can
be processed on a given digital asset network, many digital assets are being upgraded with various features to increase the speed and throughput of digital asset transactions. As corresponding increases in throughput lag behind growth in the use of
digital asset networks, average fees and settlement times may increase considerably. For example, the Ethereum network has been, at times, at capacity, which has led to increased transaction fees. In December 2017, the popularity of the
blockchain-based game Cryptokitties led to significant network congestion on the Ethereum network. The game, which allows players to trade and create virtual kitties, represented by non-fungible tokens (“NFTs”), was reported by some sources to have
accounted for more than 10% of the entire Ethereum network traffic at the time causing increases in transaction fees and delays in transaction processing times, and driving Ethereum network traffic to a reported then-all time high. Since inception,
SOL transaction’s base fees have stood at a fixed rate of 0.000005 SOL per transaction. The 30-day average transaction fee on September 30, 2025 was $0.0127, which was equivalent to 0.00058 SOL. Increased fees and decreased settlement speeds could
preclude certain uses for SOL (e.g., micropayments), and could reduce demand for, and the price of, SOL, which could adversely impact the value of the Shares.
The rapid development of other competing scalability solutions, such as those which would rely on handling the bulk of computational work relating to transactions or smart contracts and
applications built on the Solana network (consistent with common usage, all such applications are referred to as “decentralized applications” or “DApps”, whether or not decentralized in fact) outside of the main
Solana network and Solana blockchain, has caused alternatives to sharding to emerge. “Layer 2” is a collective term for solutions which are designed to help increase throughput and reduce transaction fees by
handling or validating transactions off the main Solana network (known as “Layer 1”) and then attempting to take advantage of the perceived security and integrity advantages of the Layer 1 Solana network by uploading the transactions
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validated on the Layer 2 protocol back to the Layer 1 Solana network. The details of how this is done vary significantly between different Layer 2 technologies and implementations. To date, the
Solana network community has not coalesced overwhelmingly around any particular Layer 2 solution, though this could change.
There is no guarantee that any of the mechanisms in place or being explored for increasing the speed and throughput of settlement of Solana network
transactions will be effective, or how long these mechanisms will take to become effective, which could cause the Solana network to not adequately resolve scaling challenges and adversely impact the adoption
of SOL and the Solana network and the value of the Shares. There is no guarantee that any potential scaling solution, whether a change to the Layer 1 Solana network like sharding or the introduction of a Layer 2 solution, will achieve widespread
adoption. It is possible that proposed changes to the Layer 1 Solana network could divide the community, potentially even causing a hard fork, or that the decentralized governance of the Solana network causes network participants to fail to coalesce overwhelmingly around any particular solution, causing the Solana network to suffer reduced adoption or causing nodes, users or
validators to migrate to other blockchain networks. It is also possible that scaling solutions could fail to work as intended or could introduce bugs, coding defects or flaws, security risks, or other problems that could cause them to suffer
operational disruptions. Alternatively, if a widely-used Layer 2 network were to fail, it could reduce demand for SOL because it would eliminate a source of demand for using SOL to record transactions from the Layer 2 onto the Layer 1 Solana
network. Any of the foregoing could adversely affect the price of SOL or the value of the Shares.
Market and Volatility Risk. SOL has exhibited high price volatility relative to more traditional asset classes. For example, there were steep increases in
the value of certain digital assets, including SOL, over the course of 2021. These increases were followed by steep drawdowns throughout 2022. These episodes of rapid price appreciation followed by steep drawdowns have occurred multiple times
throughout SOL’s history. Over the past three years (using data ending September 30, 2025), Solana has exhibited a historical annualized volatility of 95% and maximum annual price decrease of -42%. As of the date of this prospectus, digital asset
prices continued to fluctuate in 2025.
Extreme volatility may persist and the value of the Shares may significantly decline in the future without recovery. The digital asset markets may still be experiencing a bubble or may experience a
bubble again in the future. For example, in the first half of 2022, each of Celsius Network, Voyager Digital Ltd., and Three Arrows Capital declared bankruptcy, resulting in a loss of confidence in participants of the digital asset ecosystem and
negative publicity surrounding digital assets more broadly. In November 2022, FTX Trading Ltd. (“FTX”), one of the largest digital asset trading platforms by volume at the time, halted customer withdrawals amid rumors of the company’s liquidity
issues and likely insolvency, which were subsequently corroborated by its CEO. Shortly thereafter, FTX’s CEO resigned and FTX and many of its affiliates filed for bankruptcy in the United States, while other affiliates have entered insolvency,
liquidation, or similar proceedings around the globe, following which the U.S. Department of Justice brought criminal fraud and other charges, and the SEC and CFTC brought civil securities and commodities fraud charges, against certain of FTX’s and
its affiliates’ senior executives, including its former CEO. In addition, several other entities in the digital asset industry filed for bankruptcy following FTX’s bankruptcy filing, such as BlockFi Inc. and Genesis Global Capital, LLC (“Genesis”).
In response to these events, the digital asset markets have experienced extreme price volatility and other entities in the digital asset industry have been, and may continue to be, negatively affected, further undermining confidence in the digital
asset markets. These events have also negatively impacted the liquidity of the digital asset markets as certain entities affiliated with FTX engaged in significant trading activity. Some sources report the price of Solana declined 94% overall in
2022, including over 50% in the two months following FTX’s declaration of bankruptcy. The 2022 events also negatively impacted the liquidity of the digital asset markets as certain entities affiliated with FTX engaged in significant trading activity.
If the liquidity of the digital asset markets continues to be
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negatively impacted by these or similar events, digital asset prices, including SOL, may continue to experience significant volatility or price declines and confidence in the digital asset markets
may be further undermined.
While regulatory and enforcement scrutiny increased through the end of 2024, including from, among others, the Department of Justice, the SEC, the CFTC, the White House and Congress, as well as
state regulators and authorities, the new U.S. presidential administration has signaled its desire to strengthen U.S. leadership in the digital assets space through the issuance of executive orders and the establishment of an interagency working
group that is tasked with proposing a regulatory framework governing the issuance and operation of digital assets in the United States in early 2025. Meanwhile, the SEC officially rescinded Staff Accounting Bulletin 121 and established a new
“Crypto Task Force” focused on providing clarity on the application of the federal securities laws to digital assets and collaborating with the digital assets industry and the public towards establishing an appropriate regulatory framework. Certain
members of Congress have also outlined a proposed bicameral roadmap for digital asset legislation to address inconsistencies in digital asset classifications. In 2023, the D.C. Circuit Court found that the SEC’s denial of the Grayscale Bitcoin
Trust’s listing was “arbitrary and capricious” under the Administrative Procedures Act in light of the SEC’s approval of two similar bitcoin futures-based exchange-traded products (“ETPs”). In the immediate aftermath of this court decision, the
price of bitcoin increased from nearly $26,000 to over $28,100. After the results of the U.S. presidential election in November 2024, the price of bitcoin rallied to an all-time high of over $100,000 in December 2024 based, in part, on the market’s
perception that the new presidential administration would be pro-cryptocurrency. The exact timeline and impact of these recent regulatory developments on the Trust’s business is uncertain and it is not possible to predict at this time what risks,
if any, that regulatory developments may pose to the Trust, its service providers or to the digital asset industry as a whole.
Extreme volatility in the future, including further declines in the trading prices of SOL, could have a material adverse effect on the value of the Shares and the Shares could lose all or
substantially all of their value. The Trust is not actively managed and will not take any actions to take advantage, or mitigate the impacts, of volatility in the price of SOL.
The value of the Trust’s investments in SOL could decline rapidly, including to zero.
SOL’s historical volatility may be due to speculation regarding potential future appreciation in value, which could adversely affect an investment in the
Shares.
Momentum investing typically is associated with growth stocks and other assets whose valuation, as determined by the investing public, is impacted by anticipated future appreciation in value.
Momentum investing in SOL may have contributed, and may continue to contribute, to speculation regarding potential future appreciation in the value of SOL, inflating and making these prices more volatile. As a result, SOL may be more likely to
fluctuate in value due to changing investor confidence in future appreciation or depreciation in prices, which could adversely affect the price of SOL, and, in turn, an investment in the Trust.
Some market observers have asserted that the SOL market often experiences pricing “bubbles” and have predicted that, in time, the value of SOL will fall to
a fraction of its current value, or even to zero.
SOL has not been in existence long enough for market participants to assess these predictions with any precision, but if these observers are even partially correct, an investment in the Shares may
turn out to be substantially worthless.
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The price of SOL may be impacted by the behavior of a small number of influential individuals or companies.
The price of SOL has experienced increased volatility resulting from the statements and actions of individuals in the SOL and broader technology community. Filings by companies and social media
statements by prominent individuals have in the past and may in the future have an outsized impact on the price of SOL relative to fundamental value considerations. To the extent that the actions of one or more companies or individuals leads to an
increase in the price of SOL, a reversal of such position by the company or individual may have a sharp, negative impact on the price of SOL and the value of the Shares.
Adoption Risk.
User adoption of SOL may slow down, stop, or reverse.
The further development and acceptance of the Solana network, which is part of a new and rapidly changing industry, is subject to a variety of factors that are difficult to evaluate. For example,
the Solana network faces significant obstacles to increasing the usage of SOL without resulting in higher fees or slower transaction settlement times, and attempts to increase the volume of transactions may not be effective. The slowing, stopping or
reversing of the development or acceptance of the Solana network may adversely affect the price of SOL and therefore an investment in the Shares.
The use of SOL to, among other things, buy and sell goods and services is part of a new and rapidly evolving industry that employs digital assets based upon computer-generated mathematical and/or
cryptographic protocols. SOL is a prominent, but not unique, part of this industry. The growth of this industry is subject to a high degree of uncertainty. The factors affecting the further development of this industry, include, but are not limited
to:
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continued worldwide growth or possible cessation or reversal in the adoption and use of SOL and other digital assets;
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government and quasi-government regulation of SOL and other digital assets and their use, including taxation of SOL transactions, or restrictions on or regulation of access to and operation of the Solana network and other digital asset
networks;
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changes in consumer demographics and public tastes and preferences, including the possibility that market participants may come to prefer other digital assets to SOL for a variety of reasons, including that such other digital currencies
may have features (like different consensus mechanisms) or uses that SOL lacks;
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the maintenance and development of the open-source software protocol of the Solana network;
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the availability and popularity of other forms or methods of buying and selling goods and services, including new means of using fiat currencies;
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the use of the networks supporting digital assets for developing smart contracts and distributed applications;
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general economic conditions and the regulatory environment relating to digital assets;
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because of the energy usage required for mining certain digital assets (applicable to proof-of-work blockchains), regulation stemming from energy usage and/or climate concerns; and
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negative consumer or public perception of SOL specifically and other digital assets generally.
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Currently, there is relatively limited use of SOL in the retail and commercial marketplace in comparison to relatively extensive use as a store of value,
thus contributing to price volatility that could adversely affect an investment in the Shares.
SOL has only recently and very selectively been accepted as a means of payment for goods and services by some retail and commercial outlets, and the use of SOL by consumers to pay such retail
and commercial outlets remains extremely limited. Banks and other established financial institutions may refuse to process funds for SOL transactions; process wire transfers to or from SOL trading platforms, SOL-related companies or service
providers; or maintain accounts for persons or entities transacting in SOL or providing SOL-related services. In addition, some taxing jurisdictions, including the U.S., treat the use of SOL as a medium of exchange for goods and services to be a
taxable sale of SOL, which could discourage the use of SOL as a medium of exchange, especially for a holder of SOL that has appreciated in value. See “—Regulatory Risk—The tax treatment of SOL (including staking of SOL) and transactions involving
SOL for U.S. federal income tax purpose is uncertain and may change, which could adversely affect the value of an investment in the Shares.”
Conversely, a significant portion of SOL’s demand is generated by investors seeking to profit from the short- or long-term holding of the asset. Price volatility undermines SOL’s role as a medium
of exchange, as retailers are much less likely to accept it as a form of payment. Use of SOL as a medium of exchange and payment method may always be low. A lack of expansion by SOL into retail and commercial markets, or a contraction of such use,
may result in damage to the public perception of SOL and the utility of SOL as a payment system, increased volatility or a reduction in the value of SOL, all of which could adversely impact an investment in the Shares. There can be no assurance that
such acceptance will grow, or not decline, in the future.
While bitcoin, the first widely used digital asset, and many other digital assets were created and mainly serve as a form of money, digital assets can be used to do more complicated things. Some
digital assets were built specifically with more complex use cases in mind. For example, the Solana network was designed primarily to facilitate smart contracts, with the digital asset SOL serving as the transactional mechanism for many portions of
such contracts. Smart contracts are programs that automatically execute on a blockchain, allowing for a myriad of interesting applications to be built. It is possible that market demand for digital assets with use cases beyond serving as a form of
money could over time reduce the market demand for SOL, which would adversely impact the price of SOL and, as a result, an investment in the Shares. Additionally, certain digital assets use non-blockchain technologies, like Directed Acyclic Graph
data structures, to maintain consensus. To the extent market participants come to prefer these other consensus mechanisms or digital assets that use non-blockchain technology, the value of SOL, and therefore an investment in the Shares, may be
adversely affected.
Competition from central bank digital currencies (“CBDCs”) and other digital assets could adversely affect the value of SOL and other digital assets.
Central banks have introduced digital forms of legal tender (CBDCs). China’s CBDC project, known as Digital Currency Electronic Payment, has reportedly been tested in a live pilot program conducted
in multiple cities in China. A recent study published by the Bank for International Settlements estimated that at least 36 central banks have published retail or wholesale CBDC work ranging from research to pilot projects. Whether or not they
incorporate blockchain or similar technology, CBDCs, as a form of legal tender in the issuing jurisdiction, could have an advantage in competing with, or replace, SOL and other digital assets as a medium of exchange or store of value. As a result,
the value of SOL could decrease, which could adversely affect an investment in the Trust.
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Competing digital assets may adversely affect the value of SOL and digital assets.
Promoters of other digital assets claim that those digital assets have solved certain of the purported drawbacks of the Solana network, for example, allowing faster settlement times, reducing gas
fees, or reducing electricity usage in connection with mining. If these digital assets are successful, such success could reduce demand for SOL and adversely affect the value of SOL and an investment in the Trust.
Prices of SOL may be affected due to stablecoins (including Tether and U.S. Dollar Coin (“USDC”)), the activities of stablecoin issuers and their regulatory
treatment.
While the Trust does not invest in stablecoins, it may nonetheless be exposed to these and other risks that stablecoins pose for the SOL market through its trading in SOL. Stablecoins are digital assets designed to
have a stable value over time as compared to typically volatile digital assets, and are typically marketed as being pegged to a fiat currency, such as the U.S. dollar. Although the prices of stablecoins are intended to be stable, in many cases their
prices fluctuate, sometimes significantly. This volatility has in the past apparently impacted the price of SOL. Stablecoins are a relatively new phenomenon, and it is impossible to know all of the risks that they could pose to participants in the
SOL market. In addition, some have argued that some stablecoins, particularly Tether, are improperly issued without sufficient backing in a way that could cause artificial rather than genuine demand for SOL, raising its price, and also argue that
those associated with certain stablecoins are involved in laundering money. For example, 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.
USDC is a reserve-backed stablecoin issued by Circle Internet Financial that is commonly used as a method of payment in digital asset markets, including the SOL market. The issuer of USDC uses the
Circle Reserve Fund to hold cash, U.S. Treasury bills, notes and other obligations issued or guaranteed as to principal and interest by the U.S. Treasury, and repurchase agreements secured by such obligations or cash, which serve as reserves backing
USDC stablecoins. While USDC is designed to maintain a stable value at 1 U.S. dollar at all times, 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. Stablecoins are reliant on the U.S. banking system and the U.S. treasuries market, and the failure of either to function normally could impede the
function of stablecoins, and therefore could adversely affect the value of the Shares.
Given the foundational role that stablecoins play in global digital asset markets, their fundamental liquidity can have a dramatic impact on the broader digital asset market, including the
market for SOL. Because a large portion of the digital 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 digital
assets more broadly. In the United States, the GENIUS Act, which establishes a federal regulatory framework for stablecoins, was passed by the U.S. Congress and signed into law by President Trump on July 18, 2025. Although increasing regulatory
clarity for stablecoins is generally viewed in a positive light, 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 digital assets (including SOL), or regulatory compliance concerns about stablecoin issuers or intermediaries, such as trading platforms, that support
stablecoins, could impact individuals’ willingness to trade on trading platforms that rely on
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stablecoins, reduce liquidity in the SOL market, and affect the value of SOL, and in turn impact an investment in the Shares.
The open-source structure of the Solana network protocol means that certain core developers and other contributors may not be directly compensated for their
contributions in maintaining and developing the Solana network protocol. A failure to properly monitor and upgrade the Solana network protocol could damage the Solana network.
The Solana network operates based on open-source protocol maintained by a group of core developers and other contributors, largely on the GitHub resource section dedicated to Solana
network development. As new SOL are rewarded solely for validator activity (other than the 500 million minted in 2018 upon launch of the Solana testnet) and are not sold on an ongoing basis to generate revenue to support development activity, and
the Solana network protocol itself is made available for free rather than sold or made available subject to licensing or subscription fees and its use does not generate revenues for its development team, the core developers are generally not
compensated for maintaining and updating the source code for the Solana network protocol. Consequently, there is a lack of financial incentive for developers to maintain or develop the Solana network and the core developers may lack the resources
to adequately address emerging issues with the Solana network protocol. Although the Solana network is currently supported by the core developers, there can be no guarantee that such support will continue or be sufficient in the future. The
perception that high-profile contributors may no longer contribute to the network may have an adverse effect on the market price of any related digital assets. For example, in June 2017, an unfounded rumor circulated that Ethereum core developer
Vitalik Buterin had died. Following the rumor, the price of ether decreased approximately 20% before recovering after Buterin himself dispelled the rumor. Some have speculated that the rumor led to the decrease in the price of ether. In the event a
high-profile contributor to the Solana network, such as Anatoly Yakovenko, is perceived as no longer contributing to the Solana network due to death, retirement, withdrawal, incapacity, or otherwise, whether or not such perception is valid, it
could negatively affect the price of Solana, which could adversely impact the value of the Shares.
Alternatively, some developers may be funded by entities whose interests are at odds with other participants in the Solana network. In addition, a bad actor could also attempt to interfere with the
operation of the Solana network by attempting to exercise a malign influence over a core developer. To the extent that material issues arise with the Solana network protocol and the core developers and open-source contributors are unable to address
the issues adequately or in a timely manner, the Solana network and an investment in the Trust may be adversely affected.
Lack of clarity in the corporate governance of SOL may lead to ineffective decision-making that slows development or prevents the Solana network from
overcoming important obstacles.
Governance of decentralized networks, such as the Solana network, is by voluntary consensus and open competition. Solana has no central decision-making body or clear manner in which participants
can come to an agreement other than through overwhelming consensus. The lack of clarity on governance may adversely affect SOL’s utility and ability to grow and face challenges, both of which may require solutions and a directed effort to overcome
problems, especially long-term problems.
To the extent lack of clarity in corporate governance of SOL leads to ineffective decision-making that slows development and growth, the value of the Shares may be adversely affected.
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Cybersecurity Risk Related to Solana.
Flaws in the source code of Solana, or flaws in the underlying cryptography, could leave the Solana network vulnerable to a multitude of attack vectors.
If the source code or cryptography underlying SOL proves to be flawed or ineffective, malicious actors may be able to steal SOL held by others, which could negatively impact the demand for SOL and
therefore adversely impact the price of SOL. In the past, flaws in the source code for SOL have been discovered, including those that resulted in the loss of users’ SOL. Several errors and defects have been publicly found and corrected, including
those that disabled some functionality for users and exposed users’ personal information. Discovery of flaws in or exploitations of the source code that allow malicious actors to take or create money in contravention of known network rules have
occurred. In addition, the cryptography underlying SOL could prove to be flawed or ineffective, or developments in mathematics and/or technology, including advances in digital computing, algebraic geometry and quantum computing, could result in such
cryptography becoming ineffective. In any of these circumstances, a malicious actor may be able to steal SOL held by others, which could adversely affect the demand for SOL and therefore adversely impact the price of SOL. Even if the affected digital
asset is not SOL, any reduction in confidence in the source code or cryptography underlying digital assets generally could negatively impact the demand for SOL and therefore adversely affect an investment in the Shares.
The Solana network is currently vulnerable to several types of attacks, including:
| • |
“>33% attack” where, if a validator or group of validators were to gain control of more than 33% of the total staked SOL on the Solana network, a malicious actor could temporarily impede or delay block confirmation or even cause a
temporary fork in the blockchain.
|
| • |
“>50% attack” where, if a validator or group of validators acting in concert were to gain control of more than 50% of the total staked SOL on the Solana network, a malicious actor would be able to gain full control of the Solana network
and the ability to manipulate future transactions on the blockchain, including censoring transactions, double-spending and fraudulent block propagation, potentially for an extended period or even permanently. In theory, the minority
non-attackers might reach social consensus to reject blocks proposed by the malicious majority attacker, reducing the attacker’s ability to engage in malicious activity, but there can be no assurance this would happen or that non-attackers
would be able to coordinate effectively.
|
| • |
“>66% attack” where, if a validator or group of validators acting in concert were to gain control of more than 66% of the total staked SOL on the Solana network, a malicious actor could permanently and irreversibly manipulate the
blockchain, including censorship, double-spending and fraudulent block propagation. The attacker could finalize their preferred chain without any consideration for the votes of other stakers and could also revert finalized blocks.
|
If a malicious actor, group or botnet (a voluntary or hacked collection of computers controlled by networked software coordinating the actions of the computers) obtains a majority (over 50%) of the
validating power on the Solana network, it may be able to alter the Solana blockchain on which transactions in SOL rely by constructing fraudulent blocks or preventing certain transactions from completing in a timely manner, or at all. The malicious
actor or botnet could also control, exclude or modify the ordering of transactions. Although the malicious actor or botnet would not be able to generate new tokens or transactions using such control, it could “double-spend” its own tokens (i.e.,
spend the same tokens in more than one transaction) and prevent the confirmation of other users’ transactions for so long as it maintained control (over 50%). To the extent that such malicious actor or botnet did not yield its control of the
validating power on the Solana network or the Solana community did not reject the fraudulent blocks as malicious, reversing any changes made to the Solana blockchain may not be possible. If the malicious actor were to gain control of
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more than 33% of the total staked SOL on the Solana network, they could temporarily impede or delay block confirmation or even cause a temporary fork in the blockchain, but it is not believed that
they could in double-spending or fraudulent block propagation. Even without 33% control, a malicious actor or botnet could create a flood of transactions in order to slow down the Solana network (similar to a denial-of-service attack).
Some digital asset networks have been subject to malicious activity achieved through control over 50% of the processing power on the network. For example, on May 24, 2018, it was reported that
attackers compromised the Bitcoin Gold network in this manner and were successfully able to double-spend units of ether gold in a series of transactions over the course of at least one week and in a total amount of at least $18 million. In addition,
in May 2019, the Bitcoin Cash network experienced a 51% attack when two large mining pools reversed a series of transactions in order to stop an unknown miner from taking advantage of a flaw in a recent Bitcoin Cash protocol upgrade. Although this
particular attack was arguably benevolent, the fact that such coordinated activity was able to occur may negatively impact perceptions of the Bitcoin Cash network. Although the two attacks described above took place on
proof-of-work-based networks, it is possible that a similar attack may occur on the proof-of-stake Solana network, which could negatively impact the value of SOL and the value of the Shares. Furthermore, in August 2020, the Ethereum Classic
Network was the target of two double-spend attacks by an unknown actor or actors that gained more than 50% of the processing power of the Ethereum Classic network. The attacks resulted in reorganizations of the Ethereum Classic blockchain that
allowed the attacker or attackers to reverse previously recorded transactions in excess of $5.0 million and $1.0 million. Other digital assets such as Verge, Monacoin and Electroneum have also suffered similar attacks. To the extent that the Solana
ecosystem, including the core developers and the administrators of mining pools, does not act to ensure greater decentralization of mining processing power, the feasibility of a malicious actor obtaining control of the processing power on the Solana
network will increase, which may adversely affect an investment in the Shares. See “—Regulatory Risk.”
Although there are no known reports of malicious activity on, or control of, the Solana network, it is possible that certain groups of coordinating or connected SOL holders may together have more than 50% of
outstanding SOL, which if staked and if the users run validators, would permit them to exert authority over the validation of SOL transactions. This risk is heightened if over 50% of the processing power on the network falls within the jurisdiction
of a single governmental authority. If network participants, including the core developers and the administrators of validating pools, do not act to ensure greater decentralization of SOL, the feasibility of a malicious actor obtaining control of the
validating power on the Solana network will increase, which may adversely affect the value of the Shares.
A malicious actor may also obtain control over the Solana network through its influence over core or influential developers. For example, this could allow the malicious actor to stymie legitimate
network development efforts or attempt to introduce malicious code to the network under the guise of a software improvement proposal by such a developer. To the extent that the Solana ecosystem fails to attract a significant number of users, the
possibility that a malicious actor may be able to obtain control of the Solana network in this manner will remain heightened.
By using cancer nodes, a malicious actor can disconnect the target user from the SOL economy entirely by refusing to relay any blocks or transactions.
Separate from the cybersecurity risks of the Solana protocol, entities that custody or facilitate the transfers or trading of SOL have been frequent and successful targets of cybersecurity attacks,
leading to significant theft of SOL.
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See “Solana and the Solana Market—Solana and the Solana Network—Forms of Attack Against the Solana Network.”
If any of these exploitations or attacks occur, it could result in a loss of public confidence in SOL and a decline in the value of SOL and, as a result, adversely impact an investment in the
Shares.
Smart contracts are new and their ongoing development and operation may result in problems or be subject to errors or hacks, which could reduce the demand
for SOL or cause a wider loss of confidence in the Solana network, either of which could have an adverse impact on the value of SOL.
Since smart contracts typically cannot be stopped or reversed, vulnerabilities in their programming (i.e., coding errors) can have damaging effects. For instance, coding errors may potentially
create vulnerabilities that allow an attacker to drain the funds associated with the smart contract, cause issues or render the protocol unusable. There have been a number of vulnerabilities in various smart contract implementations exploited by
hackers since the launch of the Ethereum network in 2015 that have resulted in the loss of ether from accounts. For example, in February 2022, a vulnerability in a smart contract for Wormhole, a bridge between the
Ethereum and Solana networks, led to a $320 million theft of ether. While persons associated with Solana Labs and/or the Solana Foundation are understood to have played a key role in bringing the network back online, the broader community also
played a key role, as Solana validators coordinated to upgrade and restart the network. Problems with the development, deployment, and operation of smart contracts may have an adverse effect on the value of SOL.
In some cases, smart contracts can be controlled by one or more “admin keys” or users with special privileges, or “super users”. These users may have the ability to unilaterally make changes to the
smart contract, enable or disable features on the smart contract, change how the smart contract receives external inputs and data, and make other changes to the smart contract.
Many applications associated with DeFi are currently deployed on the Solana network, and smart contracts relating to DeFi applications currently represent a significant source of demand for SOL.
For smart contracts that hold a pool of digital asset reserves, smart contract super users or admin key holders may be able to extract funds from the pool, liquidate assets held in the pool, or take other actions that decrease the value of the
digital assets held by the smart contract in reserves. Even for digital assets that have adopted a decentralized governance mechanism, such as smart contracts that are governed by the holders of a governance token, such governance tokens can be
concentrated in the hands of a small group of core community members, who would be able to make similar changes unilaterally to the smart contract. If any such super user or group of core members unilaterally make adverse changes to a smart contract,
the design, functionality, features and value of the smart contract, its related digital assets may be harmed. In addition, assets held by the smart contract in reserves may be stolen, misused, burnt, locked up or otherwise become unusable and
irrecoverable. Super users can also become targets of hackers and malicious attackers. Furthermore, the underlying smart contracts may be insecure, contain bugs or other vulnerabilities, or otherwise may not work as intended. Any of the foregoing
could cause users of the DeFi application to be negatively affected, or could cause the DeFi application to be the subject of negative publicity. Because DeFi applications may be built on the Solana network and represent a significant source of
demand for SOL, public confidence in the Solana network itself could be negatively affected, and the value of SOL could decrease.
SOL transactions are irrevocable and stolen or incorrectly transferred SOL may be irretrievable. As a result, any incorrectly executed SOL transactions
could adversely affect an investment in the Trust.
SOL transactions are not reversible. Once a transaction has been verified and recorded in a block that is added to the Solana blockchain, an incorrect transfer of a digital asset, such as SOL, or a
theft of SOL
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generally will not be reversible and the Trust may not be capable of seeking compensation for any such transfer or theft. To the extent that the Trust is unable to successfully seek redress for
such error or theft, such loss could adversely affect an investment in the Trust.
The custody of the Trust’s SOL is handled by the Solana Custodian, and the transfer of SOL to and from Authorized Participants or their agents is directed by the Sponsor. If the Solana Custodian’s
internal procedures and controls are inadequate to safeguard the Trust’s SOL holdings, and the Trust’s private key(s) is (are) lost, destroyed or otherwise compromised and no backup of the private key(s) is (are) accessible, the Trust will be unable
to access its SOL, which could adversely affect an investment in the Shares of the Trust. In addition, if the Trust’s private key(s) is (are) misappropriated and the Trust’s SOL holdings are stolen, including from or by the Solana Custodian, the
Trust could lose some or all of its SOL holdings, which could adversely impact an investment in the Shares of the Trust.
Security threats to the Trust’s account with the Solana Custodian could result in the halting of Trust operations and a loss of Trust assets or damage to
the reputation of the Trust, each of which could result in a reduction in the price of the Shares.
The Trust and its service providers’ use of internet, technology and information systems (including mobile devices and cloud-based service offerings) may expose the Trust to potential risks linked
to cyber-security breaches of those technological or information systems. Security breaches, computer malware, ransomware and computer hacking attacks have been a prevalent concern in relation to digital assets. The Sponsor believes that the Trust’s
SOL held in the Trust’s account with the Solana Custodian will be an appealing target to hackers or malware distributors seeking to destroy, damage or steal the Trust’s SOL and will only become more appealing as the Trust’s assets grow. To the extent
that the Trust, the Sponsor or the Solana Custodian is unable to identify and mitigate or stop new security threats or otherwise adapt to technological changes in the digital asset industry, the Trust’s SOL may be subject to theft, loss, destruction
or other attack.
The Sponsor has evaluated the security procedures in place for safeguarding the Trust’s SOL. Nevertheless, the security procedures cannot guarantee the prevention of any loss due to a security
breach, software defect or act of God that may be borne by the Trust.
The security procedures and operational infrastructure may be breached due to the actions of outside parties, error or malfeasance of an employee of the Sponsor, the Solana Custodian, or otherwise,
and, as a result, an unauthorized party may obtain access to the Trust’s account with the Solana Custodian, the private keys (and therefore SOL) or other data of the Trust. Additionally, outside parties may attempt to fraudulently induce employees of
the Sponsor, the Solana Custodian, or the Trust’s other service providers to disclose sensitive information in order to gain access to the Trust’s infrastructure. As the techniques used to obtain unauthorized access, disable or degrade service, or
sabotage systems change frequently, or may be designed to remain dormant until a predetermined event and often are not recognized until launched against a target, the Sponsor and the Solana Custodian may be unable to anticipate these techniques or
implement adequate preventative measures.
An actual or perceived breach of the Trust’s account with the Solana Custodian could harm the Trust’s operations, result in partial or total loss of the Trust’s assets, damage the Trust’s
reputation and negatively affect the market perception of the effectiveness of the Trust, all of which could in turn reduce demand for the Shares, resulting in a reduction in the price of the Shares. The Trust may also cease operations, the
occurrence of which could similarly result in a reduction in the price of the Shares.
While the Sponsor has established business continuity plans and systems that it believes are reasonably designed to prevent cyber attacks, there are inherent limitations in such plans and systems
including the
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possibility that certain risks have not been, or cannot be, identified. Service providers may have limited indemnification obligations to the Trust, which could be negatively impacted as a result.
If the Solana Custody Agreement is terminated or the Solana Custodian or the Prime Broker or Staking Provider fail to provide services as required, the
Sponsor may need to find and appoint a replacement custodian, prime broker and/or staking provider, which could pose a challenge to the safekeeping and safe transfer of the Trust’s SOL, and the Trust’s ability to continue to operate may be
adversely affected.
The Trust is dependent on the Solana Custodian and Prime Broker to operate. The Solana Custodian performs essential functions in terms of safekeeping the Trust’s SOL, and its affiliate, Coinbase
may be utilized by the Trust to facilitate the selling of SOL by the Trust to pay the Sponsor Fee and, to the extent applicable, other Trust expenses, or in certain circumstances, to purchase and sell SOL in connection with cash creation or
redemption transactions. If the Solana Custodian or Prime Broker fail to perform the functions they perform for the Trust due to insolvency, business failure or interruption, default, failure to perform, security breach, or other problems affecting
the Solana Custodian or the Prime Broker, the Trust may be unable to operate or create or redeem Creation Baskets, which could force the Trust to liquidate or adversely affect the price of the Shares.
Additionally, the Trust depends on Staking Provider to execute staking. Staking rewards proceeds will depend on the success of the Staking Provider, including the technology used by such
parties. If the Solana Custodian or a Staking Provider experiences technical difficulties or service outages, or is otherwise unable to optimally execute the staking program the Trust's receipt of staking rewards and the value of the Shares may be
adversely affected.
Similarly, if an Authorized Participant or a Solana Trading Counterparty suffers insolvency, business failure or interruption, default, failure to perform, security breach, or in certain circumstances a
force majeure event or if an Authorized Participant or a Solana Trading Counterparty chooses not to participate in the creation and redemption process of the Trust, and the Trust is unable to engage replacement Authorized Participants or Solana
Trading Counterparties or access alternative services on commercially acceptable terms or at all, then the creation and redemption process of the Trust, the arbitrage mechanism used to keep the Shares in line with the NAV and the Trust’s operations
generally could be negatively affected.
On March 22, 2023, Coinbase and the Solana Custodian’s parent company, Coinbase Global Inc. (“Coinbase Global” and together, the “Relevant Coinbase Entities”) received a “Wells Notice” from the SEC
staff stating that the SEC staff made a “preliminary determination” to recommend that the SEC file an enforcement action against the Relevant Coinbase Entities alleging violations of the federal securities laws, including the Securities Exchange Act
of 1934, as amended (the “Exchange Act”) and the Securities Act of 1933, as amended (the “Securities Act”). According to Coinbase Global’s public reporting company disclosure, based on discussions with the SEC staff, the Relevant Coinbase Entities
believe these potential enforcement actions would relate to aspects of the Relevant Coinbase Entities’ Coinbase Prime service, spot market, staking service Coinbase Earn, and Coinbase Wallet and the potential civil action may seek injunctive relief,
disgorgement, and civil penalties. On June 6, 2023, the SEC filed a complaint against the Relevant Coinbase Entities in federal district court in the Southern District of New York, alleging, inter alia: (i) that Coinbase has violated the Exchange Act
by failing to register with the SEC as a national securities exchange, broker-dealer, and clearing agency, in connection with activities involving certain identified digital assets that the SEC’s complaint alleges are securities, (ii) that Coinbase
has violated the Securities Act by failing to register with the SEC the offer and sale of its staking program, and (iii) that Coinbase Global is jointly and severally liable as a control person under the Exchange Act for Coinbase’s violations of the
Exchange Act to the same extent as Coinbase. On February 27, 2025, the SEC announced that it had filed a joint stipulation with Coinbase and Coinbase Global to dismiss the ongoing civil enforcement action against the two entities. The SEC’s complaint
against the Relevant Coinbase Entities
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did not allege that ether is a security nor does it allege that Coinbase’s activities involving ether caused the alleged registration violations, and the Solana Custodian was not named as a
defendant. In the event of any future SEC or other governmental, regulatory or other enforcement action of litigation, Coinbase could be required, as a result of a judicial determination, or could choose, to restrict or curtail the services it
offers, or its financial condition and ability to provide prime brokerage services to the Trust could be affected. If Coinbase were to be required or choose, as a result of a regulatory action or litigation to restrict or curtail the services it
offers, it could negatively affect the Trust’s ability to operate or process creations or redemptions of Creation Baskets, which could force the Trust to liquidate or adversely affect the price of the Shares. While the Solana Custodian was not named
in the complaint, if Coinbase Global, as the parent of the Solana Custodian, is required, as a result of a judicial determination, or could choose, to restrict or curtail the services its subsidiaries provide to the Trust, or its financial condition
is negatively affected, it could negatively affect the Trust’s ability to operate.
If the Solana Agreement is terminated, the Sponsor may not be able to find a party willing to serve as the custodian of the Trust’s SOL or as the Trust’s prime broker under the same terms as the
current Solana Custody Agreement or at all. To the extent that Sponsor is not able to find a suitable party willing to serve as the custodian or prime broker, the Sponsor may be required to terminate the Trust and liquidate the Trust’s SOL. In
addition, to the extent that the Sponsor finds a suitable party but must enter into a modified Solana Custody Agreement that is less favorable for the Trust or Sponsor, the value of the Shares could be adversely affected.
Loss of a critical banking relationship for, or the failure of a bank used by, the Execution Agent could adversely impact the Trust’s ability to create or
redeem Creation Baskets, or could cause losses to the Trust.
The Execution Agent is responsible for selling SOL on behalf of the Trust to pay the Sponsor Fee and, to the extent applicable, other Trust expenses. In addition, the Execution Agent will purchase
or sell SOL in connection with cash creations and redemptions. The Execution Agent may rely on bank accounts to provide its execution services and hold any cash related to a customer’s purchase or sale of SOL. To the extent that the Execution Agent
faces difficulty establishing or maintaining banking relationships, the loss of the Execution Agent’s banking partners or the imposition of operational restrictions by these banking partners and the inability for the Execution Agent to utilize other
financial institutions may result in a disruption of creation and redemption activity of the Trust, or cause other operational disruptions or adverse effects for the Trust.
The Trust could also suffer losses in the event that a bank in which the Execution Agent holds customer cash fails, becomes insolvent, enters receivership, is taken over by regulators, enters
financial distress, or otherwise suffers adverse effects to its financial condition or operational status. For example, Silvergate Bank, Silicon Valley Bank, Signature Bank, and First Republic Bank recently experienced financial distress, including
voluntary liquidation and receiverships.
Changing circumstances and market conditions, some of which may be beyond the Trust’s or the Sponsor’s control, could impair the Trust’s ability to access the Trust’s cash associated with the
Trust’s orders to purchase or sell SOL in connection with payment of the Sponsor Fee, and to the extent applicable, other Trust expenses, or in connection with creation and redemption transactions. If the Execution Agent were to experience financial
distress or its financial condition is otherwise affected by the failure of its banking partners, the Execution Agent’s ability to provide services to the Trust could be affected. Moreover, the future failure of a bank at which the Execution Agent
maintains customer cash could result in losses to the Trust, to the extent the balances are not subject to deposit insurance.
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The Execution Agent may utilize the services of the Prime Broker to route Trust orders through certain Connected Trading Venues. The loss or failure of any
such Connected Trading Venues may adversely affect the Execution Agent’s ability to execute the Trust’s SOL transactions and cause losses for the Trust.
In connection with selling SOL on behalf of the Trust, the Execution Agent (acting as agent of the Trust) may elect to route SOL purchase or sale orders to a trading platform operated by Coinbase,
Inc., the Prime Broker. The Prime Broker provides access to a number of trading platforms and venues where the Execution Agent, acting on behalf of the Trust, may execute orders to buy and sell SOL (each such venue, a “Connected Trading Venue”). In
connection with these activities, the Prime Broker may hold SOL with such Connected Trading Venues for a short time in order to effect the Trust’s orders. If the Prime Broker were unable to access to these Connected Trading Venues, its trading
services (and therefore the Execution Agent’s services as well) could be adversely affected to the extent that the Execution Agent is limited in its ability to execute order flow for the Trust, and the Trust could suffer resulting losses or
disruptions to its operations. While the Prime Broker has policies and procedures to oversee Connected Trading Venues, if any of these venues experience any technical, legal, regulatory or other adverse events, such as shutdowns, delays, system
failures, suspension of withdrawals, illiquidity, insolvency, or loss of customer assets, the Execution Agent, on behalf of the Trust, might not be able to fully recover the Trust’s SOL.
A disruption of the internet may affect the use of SOL and subsequently the value of the Shares.
Solana is dependent upon the internet. A significant disruption in internet connectivity could disrupt the Solana network’s operations until the disruption is resolved and have an
adverse effect on the price of SOL. In particular, some variants of digital assets have been subjected to a number of denial-of-service attacks, which have led to temporary delays in block creation and in the transfer of the digital assets. While in
certain cases in response to an attack, an additional hard fork has been introduced to increase the cost of certain network functions, the relevant network has continued to be the subject of additional attacks. Moreover, it is possible that if SOL
increases in value, it may become a bigger target for hackers and subject to more frequent hacking and denial-of-service attacks.
Any future attacks that impact the ability to transfer SOL could have a material adverse effect on the price of SOL and the value of an investment in the Shares.
Regulatory Risk.
As SOL and the broader digital assets ecosystem has grown, it has begun to attract more regulatory attention around the globe. The future regulatory
environment is uncertain and may vary by country or even within countries. Failure to appropriately regulate the digital assets ecosystem could stifle innovation, which could adversely impact the value of the Shares.
As SOL and digital assets have grown in both popularity and market size, the U.S. Congress and a number of U.S. federal and state agencies (including the Financial Crimes Enforcement Network
(“FinCEN”), SEC, OCC, CFTC, FINRA, the Consumer Financial Protection Bureau (“CFPB”), the Department of Justice, the Department of Homeland Security, the Federal Bureau of Investigation, the U.S. Internal Revenue Service (the “IRS”), state financial
institution regulators, and others) have been examining the operations of digital asset networks, digital asset users and the digital asset trading platform market. Many of these state and federal agencies have brought enforcement actions and issued
advisories and rules relating to digital asset markets. Although such actions were dismissed in 2025, since 2023 the SEC has charged certain large U.S. digital asset trading platforms (Binance, Coinbase and Kraken) with supporting the trading and
settlement of securities in violation of the U.S. federal securities laws. The U.S. Congress is also actively preparing new legislation to address certain market structure issues relating to digital assets and stablecoins. The outcome of this
legislation is unknown. Ongoing and future regulatory actions and federal legislation with
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respect to digital assets generally or any single digital asset in particular may alter, perhaps to a materially adverse extent, the nature of an investment in the Shares and/or the ability of the
Trust to continue to operate.
For example, the events of 2022, including among others the bankruptcy filings of FTX and its subsidiaries, Three Arrows Capital, Celsius Network, Voyager Digital, Genesis, BlockFi and others, and
other developments in the digital asset markets, have resulted in calls for heightened scrutiny and regulation of the digital asset industry, with a specific focus on intermediaries such as digital asset trading platforms and custodians. Federal and
state legislatures and regulatory agencies may introduce and enact new laws and regulations to regulate crypto asset intermediaries, such as digital asset trading platforms and custodians. The March 2023 collapses of Silicon Valley Bank, Silvergate
Bank, and Signature Bank, which in some cases provided services to the digital assets industry, or similar future events, may amplify and/or accelerate these trends. On January 3, 2023, the federal banking agencies issued a joint statement on
crypto-asset risks to banking organizations following events which exposed vulnerabilities in the crypto-asset sector, including the risk of fraud and scams, legal uncertainties, significant volatility, and contagion risk. Although banking
organizations are not prohibited from crypto-asset related activities, the agencies have expressed significant safety and soundness concerns with business models that are concentrated in crypto-asset related activities or have concentrated exposures
to the crypto-asset sector.
U.S. federal and state regulators, as well as the White House, issued reports and releases concerning crypto assets, including Solana and crypto asset markets. Further, in 2023 the House of
Representatives formed two new subcommittees: the Digital Assets, Financial Technology and Inclusion Subcommittee and the Commodity Markets, Digital Assets, and Rural Development Subcommittee, each of which were formed in part to analyze issues
concerning crypto assets and demonstrate a legislative intent to develop and consider the adoption of federal legislation designed to address the perceived need for regulation of and concerns surrounding the crypto industry. However, the extent and
content of any forthcoming laws and regulations are not yet ascertainable with certainty, and it may not be ascertainable in the near future. A divided Congress makes any prediction difficult. We cannot predict how these and other related events will
affect us or the crypto asset business.
President Trump has issued executive orders addressing the administration’s intention to establish a comprehensive digital asset regulatory framework. There have also been several bills introduced
in Congress that propose to establish additional regulation and oversight of the digital asset markets.
On January 21, 2025, the SEC’s acting Chairman Mark T. Uyeda announced the SEC Crypto Task Force. The task force has an objective of developing a comprehensive and clear regulatory framework for
crypto assets. Following the task force announcement, on January 23, 2025, President Trump executed the Strengthening American Leadership in Digital Financial Technology Executive Order. It is currently unknown how the actions or recommendations of
the task force and this Executive Order or future governmental actions may impact the status of Solana or any other digital asset as a “security” or how Solana or the Trust would be treated under any new or revised regulatory framework.
President Trump’s January 23, 2025 Executive Order, titled “Strengthening American Leadership in Digital Financial Technology”, aimed to reorient the federal governments approach to digital assets.
The Executive Order emphasized the importance of the digital asset industry in innovation and economic development, and outlined policies to support the growth and use of digital assets, blockchain technology and related technologies. President
Trump’s order also revoked former President Biden’s March 9, 2022 Executive Order, titled, “Responsible Development of Digital Assets” and the U.S. Department of Treasury’s July 7, 2022 “Framework for International Engagement of Digital Assets” and
all policies, directives and guidance issued pursuant to those items produced by the previous administration. In July of 2025, President Trump’s Working Group on Digital Asset Markets released a report, “Strengthening American Leadership in Digital
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Financial Technology”, which directed the SEC and other government agencies to provide additional clarity to on certain regulatory considerations in U.S. cryptocurrency markets. The consequences of
federal regulation of digital assets and digital asset activities could have a material adverse effect on the Trust and the Shares. If the Sponsor determines not to comply with such regulatory and registration requirements, it may seek to cease
certain or all of the Trust’s operations. Any such action could have a material adverse effect on our business, financial condition and results of operations.
It is not possible to predict whether, or when, any of these developments will lead to Congress granting 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 or how any new regulations or changes to existing regulations might impact the value of digital assets
generally and SOL held by the Trust specifically. The consequences of increased federal regulation of digital assets and digital asset activities could have a material adverse effect on the Trust and the Shares.
FinCEN requires any administrator or exchanger of convertible digital assets to register with FinCEN as a money transmitter and comply with the anti-money laundering regulations applicable to money
transmitters. Entities which fail to comply with such regulations are subject to fines, may be required to cease operations, and could have potential criminal liability. For example, in 2015, FinCEN assessed a $700,000 fine against a sponsor of a
digital asset for violating several requirements of the Bank Secrecy Act by acting as a money services business and selling the digital asset without registering with FinCEN, and by failing to implement and maintain an adequate anti-money laundering
program. In 2017, FinCEN assessed a $110 million fine against BTC-e, a now defunct digital asset trading platform, for similar violations. The requirement that trading platforms that do business in the U.S. register with FinCEN and comply with
anti-money laundering regulations may increase the cost of buying and selling SOL and therefore may adversely affect the price of SOL and an investment in the Shares.
The Office of Foreign Assets Control (“OFAC”) of the U.S. Department of the Treasury (the “U.S. Treasury Department”) has added digital currency addresses to the list of Specially Designated
Nationals whose assets are blocked, and with whom U.S. persons are generally prohibited from dealing. Such actions by OFAC, or by similar organizations in other jurisdictions, may introduce uncertainty in the market as to whether a digital asset that
has been associated with such addresses in the past can be easily sold. This “tainted” digital asset may trade at a substantial discount to an untainted digital asset. Reduced fungibility in the digital asset markets may reduce the liquidity of such
digital assets and therefore adversely affect their price.
In February 2020, then-U.S. Treasury Secretary Steven Mnuchin stated that digital assets were a “crucial area” on which the U.S. Treasury Department has spent significant time. Secretary Mnuchin
announced that the U.S. Treasury Department is preparing significant new regulations governing digital asset activities to address concerns regarding the potential use for facilitating money laundering and other illicit activities. In December 2020,
FinCEN, a bureau within the U.S. Treasury Department, proposed a rule that would require financial institutions to submit reports, keep records, and verify the identity of customers for certain transactions to or from so-called “unhosted” wallets,
also commonly referred to as self-hosted wallets. In January 2021, U.S. Treasury Secretary nominee Janet Yellen stated her belief that regulators should “look closely at how to encourage the use of digital assets for legitimate activities while
curtailing their use for malign and illegal activities.”
Under regulations from the New York State Department of Financial Services (“NYSDFS”), businesses involved in digital asset business activity for third parties in or involving New York,
excluding merchants and consumers, must apply for a license, commonly known as a BitLicense, from the NYSDFS and must comply with anti-money laundering, cyber security, consumer protection, and financial and reporting requirements, among others. As
an alternative to a BitLicense, a firm can apply for a charter to become a
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limited purpose trust company under New York law qualified to engage in certain digital asset business activities. Other states have considered or approved digital asset business activity
statutes or rules, passing, for example, regulations or guidance indicating that certain digital asset business activities constitute money transmission requiring licensure. The regulation of digital asset activity under state money transmission
laws varies substantially.
The inconsistency in applying money transmitting licensure requirements to certain businesses may make it more difficult for these businesses to provide services, which may affect consumer adoption
of SOL and its price. In an attempt to address these issues, the Uniform Law Commission passed a model law in July 2017, the Uniform Regulation of Virtual Currency Businesses Act, which has many similarities to the BitLicense and features a
multistate reciprocity licensure feature, wherein a business licensed in one state could apply for accelerated licensure procedures in other states. It is still unclear, however, how many states, if any, will adopt some or all of the model
legislation.
The transparency of blockchains has in the past facilitated investigations by law enforcement agencies. However, certain privacy-enhancing features have been, or are expected to be, introduced to a number of digital
asset networks, and these features may provide law enforcement agencies with less visibility into transaction histories. If the Solana network was to adopt any of these privacy-enhancing features, these features may provide law enforcement agencies
with less visibility into transaction-level data. For example, “privacy pools,” zero knowledge proofs, and other technologies that could enhance privacy have been discussed by participants in the Solana network, Europol, the European Union’s law
enforcement agency, released a report in October 2017 noting the increased use of privacy-enhancing digital assets like Zcash and Monero in criminal activity on the internet. In August 2022, OFAC banned all U.S. citizens from using Tornado Cash, a
digital asset protocol designed to obfuscate blockchain transactions, by adding certain Ethereum wallet addresses associated with the protocol to its Specially Designated Nationals list. On October 19, 2023, FinCEN published a proposed rulemaking to
apply the authorities in Section 311 of the USA PATRIOT Act to impose requirements on financial institutions that engage in convertible virtual currency (“CVC”) transactions with CVC mixers. The proposed rule, if adopted, would require covered
financial institutions to report to FinCEN any CVC transactions they process that involves CVC mixing within or involving a jurisdiction outside the United States. The term “CVC mixing” covers more than just transactions that involve CVC mixers like
Tornado Cash, and seemingly could cover a broader range of conduct involving technologies, services, or methods that have the effect of obfuscating the source, destination, or amount of a CVC transaction, whether or not the obfuscation was
intentional. If the rule were to be adopted as proposed and if the Solana network were to be deemed to or were to adopt features which come within the rule’s ambit, it could cause covered financial institutions - such as many virtual currency
exchanges, or the Trust’s service providers, such as the Prime Broker or Cash Custodian - to reduce support for or cease offering services for Solana or to the Trust, which could impair the utility of Solana, the value of the Shares and the Trust’s
ability to operate in compliance with new laws and regulations. Although no regulatory action has been taken to treat privacy-enhancing digital assets differently, this may change in the future.
In addition, a determination that SOL is a security under U.S. or foreign law could adversely affect an investment in the Shares. See “—Future regulations may require the Trust and the Sponsor to
become registered, which may cause the Trust to liquidate.”
As an owner of Shares, you will not have the rights normally associated with ownership of other types of shares.
Shares are not entitled to the same rights as shares issued by a corporation. By acquiring Shares, you are not acquiring the right to elect directors, to receive dividends, to vote on most matters
regarding the issuer of the Shares or to take other actions normally associated with the ownership of shares.
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The Sponsor and the Trustee may agree to amend the Trust Agreement without the consent of the Shareholders.
The Sponsor and the Trustee may agree to amend the Trust Agreement without Shareholder consent. The Sponsor shall determine the content and manner of delivery of any notice of any Trust Agreement
amendment. Such notice may be provided on the Trust’s website, in a prospectus supplement, through a current report on Form 8-K and/or in the Trust’s annual or quarterly reports. If an amendment to the Trust Agreement imposes new fees and charges or
increases existing fees or charges, including the Sponsor Fee (except for taxes and other governmental charges, registration fees or other such expenses), or prejudices a substantial existing right of Shareholders, it will become effective for
outstanding Shares 30 days after notice of such amendment is given to registered owners. Shareholders that are not registered owners (which most Shareholders will not be) may not receive specific notice of a fee increase other than through an
amendment to the Prospectus. Moreover, at the time an amendment becomes effective, by continuing to hold Shares, Shareholders are deemed to consent and agree to the amendment and to be bound by the Trust Agreement as amended without specific
agreement to such increase (other than through the “negative consent” procedure described above).
Shareholders do not have the protections associated with ownership of Shares in an investment company registered under the 1940 Act or the protections
afforded by the CEA.
The Trust is not an investment company subject to the 1940 Act, and the Sponsor believes that the Trust is not required to register under such act. Accordingly, investors do not have the
protections afforded by that statute, which is designed to ensure that registered funds are acting in their investors’ best interests, minimize conflicts of interest and provide for the impartial oversight of investment companies. For example,
registered investment companies subject to the 1940 Act must have a board of directors, a certain minimum percentage of whom must be independent (generally, at least a majority). Further, registered investment companies’ advisory and sub-advisory
contracts must be annually reapproved by a majority of (1) the entire board of directors and (2) the independent directors. Additionally, such registered investment companies are subject to prohibitions and restrictions on transactions with their
affiliates and required to maintain fund assets with special types of custodians (generally, banks or broker-dealers). Moreover, such registered investment companies are subject to significant limits on the use of leverage, as well as limits on the
form of capital structure and the types of securities a registered fund can issue. In addition, under Section 36(b) of the 1940 Act, investment advisers to registered investment companies have an express fiduciary duty with respect to their receipt
of compensation for services.
The Trust will not hold or trade in commodity interests regulated by the CEA, as administered by the CFTC. Furthermore, the Sponsor believes that the Trust is not a commodity pool for purposes of
the CEA, and that neither the Sponsor nor the Trustee is subject to regulation by the CFTC as a commodity pool operator or a commodity trading advisor in connection with the operation of the Trust. Consequently, Shareholders will not have the
regulatory protections provided to investors in CEA-regulated instruments or commodity pools.
The exclusive jurisdiction for certain types of actions and proceedings and waiver of trial by jury clauses set forth in the Trust Agreement may have the
effect of limiting a Shareholder’s rights to bring legal action against the Trust and could limit a purchaser’s ability to obtain a favorable judicial forum for disputes with the Trust.
The Trust Agreement provides that the Court of Chancery of the State of Delaware or, if such court does not have subject matter jurisdiction, any other courts located in Delaware will be the
exclusive jurisdiction for any claims, suits, actions or proceedings, provided that (i) the forum selection provisions do not apply to suits brought to enforce a duty or liability created by the Exchange Act or any other claim for which the
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federal courts have exclusive jurisdiction and (ii) the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of
action arising under any federal securities law. By purchasing Shares in the Trust, Shareholders waive certain claims that the courts of the State of Delaware and any other courts located in Delaware is an inconvenient venue or is otherwise
inappropriate. As such, Shareholder could be required to litigate a matter relating to the Trust in a Delaware court, even if that court may otherwise be inconvenient for the Shareholder.
The Trust Agreement also provides that each Shareholder waives the right to trial by jury in any such claim, suit, action or proceeding. If a lawsuit is brought against the Trust, it may be heard
only by a judge or justice of the applicable trial court, which would be conducted according to different civil procedures and may result in different outcomes than a trial by jury would have, including results that could be less favorable to the
plaintiffs in any such action. No Shareholder can waive compliance with respect to the U.S. federal securities laws and the rules and regulations promulgated thereunder.
If a Shareholder opposed a jury trial demand based on the waiver, the applicable court would determine whether the waiver was enforceable based on the facts and circumstances of that case in
accordance with applicable federal laws. To the Trust’s knowledge, the enforceability of a contractual pre-dispute jury trial waiver in connection with claims arising under the U.S. federal securities laws has not been finally adjudicated by the
U.S. Supreme Court. However, the Trust believes that a contractual jury trial waiver provision is generally enforceable, including under the laws of the State of Delaware, which govern the Trust Agreement. By purchasing Shares in the Trust,
Shareholders waive a right to a trial by jury which may limit a Shareholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with the Trust.
As the Sponsor and its management have relatively limited history of operating investment vehicles like the Trust, their experience may be inadequate or
unsuitable to manage the Trust.
While the Sponsor, its management team, and the Execution Agent operate other investment vehicles that, like the Trust, specifically invest in digital assets, including a spot bitcoin
exchange-traded product and a spot ether exchange-traded product, they have a relatively limited track record. This limited experience poses several potential risks to the effective management and operation of the Trust. Digital assets, such as SOL,
are known for their high volatility, unique technical, legal and regulatory challenges, and rapidly evolving market dynamics. The Sponsor’s relatively limited experience in this specific field may not fully equip them to navigate these complexities
effectively, but by managing its own products and through its relationships with the Execution Agent and the Solana Custodian, the Sponsor has amassed significant knowledge regarding SOL and the digital asset markets in general.
The past performance of the Sponsor’s or the Execution Agent’s management in other investment vehicles are no indication of their ability to manage an investment vehicle such as the Trust. The
unique nature of digital assets makes past performance an unreliable indicator of future success in this area. The digital asset market is technology-driven and requires a deep understanding of the underlying blockchain technology and security
considerations. The Sponsor’s limited experience may not fully encompass the technical expertise required to mitigate risks such as cyber threats, technological failures, or operational errors related to digital asset transactions and custody.
Should the experience of the Sponsor, its management team, or the Execution Agent prove inadequate or unsuitable for managing a digital asset-based investment vehicle like the Trust, it could
result in suboptimal decision-making, increased operational risks, and potential legal or regulatory non-compliance. These factors could adversely affect the Trust’s operations, leading to potential losses for investors or a decrease in the Trust’s
overall value.
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Furthermore, the Sponsor and the Execution Agent are currently engaged in the management of other investment vehicles which could divert their attention and resources. If the Sponsor were to
experience difficulties in the management of such other investment vehicles that damaged the reputation of either the Sponsor or the Execution Agent, it could have an adverse impact on their ability to continue to serve as Sponsor or Execution Agent,
respectively, for the Trust.
Future regulations may require the Trust and the Sponsor to become registered, which may cause the Trust to liquidate.
Current and future federal or state legislation, SEC and CFTC rulemaking, and other regulatory developments may impact the manner in which SOL is treated for classification and clearing purposes.
In particular, certain transactions in SOL may be deemed to be commodity interests under the CEA or SOL may be classified by the SEC as a “security” under U.S. federal securities laws. The Sponsor and the Trust cannot be certain as to how future
regulatory developments will impact the treatment of SOL (including staking) under the law. In the face of such developments, the required registrations and compliance steps may result in extraordinary, nonrecurring expenses to the Trust. If the
Sponsor decides to dissolve the Trust in response to the changed regulatory circumstances, the Trust may be dissolved or liquidated at a time that is disadvantageous to Shareholders.
To the extent that SOL is deemed to fall within the definition of a “commodity interest” under the CEA, the Trust and the Sponsor may be subject to additional regulation under the CEA and CFTC
regulations. The Sponsor may be required to register as a commodity pool operator or commodity trading adviser with the CFTC and become a member of the National Futures Association (“NFA”) and may be subject to additional regulatory requirements with
respect to the Trust, including disclosure and reporting requirements. These additional requirements may result in extraordinary, recurring and/or nonrecurring expenses of the Trust, thereby materially and adversely impacting the Shares. If the
Sponsor determines it is not feasible or desirable to comply with such additional regulatory and registration requirements, the Sponsor will likely terminate the Trust. Any such termination could result in the liquidation of the Trust’s SOL at a time
that is disadvantageous to Shareholders.
To the extent that SOL is deemed to fall within the definition of a security under U.S. federal securities laws, the Trust, the Trustee and the Sponsor may be subject to additional requirements under
the Investment Company Act and the Sponsor may be required to register as an investment adviser under the Investment Advisers Act. Such additional registration may result in extraordinary, recurring and/or non‑recurring expenses of the Trust, thereby
materially and adversely impacting the Shares. If the Sponsor determines it is not feasible or desirable to comply with such additional regulatory and registration requirements, the Sponsor will likely terminate the Trust. Any such termination could
result in the liquidation of the Trust’s SOL at a time that is disadvantageous to Shareholders.
The SEC has not asserted regulatory authority over SOL or trading or ownership of SOL and has not expressed the view that SOL should be classified or treated as a security for purposes of U.S.
federal securities laws. In March 2018, it was reported that the SEC was examining as many as 100 investment funds with strategies focused on digital assets. The reported focus of the examinations is on the accuracy of risk disclosures to investors
in these funds, digital asset pricing practices, and compliance with rules meant to prevent the theft of investor funds, as well as on information gathering so that the SEC can better understand new technologies and investment products. It has
further been reported that some of these funds have received subpoenas from the SEC’s Enforcement Division. The SEC also has determined that certain digital assets are securities under the U.S. securities laws. In these determinations, the SEC
reasoned that the unregistered offer and sale of digital assets can, in certain circumstances, including ICOs, be considered illegal public offering of securities. A significant amount of funding for digital asset startups has come from ICOs, and
if ICOs are halted or face obstacles, or companies that rely on them face legal action or
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investigation, it could have a negative impact on the value of digital assets, including SOL. However, the SEC’s “Crypto Task Force” has indicated that it is re-examining how digital assets are
considered “securities” under the federal securities laws and the timeline and outcome of such action is uncertain at this time. Finally, the SEC’s Division of Examinations (“Examinations”) has stated that digital assets are an examination priority
for 2025. In particular, Examinations has expressed its intent to focus its examination on the offer, sale, recommendation, advice, trading, and other activities involving crypto assets that are offered and sold as securities or related products,
such as spot bitcoin or ether ETPs.
The SEC has recently proposed amendments to the custody rules under Rule 206(4)-2 of the Investment Advisers Act. The proposed rule changes would amend the definition of a “qualified custodian” under
Rule 206(4)-2(d)(6) and expand the current custody rule in 206(4)-2 to cover all digital assets, including SOL, and related advisory activities. If enacted as proposed, these rules would likely impose additional regulatory requirements with respect
to the custody and storage of digital assets, including SOL. The Sponsor is studying the impact that such amendments may have on the Trust and its arrangements with the Solana Custodian and Prime Broker. It is possible that such amendments, if
adopted, could prevent the Solana Custodian and Prime Broker from serving as service providers to the Trust, or require potentially significant modifications to existing arrangements under the Custody Agreement and Prime Broker Agreement, which could
cause the Trust to bear potentially significant increased costs. If the Sponsor is unable to make such modifications or appoint successor service providers to fill the roles that the Solana Custodian and Prime Broker currently play, the Trust’s
operations (including in relation to creations and redemptions of Creation Units and the holding of SOL) could be negatively affected, the Trust could be terminated (including at a time that is potentially disadvantageous to Shareholders), and the
value of the Shares or an investment in the Trust could be affected. Further, the proposed amendments could have a severe negative impact on the price of SOL and therefore the value of the Shares if enacted, by, among other things, making it more
difficult for investors to gain access to SOL, or causing certain holders of SOL to sell their holdings.
SOL and other digital 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 digital assets,
including SOL. Moreover, other events, such as the interruption in telecommunications or internet services, cyber-related terrorist acts, civil disturbances, war or other catastrophes, could also negatively affect the digital asset economy in one or
more jurisdictions. For example, Russia’s invasion of Ukraine on February 24, 2022 led to volatility in digital asset prices, with an initial steep decline followed by a sharp rebound in prices. The effect of any existing regulation or future
regulatory change or other events on the Trust or SOL is impossible to predict, but such change could be substantial and adverse to the Trust and the value of the Shares. Various foreign jurisdictions have adopted, and may continue to adopt in the
near future, laws, regulations or directives that affect SOL, particularly with respect to SOL trading platforms and service providers that fall within such jurisdictions’ regulatory scope. Laws, regulations or directives in foreign countries may
conflict with those of the United States and may negatively impact the acceptance of SOL by users, merchants and service providers outside the United States and may therefore impede the growth or sustainability of the SOL economy in these
jurisdictions as well as in the United States and elsewhere, or otherwise negatively affect the value of SOL, and, in turn, the value of the Shares.
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If regulatory changes or interpretations of an Authorized Participant’s, the Trust’s or the Sponsor’s activities require the regulation of an Authorized
Participant, the Trust or the Sponsor as a money service business under the regulations promulgated by FinCEN under the authority of the U.S. Bank Secrecy Act or as a money transmitter or digital asset business under state regimes for the licensing
of such businesses, an Authorized Participant, the Trust or the Sponsor may be required to register and comply with such regulations, which could result in extraordinary, recurring and/or nonrecurring expenses to the Authorized Participant, Trust or
Sponsor or increased commissions for the Authorized Participant’s clients, thereby reducing the liquidity of the Shares.
To the extent that the activities of any Authorized Participant, the Trust or the Sponsor cause it to be deemed a “money services business” under the regulations promulgated by FinCEN under the
authority of the U.S. Bank Secrecy Act, such Authorized Participant, the Trust or the Sponsor may be required to comply with FinCEN regulations, including those that would mandate the Authorized Participant to implement anti-money laundering
programs, make certain reports to FinCEN and maintain certain records. Similarly, the activities of an Authorized Participant, the Trust or the Sponsor may require it to be licensed as a money transmitter or as a digital asset business, such as under
NYSDFS’ BitLicense regulation.
Such additional regulatory obligations may cause an Authorized Participant, the Trust or the Sponsor to incur extraordinary expenses. If an Authorized Participant, the Trust or the Sponsor decide
to seek the required licenses, there is no guarantee that they will timely receive them. In addition, to the extent an Authorized Participant, the Trust, or the Sponsor is found to have operated without appropriate state or federal licenses, it may
be subject to investigation, administrative or court proceedings, and civil or criminal monetary fines and penalties, all of which could harm the reputation of the Authorized Participant, the Trust or the Sponsor and affect the value of the Shares.
Furthermore, an Authorized Participant, the Trust, or the Sponsor may not be able to timely acquire necessary state licenses or be capable of complying with certain federal or state regulatory obligations applicable to money services businesses,
money transmitters, and businesses engaged in digital asset activity. An Authorized Participant may also instead decide to terminate its role as Authorized Participant of the Trust, or the Sponsor may decide to dissolve the Trust. Dissolution by an
Authorized Participant may decrease the liquidity of the Shares, which may adversely affect the value of the Shares, and any dissolution of the Trust in response to the changed regulatory circumstances may be at a time that is disadvantageous to the
Shareholders.
The tax treatment of SOL, SOL staking and transactions involving SOL for U.S. federal income tax purpose is uncertain and may change, which could adversely
affect the value of an investment in the Shares.
Current IRS guidance indicates that SOL should be treated and taxed as property, not as currency, for U.S. federal income tax purposes, and that transactions involving the payment of SOL in return
for goods and services should be treated as barter transactions. Such exchanges result in gain or loss measured by the difference between the price at which SOL is exchanged and the taxpayer’s basis in the SOL. However, because SOL is a new
technological innovation, because IRS guidance has taken the form of administrative pronouncements that may be modified without prior notice and comment, and because there is as yet little case law on the subject, the U.S. federal income tax
treatment of an investment in SOL or in transactions relating to investments in SOL may change from that described in this Prospectus, possibly with retroactive effect. Any such change in the U.S. federal income tax treatment of SOL may have a
negative effect on prices of SOL and may adversely affect the value of the Shares. In this regard, the IRS has indicated that it has made it a priority to issue additional guidance related to the taxation of virtual currency transactions, such as
transactions involving SOL. In addition, the IRS and U.S. Department of Treasury have proposed regulations regarding the tax information reporting rules for cryptocurrency transactions. While it has started to issue such additional guidance, whether
any future guidance will adversely affect the U.S. federal income tax treatment of an investment in SOL or in transactions relating to investments in SOL is unknown.
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Moreover, future developments that may arise with respect to digital currencies may increase the uncertainty with respect to the treatment of digital currencies for U.S. federal income tax
purposes.
Investors should consult their personal tax advisors before making any decision to purchase the Shares of the Trust. Additionally, the tax considerations
contained herein are in summary form and may not be used as the sole basis for the decision to invest in the Shares from a tax perspective, since the individual situation of each investor must also be taken into account. Accordingly, the
considerations regarding taxation contained herein should not be used as any sort of material information or tax advice nor are they in any way to be construed as a representation or warranty with respect to specific tax consequences. The tax
treatment of SOL, staking and transactions involving SOL for state and local tax purposes is uncertain and may change, which could adversely affect the value of an investment in the Shares.
Because SOL is a new technological innovation, the tax treatment of SOL for state and local tax purposes, including without limitation state and local income and sales and use taxes, is not
settled. A number of states have issued their own guidance regarding the tax treatment of certain digital assets for state income or sales and use tax purposes. It is uncertain what guidance, if any, on the treatment of SOL for state and local tax
purposes may be issued in the future. Such treatment may have negative consequences for investors in digital assets, including the potential imposition of a greater tax burden on investors in digital assets or the potential imposition of greater
costs on the acquisition and disposition of digital assets. In either case, such different tax treatment may potentially have a negative effect on the price of SOL and a negative impact on the NAV of the Trust.
A hard “fork” or airdrop of the Solana blockchain could result in Shareholders incurring a tax liability.
If a hard fork, airdrop or similar event occurs in the Solana blockchain, the Sponsor will instruct the Trust to immediately and irrevocably disclaim all rights to the IR Assets so created.
Although the Sponsor will instruct the Trust to immediately and irrevocably disclaim all rights to the IR Assets so created, it is possible that Shareholders may still incur a federal income tax liability as a result of a hard fork, airdrop or
similar event if, for example, the IRS does not recognize such a disclaimer. Under current guidance, the IRS has held that a hard fork resulting in the receipt of new units of cryptocurrency is a taxable event giving rise to ordinary income. While
the IRS has not addressed all situations in which airdrops occur, it is clear from the reasoning of the IRS’s current guidance that it generally would treat an airdrop as a taxable event giving rise to ordinary income.
Current IRS guidance does not address whether income recognized by a non-U.S. person as a result of a hard fork, airdrop or similar occurrence could be subject to the 30% withholding tax imposed on
U.S. source “fixed or determinable annual or periodical gains, profits and income” (“FDAP”). A Non-U.S. Shareholder (as defined under “U.S. Federal Income Tax Consequences” below) should assume that, in the absence of guidance, a withholding agent
(including the Sponsor) is likely to withhold 30% of any such income recognized by a Non-U.S. Shareholder in respect of its Shares, including by deducting such withheld amounts from proceeds that such Non-U.S. Shareholder would otherwise be entitled
to receive in connection with a distribution of the new digital asset. There is also the possibility that the Trust may be required to remit a withholding payment to the U.S. Treasury even if there are no distributions to such Non-U.S. Shareholder
in the taxable year in which the hard fork, airdrop or similar event occurs.
The receipt, distribution and/or sale of the new digital asset may cause Shareholders to incur a United States federal, state, and/or local, or non-U.S. tax liability. Any tax liability could
adversely impact an investment in the Shares and may require Shareholders to prepare and file tax returns they would not otherwise be required to prepare and file.
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A U.S. Tax-Exempt Shareholder may recognize “unrelated business taxable income” as a consequence of an investment in the Shares.
Under current IRS guidance, hard forks, airdrops, staking rewards and similar events with respect to digital assets will under certain circumstances be treated as taxable events giving rise to
ordinary income. In the absence of guidance to the contrary, it is possible that any such income recognized by a U.S. Tax-Exempt Shareholder (as defined under “U.S. Federal Income Tax Consequences” below) would constitute “unrelated business taxable
income” (“UBTI”). U.S. Tax-Exempt Shareholders should consult their tax advisers regarding whether such Shareholders may recognize UBTI as a consequence of an investment in the Shares.
Intellectual property rights claims may adversely affect the operation of the Solana network.
Third parties may assert intellectual property claims relating to the holding and transfer of SOL and its source code. Regardless of the merit of any intellectual property or other legal action,
any threatened action that reduces confidence in long-term viability or the ability of end-users to hold and transfer SOL may adversely affect an investment in the Trust. Additionally, a meritorious intellectual property claim could prevent the Trust
and other end-users from accessing, holding or transferring SOL, which could force the liquidation of the Trust’s holdings of SOL. As a result, an intellectual property claim against the Trust or other large SOL participants could adversely affect an
investment in the Shares.
Risks Related to the Markets and Service Ecosystems for SOL
The venues through which cryptocurrencies (including SOL) trade are relatively new and may be more exposed to operational problems or failure than trading
platforms for other assets, which could adversely affect the value of SOL and therefore adversely affect an investment in the Shares.
Platforms through which SOL trades are relatively new. SOL trading platforms are generally subject to different regulatory requirements than venues for trading more traditional assets, and may be
subject to limited or no regulation, especially outside the U.S. Furthermore, many such trading platforms, including exchanges and over-the-counter trading venues, do not provide the public with significant information regarding their ownership
structure, management teams, corporate practices or regulatory compliance, and may take the position that they are not subject to laws and regulations that would apply to a national securities exchange or designated contract market in the United
States, or may, as a practical matter, be beyond the ambit of U.S. regulators. SOL trading platforms may impose daily, weekly, monthly or customer-specific transaction or distribution limits or suspend withdrawals entirely, rendering the exchange of
SOL for fiat currency difficult or impossible. Participation in SOL trading on some venues requires users to take on credit risk by transferring digital assets from a personal account to a third party’s account, which could discourage trading on
those platforms.
Over the past several years, a number of cryptocurrency trading platforms have been closed due to fraud, failure or security breaches. In many of these instances, the customers of such platforms
were not compensated or made whole for the partial or complete losses of their account balances in such exchanges. While smaller trading platforms are less likely to have the infrastructure and capitalization that make larger trading platforms more
stable, larger trading venues are more likely to be appealing targets for hackers and “malware” (i.e., software used or programmed by attackers to disrupt computer operation, gather sensitive information or gain access to private computer systems)
and their shortcomings or ultimate failures are more likely to have contagion effects on the digital asset ecosystem. For example, in 2014, the largest bitcoin trading platform at the time, Mt. Gox, filed for bankruptcy in Japan amid reports the
trading platform lost up to 850,000 bitcoin, valued then at over $450 million.
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As another example, in January 2015, Bitstamp announced that approximately 19,000 bitcoin had been stolen from its operational or “hot” wallets. In August 2016, it was reported that almost 120,000
bitcoin worth around $78 million were stolen from Bitfinex, a large bitcoin trading platform. The value of bitcoin immediately decreased by more than 10% following reports of the theft at Bitfinex. In addition, in December 2017, Yapian, the operator
of Seoul-based digital asset trading platform Youbit, suspended digital asset trading and filed for bankruptcy following a hack that resulted in a loss of 17% of Yapian’s assets. Following the hack, Youbit users were allowed to withdraw approximately
75% of the digital assets in their trading platform accounts, with any potential further distributions to be made following Yapian’s pending bankruptcy proceedings. In January 2018, Japan-based exchange Coincheck reported that over $500 million worth
of the digital asset NEM had been lost due to hacking attacks, resulting in significant decreases in the prices of bitcoin, ether and other digital assets as the market grew increasingly concerned about the security of digital assets. Following South
Korean-based trading platform Coinrail’s announcement in early June 2018 about a hacking incident, the price of bitcoin and ether dropped more than 10%. In September 2018, Japan-based trading platform Zaif announced that approximately $60 million
worth of digital assets, was stolen due to hacking activities. In May 2019, one of the world’s largest digital asset trading platforms, Binance, was hacked, resulting in losses of approximately $40 million. Further, in November 2022, FTX Trading Ltd.
(“FTX”), one of the largest digital asset trading platforms by volume at the time, halted customer withdrawals amid rumors of the company’s liquidity issues and likely insolvency, which were subsequently corroborated by its CEO. Shortly thereafter,
FTX’s CEO resigned and FTX and many of its affiliates filed for bankruptcy in the United States, while other affiliates have entered insolvency, liquidation, or similar proceedings around the globe, following which the U.S. Department of Justice
brought criminal fraud and other charges, and the SEC and CFTC brought civil securities and commodities fraud charges, against certain of FTX’s and its affiliates’ senior executives, including its former CEO. Around the same time, there were reports
that approximately $300-600 million of digital assets were removed from FTX and the full facts remain unknown, including whether such removal was the result of a hack, theft, insider activity, or other improper behavior. Various claims and issues
related to FTX have not yet been resolved.
More recently, in February 2025, the crypto exchange Bybit was hacked, resulting in the theft of over $1.5 billion of ether. SOL trading platforms that are regulated typically must comply with
minimum net worth, cybersecurity, and anti-money laundering requirements, but are not typically required to protect customers to the same extent as regulated securities exchanges or futures exchanges.
Some academics and market observers have put forth evidence to support claims that manipulative trading activity has occurred on certain digital asset trading platforms. For example, in a 2017
paper titled “Price Manipulation in the Bitcoin Ecosystem” sponsored by the Interdisciplinary Cyber Research Center at Tel Aviv University, a group of researchers used publicly available trading data, as well as leaked transaction data from a 2014
Mt. Gox security breach, to identify and analyze the impact of “suspicious trading activity” on Mt. Gox between February and November 2013, which, according to the authors, caused the price of bitcoin to increase from around $150 to more than $1,000
over a two-month period. In August 2017, it was reported that a trader or group of traders nicknamed “Spoofy” was placing large orders on Bitfinex without actually executing them, presumably in order to influence other investors into buying or
selling by creating a false appearance that greater demand existed in the market. In December 2017, an anonymous blogger (publishing under the pseudonym Bitfinex’d) cited publicly available trading data to support his or her claim that a trading bot
nicknamed “Picasso” was pursuing a paint-the-tape-style manipulation strategy by buying and selling bitcoin and bitcoin cash between affiliated accounts in order to create the appearance of substantial trading activity and thereby influence the price
of such assets.
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Anonymity and illicit financing risk.
Although transaction details of peer-to-peer transactions are recorded on the Solana blockchain, a buyer or seller of digital assets on a peer-to-peer basis directly on the Solana network may never
know to whom the public key belongs or the true identity of the party with whom it is transacting. Public key addresses are randomized sequences of alphanumeric characters that, standing alone, do not provide sufficient information to identify users.
In addition, certain technologies may obscure the origin or chain of custody of digital assets. The opaque nature of the market poses asset verification challenges for market participants, regulators and auditors and gives rise to an increased risk
of manipulation and fraud, including the potential for Ponzi schemes, bucket shops and pump and dump schemes. Digital assets have in the past been used to facilitate illicit activities. If a digital asset was used to facilitate illicit activities,
businesses that facilitate transactions in such digital assets could be at increased risk of potential criminal or civil lawsuits, or of having banking or other services cut off, and such digital asset could be removed from digital asset trading
platforms. Any of the aforementioned occurrences could adversely affect the price of the relevant digital asset, the attractiveness of the respective blockchain network and an investment in the Shares. While the Trust’s SOL transactions are expected
to be effected by the Execution Agent over-the-counter with known counterparties, if the Trust or the Sponsor were to transact with a sanctioned entity, the Trust or the Sponsor would be at risk of potential criminal or civil lawsuits or liability.
The Trust takes measures with the objective of reducing illicit financing risks in connection with the Trust’s activities. However, illicit financing risks are present in the digital asset markets,
including markets for SOL. There can be no assurance that the measures employed by the Trust will prove successful in reducing illicit financing risks, and the Trust is subject to the complex illicit financing risks and vulnerabilities present in the
digital asset markets. If such risks eventuate, the Trust or the Sponsor or their affiliates could face civil or criminal liability, fines, penalties, or other punishments, be subject to investigation, have their assets frozen, lose access to banking
services or services provided by other service providers, or suffer disruptions to their operations, any of which could negatively affect the Trust’s ability to operate or cause losses in value of the Shares.
Furthermore, Authorized Participants, as broker-dealers, and the Execution Agent, Prime Broker and Solana Custodian, as entities licensed to conduct virtual currency business activity by the New
York Department of Financial Services and a limited purpose trust company subject to New York Banking Law, respectively, are “financial institutions” subject to the U.S. Bank Secrecy Act, as amended (“BSA”), and U.S. economic sanctions laws. The
Trust will only accept SOL in connection with creation and redemption requests from Solana Counterparties who have represented to the Trust or the Execution Agent that they have implemented compliance programs that are designed to ensure compliance
with applicable sanctions and anti-money laundering laws. In addition, with respect to all SOL delivered to the Trust by Solana Counterparties in connection with creation requests, the Solana Counterparties must represent to the Trust or the
Execution Agent that it will form a reasonable belief (i) as to the identities of, and conduct necessary diligence with respect to, any counterparties from whom the Solana Counterparty obtains SOL being transferred and (ii) that such SOL being
transferred by the Solana Counterparty to the Trust were not derived from, or associated with, unlawful or criminal activity.
The Sponsor, the Execution Agent and the Trust have adopted and implemented policies and procedures that are designed to ensure that they do not violate applicable AML and sanctions laws and
regulations and to comply with any applicable KYC laws and regulations. Each of the Sponsor, the Execution Agent and the Trust will only interact with known third party service providers with respect to whom it has engaged in a due diligence process
including a thorough KYC process, such as the Authorized Participants and the Solana Custodian. Authorized Participants, as broker-dealers, and the Solana Custodian, as a limited purpose trust company subject to New York Banking Law, are subject to
the BSA and U.S. economic sanctions laws.
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The Solana Custodian has adopted and implemented an anti-money laundering and sanctions compliance program that provides protections intended to ensure that the Sponsor and the Trust do not
transact with a sanctioned party. Notably, the Solana Custodian performs Know-Your-Transaction (“KYT”) screening using blockchain analytics to identify, detect, and mitigate the risk of transacting with a sanctioned or other unlawful actor. Pursuant
to the Solana Custodian’s KYT program, any SOL that is delivered to the Trust’s custody account will undergo screening to ensure that the origins of that SOL are not illicit.
There is no guarantee that such procedures will always be effective. If the Authorized Participants, the Execution Agent, the Solana Custodian or the Prime Broker were to have inadequate policies,
procedures and controls for complying with applicable anti-money laundering and applicable sanctions laws or the Trust’s diligence is ineffective, violations of such laws could result, which could result in regulatory liability for the Trust, the
Sponsor, the Trustee or their affiliates under such laws, including governmental fines, penalties, and other punishments, as well as potential liability to or cessation of services by the Solana Custodian. Any of the foregoing could result in losses
to the Shareholders or negatively affect the Trust’s ability to operate.
Spot Solana markets may be exposed to fraud and market manipulation.
The blockchain infrastructure could be used by certain market participants to exploit arbitrage opportunities through schemes such as front-running, spoofing, pump-and-dump and fraud across different
systems, platforms or geographic locations. As a result of reduced oversight, these schemes may be more prevalent in digital asset markets than in the general market for financial products.
The SEC has identified possible sources of fraud and manipulation in the digital asset market generally, including, among others (1) “wash trading”; (2) persons with a dominant position in digital
asset manipulating the digital asset’s pricing; (3) hacking of the digital asset’s peer-to-peer network and trading platforms; (4) malicious control of the digital asset network; (5) trading based on material, non-public information (for example,
plans of market participants to significantly increase or decrease their holdings in digital assets, new sources of demand for digital asset, etc.) or based on the dissemination of false and misleading information; (6) manipulative activity involving
purported “stablecoins,” including Tether; and (7) fraud and manipulation at digital asset trading platforms.
Over the past several years, a number of digital asset spot markets have been closed or faced issues due to fraud. In many of these instances, the customers of such digital asset spot markets were not
compensated or made whole for the partial or complete losses of their account balances in such digital asset trading platforms.
For example, in 2019, there were reports claiming that 80.95% of bitcoin trading volume on digital asset trading platforms was false or noneconomic in nature, with specific focus on unregulated
trading platforms located outside of the United States. Such reports alleged that certain overseas trading platforms have displayed suspicious trading activity suggestive of a variety of manipulative or fraudulent practices.
The potential consequences of a spot market’s failure or failure to prevent market manipulation could adversely affect the value of the Shares. Any market abuse, and a loss of investor confidence in
digital assets may adversely impact pricing trends in digital assets markets broadly, as well as an investment in Shares of the Trust.
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Spot SOL markets may be exposed to wash trading.
Spot markets on which SOL trades may be susceptible to wash trading. Wash trading occurs when offsetting trades are entered into for other than bona fide reasons, such as the desire to inflate
reported trading volumes. Wash trading may be motivated by non-economic reasons, such as a desire for increased visibility on popular websites that monitor markets for digital assets so as to improve their attractiveness to investors who look for
maximum liquidity, or it may be motivated by the ability to attract listing fees from token issuers who seek the most liquid and high-volume trading platforms on which to list their coins. Results of wash trading may include unexpected obstacles to
trade and erroneous investment decisions based on false information.
Even in the United States, and even on regulated venues there have been allegations of wash trading. Any actual or perceived false trading in the digital asset trading platform market, and any
other fraudulent or manipulative acts and practices, could adversely affect the value of SOL and/or negatively affect the market perception of SOL.
To the extent that wash trading either occurs or appears to occur in spot markets on which SOL trades, investors may develop negative perceptions about SOL and the digital assets industry more
broadly, which could adversely impact the price SOL and, therefore, the price of Shares. Wash trading also may place more legitimate digital asset trading platforms at a relative competitive disadvantage.
Spot SOL markets may be exposed to front-running.
Spot markets on which SOL trades may be susceptible to “front-running,” which refers to the process when someone uses technology or market advantage to get prior knowledge of upcoming transactions.
Front-running is a frequent activity on centralized as well as decentralized trading platforms. By using bots functioning on a millisecond-scale timeframe, bad actors are able to take advantage of the forthcoming price movement and make economic
gains at the cost of those who had introduced these transactions. The objective of a front runner is to buy a group of tokens at a low price and later sell them at a higher price while simultaneously exiting the position. Front-running happens via
manipulations of gas prices or timestamps, also known as slow matching. To extent that front-running occurs, it may result in investor frustration and concerns as to the price integrity of digital asset trading platforms and digital assets more
generally.
Political or economic crises may motivate large-scale sales of SOL, which could result in a reduction in the prices of SOL and adversely affect an
investment in the Shares.
As an alternative to fiat currencies that are backed by central governments, SOL is subject to supply and demand forces based upon the desirability of an alternative, decentralized means of buying
and selling goods and services, and it is unclear how such supply and demand will be impacted by geopolitical events. Nevertheless, political or economic crises may motivate large-scale acquisitions or sales of SOL, either globally or locally.
Large-scale sales of SOL would result in a reduction in its price and adversely affect an investment in the Shares.
Validators may suffer losses due to staking, or staking may prove unattractive to validators, which could make the Solana network less attractive.
Validation on the Solana network requires SOL to be transferred into smart contracts on the underlying blockchain networks not under the Trust’s or anyone
else’s control. If the Solana network source code or protocol fail to behave as expected, suffer cybersecurity attacks or hacks, experience security issues, or encounter other problems, such assets may be
irretrievably lost. The Solana network imposes three types
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of sanctions for validator misbehavior or inactivity, which would result in a portion of their staked SOL being destroyed or “burned”: penalties, slashing and inactivity leaks. A validator may face
penalties if it fails to take certain actions, such as providing a timely attestation to a block proposed by another validator. Under this scenario, a validator’s staked SOL could be burned in an amount equal to the reward to which it would have been
entitled for performing the actions. A more severe sanction (i.e., “slashing”) is imposed if a validator commits malicious acts related to the proposal or attestation of blocks with invalid transactions. Slashing can result in the validator having a
portion of its staked SOL immediately confiscated, withdrawn or burned by the network, resulting in losses to them. After this initial slashing, the validator is queued for forceful removal from the Solana network’s validator “pool,” and more of the
validator’s stake is burned over a period of approximately 36 days with the exact amount of SOL burned and time period determined by the network regardless of whether the validator makes any further slashable errors, at which point the validator is
automatically removed from the validator pool. To date, no slashing penalty has been assessed on the Solana network. Staked SOL may also be burned through a process known as an “inactivity leak,” which is triggered if the Solana network has gone too
long without finalizing a new block. For a new block to be successfully added to the blockchain, validators that account for at least two-thirds of all staked SOL must agree on the validity of a proposed block. This means that if validators
representing more than one-third of the total staked SOL are offline, no new blocks can be finalized. To prevent this, an inactivity leak causes the SOL staked by the inactive validators to gradually “bleed away” until these inactive validators
represent less than one-third of the total stake, thereby allowing the remaining active validators to finalize proposed blocks. This provides a further incentive for validators to remain online and continue performing validation activities. Within
the post-Merge Solana network, as part of the “activating” and “exiting” processes of staking, staked SOL will be inaccessible for a variable period of time determined by a range of factors, including network congestion, resulting in potential
inaccessibility during those periods. “Activation” is the funding of a validator to be included in the active set, thereby allowing the validator to participate in the Solana network’s proof-of-stake consensus protocol. “Exit” is the request to exit
from the active set and no longer participate in the Solana network’s proof-of-stake consensus protocol. As part of these “activating” and “exiting” processes of staking on the Solana network, any staked SOL will be inaccessible for a period of time.
The duration of activating and exiting periods are dependent on a range of factors, including network conditions. Un-staking generally takes up to three days to complete on the Solana network, however, depending on demand, un-staking can take between
hours, days or weeks to complete. Furthermore, the Solana network requires the payment of base fees and the practice of paying tips is common, and such fees can become significant as the amount and complexity of the transaction grows, depending on
the degree of network congestion and the price of SOL. Any cybersecurity attacks, security issues, hacks, penalties, slashing events, or other problems could damage validators’ willingness to participate in validation, discourage existing and future
validators from serving as such, and adversely impact the Solana network’s adoption or the price of SOL. Any disruption of validation on the Solana network could interfere with network operations and cause the Solana network to be less attractive to
users and application developers than competing blockchain networks, which could cause the price of SOL to decrease. The limited liquidity during the “activation” or “exiting” processes could dissuade potential validators from participating, which
could interfere with network operations or security and cause the Solana network to be less attractive to users and application developers than competing blockchain networks, which could cause the price of SOL to decrease.
Ownership of SOL is pseudonymous, and the supply of accessible SOL is unknown. Entities with substantial holdings in SOL may engage in large-scale sales or
distributions, either on nonmarket terms or in the ordinary course, which could result in a reduction in the price of SOL and adversely affect an investment in the Shares.
There is no registry showing which individuals or entities own SOL or the quantity of SOL that is owned by any particular person or entity. It is possible, and in fact, reasonably likely, that a
small group of early SOL adopters hold a significant proportion of the SOL that has been created to date. There are no
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regulations in place that would prevent a large holder of SOL from selling SOL it holds. To the extent such large holders of SOL engage in large-scale sales or distributions, either on nonmarket
terms or in the ordinary course, it could result in a reduction in the price of SOL and adversely affect an investment in the Shares.
A temporary or permanent blockchain “fork” could adversely affect an investment in the Shares.
The Solana network operates using open-source protocols, meaning that any user can download the software, modify it and then propose that the users and validators of SOL adopt the modification.
When a modification is introduced and a substantial majority of users and validators consent to the modification, the change is implemented and the network remains uninterrupted. However, if less than a substantial majority of users and validators
consent to the proposed modification, and the modification is not compatible with the software prior to its modification, the consequence would be what is known as a “hard fork” of the Solana network, with one group running the pre modified software
and the other running the modified software. The effect of such a fork would be the existence of two versions of SOL running in parallel on separate networks using separate blockchain ledgers, yet lacking interchangeability. A forthcoming “hard fork”
called “Alpenglow” was announced by developers of the Solana network in May of 2025 and is expected to reduce transaction finality time and enhance network security. Alpenglow and other future updates could be improperly implemented or not
implemented at all, potentially creating vulnerabilities, outages and disruptions in the Solana network, which would impact the price of SOL and the Shares.
Furthermore, a hard fork can introduce new security risks. For example, when Ethereum and Ethereum Classic split in July 2016, replay attacks, in which transactions from one network were
rebroadcast to nefarious effect on the other network, plagued trading platforms through at least October 2016. A trading platform announced in July 2016 that it had lost 40,000 ether tokens from the Ethereum Classic network, which was worth about
$100,000 at that time, as a result of replay attacks. Another possible result of a hard fork is an inherent decrease in the level of security. After a hard fork, it may become easier for an individual validator or validator pool to exceed 50% of the
processing power of the Solana network, thereby making the network more susceptible to attack.
A fork could also be introduced by an unintentional, unanticipated software flaw in the multiple versions of otherwise compatible software users run. Such a fork could adversely affect SOL’s
viability. It is possible, however, that a substantial number of users and validators could adopt an incompatible version of SOL while resisting community-led efforts to merge the two chains. This would result in a permanent fork, as in the case of
Ethereum and Classic Ethereum Classic, as detailed above.
A fork could also be introduced by an unintentional, unanticipated software flaw in the multiple versions of otherwise compatible software users run. Such a fork could adversely affect SOL’s
viability. It is possible, however, that a substantial number of validators could adopt an incompatible version of SOL while resisting community-led efforts to merge the two chains. This would result in a permanent fork, as in the case of Ethereum
and Ethereum Classic, as detailed above.
As another example of the effects of hard forks on digital assets, on September 15th, 2022, the Ethereum network successfully completed its Merge, moving from a Proof-of-Work (“PoW”) model to a
Proof-of-Stake (“PoS”) model. Ethereum PoW miners who disagreed with the new consensus mechanism forked the network, which resulted in the EthereumPoW network (“ETHW”). ETHW was driven by a small but vocal group of miners who wished to hold onto
revenue as Ethereum switched to PoS. The vast majority of token holder votes preferred the new PoS consensus method. There was no material impact on the Ethereum network as a result of the fork. All ether holders were airdropped ETHW tokens as a
result of the hard fork.
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However, not all liquidity providers were able to trade the new token and the ETHW token almost immediately lost most of its value.
In the event of a hard fork of the Solana network, the Sponsor will instruct the Trust to immediately and irrevocably disclaim all rights to the ether, cash or other assets or rights received as a
result of a hard fork or airdrop in respect of SOL (“IR Assets”) so created. As a result, shareholders will not receive the benefits of any hard fork or airdrop. SOL is the only digital asset that will be held by the Trust. In the event the Trust
seeks to change its treatment of Incidental Rights or IR Assets, an application would need to be filed with the SEC by the Exchange seeking approval to amend its listing rules.
In the event of a fork, the Sponsor will, as permitted by the terms of the Trust Agreement, determine which network it believes is generally accepted as the Solana network and should therefore be
considered the appropriate network, and the associated asset as SOL, for the Trust’s purposes. If the Trust modifies its policy on forks and airdrops, notice to Shareholders will be provided on the Trust’s website, in a prospectus supplement, through
a current report on Form 8-K and/or in the Trust’s annual or quarterly reports.
Risks Related to the Trust and the Shares.
Several factors may affect the Trust’s ability to achieve its investment objective on a consistent basis.
There is no guarantee that the Trust will meet its investment objective. Factors that may affect the Trust’s ability to meet its investment objective include:
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the development and maintenance of an active trading market for Shares;
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the continued participation of Authorized Participants;
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the ability of Authorized Participants to obtain and dispose of SOL in an efficient manner to effectuate creation and redemption orders;
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the liquidity of the SOL market and the Trust's staking activities;
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the functioning of the markets on which SOL trades;
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the compliance of the Trust’s portfolio holdings and staking activities with investment restrictions, policies or regulatory or tax law requirements; and
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the ability of the Trust to achieve or maintain an economically viable size.
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The Trust is subject to risks due to its concentration of investments in a single asset.
Unlike other funds that may invest in diversified assets, the Trust’s investment strategy is concentrated in a single asset: SOL. This concentration maximizes the degree of the Trust’s exposure to
a variety of market risks associated with SOL, including the rise or fall in its price, sometimes rapidly or unexpectedly. By concentrating its investment strategy solely in SOL, any losses suffered as a result of a decrease in the value of SOL can
be expected to reduce the value of an interest in the Trust and will not be offset by other gains if the Trust were to invest in underlying assets that were diversified.
Shareholders will not receive the benefits of any forks or “airdrops.”
The Solana blockchain may be subject to forks or airdrops that create new digital assets. See “Solana and the Solana Market—Solana and the Solana network—Forks and Airdrops.” Shareholders may not
receive the benefits of any forks, the Trust may not choose, or be able, to participate in an airdrop, and the timing of receiving any benefits from a fork, airdrop or similar event is uncertain. The Sponsor refers to the right
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to receive any such benefit as an “Incidental Right” and any such virtual currency acquired through an Incidental Right as “IR Assets.” If a hard fork, airdrop or similar event occurs in the Solana
blockchain, the Sponsor will instruct the Trust to immediately and irrevocably disclaim all rights to the IR Assets so created. SOL is the only digital asset that will be held by the Trust. In the event the Trust seeks to change its treatment of
Incidental Rights or IR Assets, an application would need to be filed with the SEC by the Exchange seeking approval to amend its listing rules.
Although the Sponsor is under no obligation to do so, an inability to realize the economic benefit of a hard fork or airdrop could adversely affect the value of the Shares. Investors who prefer to
have a greater degree of control over events such as forks, airdrops, and similar events, and any assets made available in connection with each, should consider investing in SOL directly rather than purchasing Shares.
The Trust is subject to management and operational risks from its Sponsor and service providers.
The Trust is subject to management risk because it relies on the Sponsor’s ability to achieve its investment objective. Shareholders will have very limited voting rights, which will limit their
ability to influence matters such as amendment of the Trust Agreement, change in the Trust’s basic investment policy, dissolution of the Trust, or the sale or distribution of the Trust’s assets.
The Trust also is subject to the risk of loss as a result of other services provided by the Sponsor and other service providers, including benchmark, custody, administrative, accounting, tax,
legal, custody, transfer agency and other services. Operational risk includes the possibility of loss caused by inadequate procedures and controls, human error and cyber attacks, disruptions and failures affecting, or by, a service provider. In
addition, the Sponsor may be required to indemnify its officers, directors and key employees with respect to their activities on behalf of the Trust and other accounts, if the need for indemnification arises. This potential indemnification could
cause the Sponsor’s assets to decrease. If the Sponsor’s sources of income are not sufficient to compensate for the indemnification, it could cease operations, which could in turn result in Trust losses and/or dissolution of the Trust.
In addition, the Trust’s service providers, including the Solana Custodian, act in similar capacities for a number of other digital asset ETPs. If those digital asset ETPs experience operational
challenges or regulatory problems that impact or implicate one or more of the Trust’s service providers, the Trust’s operations may be adversely impacted as a result. The Sponsor will monitor the services provided by the Trust’s service providers to
detect and identify any such potential issues with the service providers.
The Trust as well as the Sponsor and its service providers are vulnerable to the effects of public crises, which may arise in the future, which may
adversely affect the performance of the Trust’s investment in SOL and your investment in the Trust.
Pandemics and other public health crises may cause a curtailment of business activities which may potentially impact the ability of the Sponsor and its service providers to operate. Such events also
could adversely impact the Trust by causing operating delays and disruptions, market disruption and shutdowns (including as a result of government regulation and prevention measures). The COVID-19 pandemic, for example, had substantive effects on
social, economic and financial systems, including significant uncertainty and volatility in the financial market.
The Trust’s Prime Broker or Solana Custodian could become insolvent or become subject to a receivership or bankruptcy proceeding, which may result in a loss
of or delay in access to Trust assets.
In the event of an insolvency or bankruptcy of the Prime Broker (in the case of the Trading Balance) or the Solana Custodian (in the case of the Vault Balance) in the future, given that the
contractual protections and
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legal rights of customers with respect to digital assets held on their behalf by third parties are relatively untested in a bankruptcy of an entity such as the Solana Custodian or Prime Broker in
the virtual currency industry, there is a risk that customers’ assets—including the Trust’s assets—may be considered the property of the bankruptcy estate of the Prime Broker (in the case of the Trading Balance) or the Solana Custodian (in the case
of the Vault Balance), and customers—including the Trust—may be at risk of being treated as general unsecured creditors of such entities and subject to the risk of total loss or markdowns on value of such assets.
The Solana Custody Agreement contains an agreement by the parties to treat the SOL credited to the Trust’s Vault Balance as financial assets under Article 8 of the New York Uniform Commercial Code
(“Article 8”), in addition to stating that the Solana Custodian will serve as fiduciary and custodian on the Trust’s behalf. The Solana Custodian’s parent, Coinbase Global, has stated in its most recent public securities filings that in light of the
inclusion in its custody agreements of provisions relating to Article 8 it believes that a court would not treat custodied digital assets as part of its general estate in the event the Solana Custodian were to experience insolvency. However, due to
the novelty of digital asset custodial arrangements courts have not yet considered this type of treatment for custodied digital assets and it is not possible to predict with certainty how they would rule in such a scenario. If the Solana Custodian
became subject to insolvency proceedings and a court were to rule that the custodied SOL were part of the Solana Custodian’s general estate and not the property of the Trust, then the Trust would be treated as a general unsecured creditor in the
Solana Custodian’s insolvency proceedings and the Trust could be subject to the loss of all or a significant portion of its assets. Moreover, in the event of the bankruptcy of the Solana Custodian, an automatic stay could go into effect and
protracted litigation could be required in order to recover the assets held with the Solana Custodian, all of which could significantly and negatively impact the Trust’s operations and the value of the Shares.
There is a risk that the Trading Balance, in which the Trust’s SOL and cash is held in omnibus accounts by the Prime Broker (in the latter case, as described below in “Cybersecurity Risk Related to
Solana —Loss of a critical banking relationship for, or the failure of a bank used by, the Execution Agent could adversely impact the Trust’s ability to create or redeem Creation Baskets, or could cause losses to the Trust.”), could be considered
part of the Prime Broker’s bankruptcy estate in the event of the Prime Broker’s bankruptcy. The Solana Custody Agreement contains an Article 8 opt-in clause with respect to the Trust’s assets held in the Trading Balance. The Prime Broker is not
required to hold any of the SOL or cash in the Trust’s Trading Balance in segregation. Within the Trading Balance, the Solana Custody Agreement provides that the Trust does not have an identifiable claim to any particular SOL (and cash). Instead, the
Trust’s Trading Balance represents an entitlement to a pro rata share of the SOL (and cash) the Prime Broker has allocated to the omnibus wallets the Prime Broker holds, as well as the accounts in the Prime Broker’s name that the Prime Broker
maintains at Connected Trading Venues (which are typically held on an omnibus, rather than segregated, basis). If the Prime Broker suffers an insolvency event, there is a risk that the Trust’s assets held in the Trading Balance could be considered
part of the Prime Broker’s bankruptcy estate and the Trust could be treated as a general unsecured creditor of the Prime Broker, which could result in losses for the Trust and Shareholders. Moreover, in the event of the bankruptcy of the Prime
Broker, an automatic stay could go into effect and protracted litigation could be required in order to recover the assets held with the Prime Broker, all of which could significantly and negatively impact the Trust’s operations and the value of the
Shares. There are no policies that would limit the amount of SOL that can be held temporarily in the Trading Balance maintained by the Prime Broker.
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The Trust will not stake its SOL until the Staking Condition has been satisfied, any additional requirements are met, and the Trust has entered into written agreement(s) with
Staking Provider, which could harm the value of the Shares.
In seeking to achieve its investment objective, the Trust will hold SOL and will seek to stake substantially all of its SOL to earn staking rewards to the extent the Trust, in the Sponsor’s sole
discretion, can engage in staking without undue legal or regulatory risk, including without jeopardizing its status as a grantor trust for U.S. federal income tax purposes (the “Staking Condition”).
If the Trust engaging in staking activities were to jeopardize the Trust’s ongoing ability to satisfy the Staking Condition and related requirements or conditions in the discretion of the Sponsor,
or if the Trust engaging in staking activities raised concerns about the safety or liquidity of the Trust's SOL, the Trust may cease some or all of its staking activities. Staking on the Solana network involves delegating of SOL to validators and
carries risks discussed further below. Staked SOL may be subject to community-determined penalties for validator misbehavior, or slashing. If the Staking Provider causes the Trust’s staked SOL to be subject to such slashing losses, the Trust could
suffer losses of the staked SOL. Additionally, the staking process includes protocol-defined warm-up, activation and withdrawal periods, during which staked SOL is temporarily locked and inaccessible. These phases affect when SOL begins earning
rewards, participates in consensus and becomes available for transfer or redelegation.
Staking Provider will stake the Trust’s SOL as the node operator and will operate a validator to stake the Trust’s SOL. The Staking Provider will perform its staking services in collaboration
with the Solana Custodian, as the SOL will be staked directly from the Trust’s SOL account with the Solana Custodian. The Trust will maintain control of the SOL while it is staked because it will remain in the Trust’s account with the Solana
Custodian (i.e., it will be kept in a separate account for which the Trust is the beneficial and record owner and will not be commingled other parties' accounts with the Solana Custodian). The Trust will maintain the power to unstake its SOL. Each
Staking Provider will not have this capability. Staking will be a passive activity for the Trust, as it will not operate its staking program. The Trust’s role will be limited to evaluating and contracting with one or more Staking Providers and
instructing the Staking Provider on when to stake and/or unstake the Trust’s SOL.
The Trust will receive a portion of the staking rewards earned through staking activities in the form of additional SOL tokens. The remaining portion of the staking rewards will be retained by
the third party Staking Provider for providing and facilitating the staking activities. The expenses of staking the Trust’s SOL will be paid from the staking rewards generated by the staking program. The staking rewards earned by the Trust will
accrue to the Trust’s account with the Solana Custodian and will generally be staked in the same way as the Trust’s already staked SOL.
The Trust may seek an opinion of a tax advisor or a private letter ruling from the Internal Revenue Service that would allow it to utilize a credit facility or an alternative means of satisfying
redemption requests without un-staking the Trust’s SOL, but it will not take such actions in the absence of such an opinion or ruling.
The Trust’s risk management processes and policies may prove to not be adequate to prevent any loss of the Trust’s SOL.
The Sponsor will continue to monitor and evaluate the Trust’s risk management processes and policies and believes that the current risk management processes and procedures are reasonably designed
and effective. The Sponsor believes that the security procedures that the Sponsor and the Solana Custodian utilize, such as hardware redundancy, segregation and offline data storage (i.e., the maintenance of data on computers and/or storage media
that is not directly connected to or accessible from the internet and/or networked with
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other computers, also known as “cold storage”) protocols are reasonably designed to safeguard the Trust’s SOL from theft, loss, destruction or other issues relating to hackers and technological
attack. Despite the number of security procedures that the Sponsor and Solana Custodian employ, it is impossible to guarantee the prevention of any loss due to a security breach, software defect, act of God, pandemic or riot that may be borne by the
Trust. Notwithstanding the above, the Solana Custodian is responsible for its own gross negligence, willful misconduct or bad faith. In the event that the Trust’s risk management processes and policies prove to not be adequate to prevent any loss of
the Trust’s SOL and such loss is not covered by insurance or is otherwise recoverable, the value of the Shares will decrease as a result and investors would experience a decrease in the value of their investment.
The Trust’s Policy for managing the liquidity risks of staking may not fully prevent the Trust from experiencing liquidity challenges, especially in extreme
or stressed market conditions.
The Trust’s staking program involves the temporary loss of the ability to transfer or otherwise dispose of the Trust’s SOL. The Sponsor expects that under normal conditions, the Trust will generally regain complete
control over the Trust’s SOL in up to three days of instructing the Solana Custodian to unstake or "exit" the Trust’s staked SOL positions. However, there can be no guarantee that such process will result in the Trust regaining complete control of
its SOL in time to satisfy its current obligations. Accordingly, the Sponsor may consider a number of options to manage the liquidity of the Trust’s assets in times of stress, including a temporary extension of the settlement timeline for
redemption orders or a temporary suspension of redemption orders. The Sponsor may also rely on other means of managing liquidity in the future such as the use of a credit facility or an alternative liquidity arrangement (including a credit facility
with the Sponsor or its affiliates acting as lender) in its sole discretion.
The Sponsor has a Policy related to the management of the Trust’s staking-related liquidity risks. The Sponsor reviews this policy at least annually. The Trust may reduce the amount of its SOL that is staked as part
of managing its liquidity. The Trust will not utilize leverage, derivatives or similar instruments or transactions in seeking to meet its investment objective; however, the Trust may utilize a short term credit facility or an alternative liquidity
arrangement solely for the purposes of obtaining funds necessary to meet redemptions from the Trust. The Policy is designed to manage staking-related liquidity risks, but these risks cannot be fully eliminated, especially in extreme or stressed
market conditions or in the event that the Trust or its service providers experience operational disruptions. Accordingly, investors could still experience delays or limitations on redemptions if the Trust is unable to unstake the necessary amount
of SOL in time to satisfy its current obligations. The Policy is intended to, and is in line with, the listing rules of the Exchange.
The development and commercialization of the Trust is subject to competitive pressures and may be adversely affected by competition from competing products
and other investment vehicles focused on SOL or other digital assets.
The Trust and the Sponsor face competition with respect to the creation of competing products. The Sponsor’s competitors may have greater financial, technical and human resources than the Sponsor.
These competitors may also compete with the Sponsor in recruiting and retaining qualified personnel. Smaller or early-stage companies may also prove to be effective competitors, particularly through collaborative arrangements with large and
established companies. Accordingly, the Sponsor’s competitors may commercialize a product involving SOL more rapidly, effectively or for a lower fee than the Sponsor is able to, which could adversely affect the Sponsor’s competitive position, the
likelihood that the Trust will achieve initial market acceptance and the Sponsor’s ability to generate meaningful revenues from the Trust. For exchange-traded products similar to the Trust, there have been significant “first-mover” advantages in
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terms of asset gathering, trading volume and media coverage. In many cases, the first mover in an asset class has been able to maintain these advantages for extended periods.
Investors may invest in SOL through means other than the Shares, including through direct investments in SOL and other potential financial vehicles, possibly including securities backed by or
linked to SOL and digital asset financial vehicles similar to the Trust, or SOL futures-based products. Market and financial conditions, and other conditions beyond the Sponsor’s control, may make it more attractive to invest in other financial
vehicles or to invest in SOL directly, which could limit the market for, and reduce the liquidity of, the Shares. In addition, to the extent digital asset financial vehicles other than the Trust tracking the price of SOL are formed and represent a
significant proportion of the demand for SOL, large purchases or redemptions of the securities of these digital asset financial vehicles, or private funds holding SOL, could negatively affect the Benchmark, the Trust’s SOL holdings, the price of the
Shares, the net asset value of the Trust and the NAV.
If the Trust fails to achieve sufficient scale due to competition, the Sponsor may have difficulty raising sufficient revenue to cover the costs associated with launching and maintaining the Trust,
and such shortfalls could impact the Sponsor’s ability to properly invest in robust ongoing operations and controls of the Trust to minimize the risk of operating events, errors, or other forms of losses to the Shareholders. In addition, the Trust
may also fail to attract adequate liquidity in the secondary market due to such competition, resulting in a sub-standard number of Authorized Participants willing to make a market in the Shares, which in turn could result in a significant premium or
discount in the Shares for extended periods and the Trust’s failure to reflect the performance of the price of SOL.
In addition, the Trust will compete with direct investments in SOL, SOL futures-based products, other digital assets and other potential financial vehicles, possibly including securities backed by
or linked to digital assets and other investment vehicles that focus on other digital assets. Market and financial conditions, and other conditions beyond the Trust’s control, may make it more attractive to invest directly or in other vehicles, which
could adversely affect the performance of the Trust.
The value of the Shares may be influenced by a variety of factors unrelated to the value of SOL.
The value of the Shares may be influenced by a variety of factors unrelated to the price of SOL that may have an adverse effect on the price of the Shares. These factors include:
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The Trust could experience unanticipated problems or issues with respect to the mechanics of the Trust’s operations and the trading of the Shares, in particular due to the fact that the mechanisms and procedures governing the creation and
offering of the Shares and storage of SOL have been developed specifically for this product;
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The Trust could experience difficulties in operating and maintaining its technical infrastructure, including in connection with expansions or updates to such infrastructure, which are likely to be complex and could lead to unanticipated
delays, unforeseen expenses and security vulnerabilities;
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The Trust could experience unforeseen issues relating to the performance and effectiveness of the security procedures, such as algorithms, codes, passwords, multiple signature systems, encryption and telephone call-backs, used to protect
the Trust’s account with the Solana Custodian, or the security procedures may not protect against all errors, software flaws or other vulnerabilities in the Trust’s technical infrastructure, which could result in theft, loss or damage of its
assets; or
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If the Solana network introduces privacy enhancing features in the future, service providers may decide to terminate their relationships with the Trust due to concerns that the introduction of privacy
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enhancing features to the Solana network may increase the potential for SOL to be used to facilitate crime, exposing such service providers to potential reputational harm.
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If the Staking Condition remains unmet and the Trust is unable to stake its SOL, the Trust may experience adverse consequences.
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Staking involves the risk of loss of the Trust's SOL, which would adversely affect the value of the Shares.
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Liquidity challenges related to unstaking the Trust's SOL to meet redemption requests could result in certain liquidity risks to the Trust, including possible delays in the satisfaction of redemption requests.
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The uncertain legal and regulatory environment regarding staking, especially as it relates to the U.S. federal income tax consequences of staking in a grantor trust structure.
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If the Staking Condition is met, there is a possibility that the Trust's staking activities could result in potential tax liabilities for beneficial owners of Shares without receiving corresponding distributions from the Trust in
connection with the Trust's staking activities.
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Any of these factors could affect the value of the Shares, either directly or indirectly through their effect on the Trust’s assets.
The NAV may not always correspond to the market price of the Shares.
The NAV of the Trust may not always correspond to the market price of its Shares. Shareholders should be aware that the public trading price per Share may be different from the NAV for a number of
reasons, including price volatility, trading activity, normal trading hours for the Trust, the calculation methodology of the NAV, demand or supply for Shares of the Trust in excess of an Authorized Participant’s ability to create or redeem Shares
and/or the closing of SOL trading platforms due to fraud, failure, security breaches or otherwise, and the fact that supply and demand forces at work in the secondary trading market for Shares are related, but not identical, to the supply and demand
forces influencing the market price of SOL. Additionally, SOL is traded on trading platform markets and over-the-counter 24-hours a day and seven days a week, and the value of the Shares may therefore change on days and at times when an investor is
not able to buy or sell Shares.
The Trust and the Sponsor believe that slippage in trading (i.e., the difference between the expected price and the price at which the trade is executed) is not necessarily more pronounced in the
trading of digital assets as compared to other asset classes or in the trading of SOL as compared to other digital assets. To monitor the trading of SOL and other digital assets, the Execution Agent requests quotes from liquidity providers to trade
SOL or other digital asset as a spread off a corresponding index. While trading slippage is not expected to have a material impact on the Trust over the long term, trading slippage may from time to time be material on a given day. The Trust does not
currently intend to take specific steps to limit the impact of trading slippage.
An Authorized Participant may be able to create or redeem a Creation Basket at a discount or a premium to the public trading price per Share. To the extent creations or redemptions take place in
kind in the future, the Trust’s operations will therefore not be directly impacted by any discount or premium in the market price of its Shares.
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Shareholders may be adversely affected by an overstatement or understatement of the NAV calculation of the Trust due to the valuation methodology employed
on the date of the NAV calculation.
If the Benchmark is not available or the Sponsor determines, in its sole discretion, that the Benchmark should not be used, the Trust’s SOL investments may be valued using techniques other than
reliance on the price established by the Benchmark. The value established by using the Benchmark may be different from what would be produced through the use of another methodology. SOL valued using techniques other than those employed by the
Benchmark, including SOL investments that are “fair valued,” may differ from the value established by the Benchmark.
Benchmark correlation risk.
The Trust expects to outperform the Benchmark before taking its expenses and liabilities into account due to its plans to receive SOL staking rewards but may not achieve the desired correlation to
the Benchmark and thus may not achieve its investment objective. The difference in performance between the Trust and the Benchmark may be due to factors such as fees, transaction costs, redemptions of, and subscriptions for, Shares, differences in
the timing of the addition or removal of constituent trading platforms underlying the Benchmark, staking rewards earned by the Trust, pricing differences or the cost to the Trust of complying with various new or existing regulatory requirements.
To the extent the Trust makes use of cash creations and redemptions, it may adversely affect arbitrage transactions by Authorized Participants intended to
keep the price of the Shares closely linked to the price of SOL and, as a result, the price of the Shares may fall or otherwise diverge from NAV.
The use of cash creations and redemptions, as opposed to in-kind creations and redemptions, could cause delays in trade execution due to potential operational issues arising from implementing a
cash creation and redemption model, which involves greater operational steps (and therefore execution risk) than the creation and redemption model. Such delays could cause the execution price associated with such trades to materially deviate from
the Benchmark price used to determine the NAV. Even though the Authorized Participant is responsible for the dollar cost of such difference in prices, Authorized Participants could default on their obligations to the Trust, or such potential risks
and costs could lead to Authorized Participants, who would otherwise be willing to purchase or redeem Baskets to take advantage of any arbitrage opportunity arising from discrepancies between the price of the Shares and the price of the underlying
SOL, to elect to not participate in the Trust’s Share creation and redemption processes. This may adversely affect the arbitrage mechanism intended to keep the price of the Shares closely linked to the price of SOL, and as a result, the price of
the Shares may fall or otherwise diverge from NAV. If the arbitrage mechanism is not effective, purchases or sales of Shares on the secondary market could occur at a premium or discount to NAV, which could harm Shareholders by causing them buy
Shares at a price higher than the value of the underlying SOL held by the Trust or sell Shares at a price lower than the value of the underlying SOL held by the Trust, causing Shareholders to suffer losses. Further, the Trust may not be able to
successfully implement in-kind creation and redemption transactions, which could put the Trust at a disadvantage compared to other digital asset ETPs that are able to implement in-kind creations and redemptions.
SOL buying and selling activity associated with the creation and redemption of Creation Baskets, or withdrawal from participation by an Authorized
Participant, may adversely affect an investment in the Shares of the Trust.
The Trust’s or the Execution Agent’s purchase of SOL in connection with Creation Basket purchase orders may cause the price of SOL to increase, which will result in higher prices for the Shares.
Increases in SOL prices may also occur as a result of SOL purchases by other market participants who attempt to benefit
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from an increase in the market price of SOL when Creation Baskets are issued. The market price of SOL may therefore decline immediately after Creation Baskets are issued.
Selling activity associated with sales of SOL by the Trust or the Execution Agent in connection with redemption orders may decrease the SOL prices, which will result in lower prices for the Shares.
Decreases in SOL prices may also occur as a result of selling activity by other market participants.
In addition to the effect that purchases and sales of SOL by the Trust or the Execution Agent may have on the price of SOL, sales and purchases of SOL by similar investment vehicles (if developed)
could impact the price of SOL. If the price of SOL declines, the trading price of the Shares will generally also decline.
Authorized Participant risk.
The Trust has a limited number of financial institutions that may act as Authorized Participants and engage in creation or redemption transactions directly with the Trust, and none of those
Authorized Participants is obligated to engage in creation and/or redemption transactions. In the event that one or more Authorized Participants that have substantial interests in the Trust’s Shares exit the business or are unable to proceed with
participation in the purchase (creation) or sale (redemption) of the Trust’s Shares, and no other Authorized Participant is able to step forward to create or redeem Creation Baskets, this may result in a significantly diminished trading market for
the Shares, and the Shares may be more likely to trade at a premium or discount to the Trust’s NAV and to face trading halts and/or delisting. Further, the Trust’s Authorized Participants may act as authorized participants for a number of other
digital asset ETPs. If those digital asset ETPs experience operational challenges or regulatory problems that impact or implicate one or more of the Trust’s Authorized Participants, the Trust may be adversely impacted. In addition, if one or more of
the Trust’s Authorized Participants discontinue serving as an Authorized Participant with respect to the Trust but not to other digital asset ETPs, the liquidity of Shares and the value of an investment in the Shares may be adversely affected.
Finally, in periods of heightened SOL price volatility, the Authorized Participants may not be able to effectively make markets in several impacted digital asset ETPs at once, which could lead to larger bid-ask spreads or Share price premiums and
discounts. The Sponsor will monitor the activity and operations of the Trust’s Authorized Participants to identify any such potential issues.
The inability of Authorized Participants to hedge their SOL exposure may adversely affect the liquidity of Shares and the value of an investment in the
Shares.
Authorized Participants will generally want to hedge their exposure in connection with Creation Basket creation and redemption orders. To the extent Authorized Participants are unable to hedge
their exposure due to market conditions (e.g., insufficient SOL liquidity in the market, inability to locate an appropriate hedge counterparty, extreme volatility in the price of SOL, etc.), such conditions may make it difficult to create or redeem
Creation Baskets or cause them to not create or redeem Creation Baskets. In addition, the hedging mechanisms employed by Authorized Participants to hedge their exposure to SOL may not function as intended, which may make it more difficult for them to
enter into such transactions. Such events could negatively impact the market price of the Trust and the spread at which the Trust trades on the open market.
The market infrastructure of the SOL spot market could result in the absence of active Authorized Participants able to support the trading activity of the
Trust.
SOL is extremely volatile, and concerns exist about the stability and reliability of many trading platforms where SOL trades. In a highly volatile market, or if one or more trading platforms
supporting the SOL market face an issue, it could be extremely challenging for any Authorized Participants to provide
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continuous liquidity in the Shares. There can be no guarantee that the Sponsor will be able to find an Authorized Participant to actively and continuously support the Trust.
SOL spot trading platforms are not subject to the same regulatory oversight as traditional equity exchanges, which could negatively impact the ability of
Authorized Participants to implement arbitrage mechanisms.
The trading for spot SOL occurs on multiple domestic and foreign trading platforms that have various levels and types of regulation, but are not regulated in the same manner as traditional stock
and bond trading platforms. If these trading platforms do not operate smoothly or face technical, security or regulatory issues, that could impact the ability of Authorized Participants to make markets in the Shares. In such an event, trading in the
Shares could occur at a material premium or discount to the NAV.
In addition, trading on these trading platforms may be halted or disrupted due to regulatory actions, operational problems at the trading platforms or third parties, cybersecurity incidents or acts
of fraud or misconduct, among others. In the event a trading platform experiences such a disruption, the Trust may be impacted and the value of the Shares may decline. Further, the price and availability of SOL on these trading platforms may differ,
and if the Trust transacts at one trading platform at a time where the price and/or availability of SOL is materially worse than that of another trading platform, the value of Shares may be impacted. Operational problems or failures by SOL trading
platforms and fluctuations in SOL prices may reduce confidence in these platforms or in SOL generally, which could adversely affect the price of SOL and therefore adversely affect an investment in the Shares.
Only Authorized Participants may transact in Creation Baskets.
The Trust will process all creations and redemptions of Shares in transactions with financial firms that are authorized to do so (known as “Authorized Participants”). Shareholders that are not
Authorized Participants or who are unable to transact in Creation Baskets through Authorized Participants may only purchase or sell their Shares in secondary trading markets, and the conditions associated with trading in secondary markets may
adversely affect Shareholders’ investment in the Shares. Although shares of the Trust are listed for trading on the Exchange, there can be no assurance that an active trading market for such shares will develop or be maintained. Secondary market
trading in Shares may be halted by the Exchange because of market conditions or for other reasons. Shares of the Trust, similar to shares of other issuers listed on a stock exchange, may be sold short and are therefore subject to the risk of
increased volatility and price decreases associated with being sold short. Shares trade on the Exchange at prices at, above or below the most recent NAV. The NAV is calculated at the end of each Business Day and fluctuates with changes in the market
value of the Trust’s SOL. The trading price of the Shares fluctuates continuously throughout trading hours based on both market supply of and demand for Shares and the underlying value of the Trust’s SOL or the Trust’s NAV. As a result, the trading
prices of Shares may deviate significantly from NAV during periods of market volatility. Any of these factors, among others, may lead to the Shares trading at a premium or discount to NAV. While the creation/redemption feature is designed to make it
more likely that Shares normally will trade on the Exchange at prices close to the next calculated NAV, market prices are not expected to correlate exactly with the Trust’s NAV due to timing reasons, supply and demand imbalances and other factors. In
addition, disruptions to creations and redemptions, including disruptions at Authorized Participants, or other market participants, and during periods of significant market volatility, may result in trading prices for Shares that differ significantly
from its NAV. Authorized Participants may be less willing to create or redeem Shares if there is a lack of an active market for such Shares or its underlying investments, which may contribute to the Shares trading at a premium or discount to NAV.
Buying or selling Shares on the Exchange involves two types of costs that apply to all securities transactions. When buying or selling Shares through a broker, Shareholders will likely incur a brokerage commission and other charges. In addition,
Shareholders may incur the cost of the “spread”; that is, the
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difference between what investors are willing to pay for Shares (the “bid” price) and the price at which they are willing to sell Shares (the “ask” price). The spread, which varies over time for
Shares based on trading volume and market liquidity, is generally narrower if the Trust has more trading volume and market liquidity and wider if the Trust has less trading volume and market liquidity. In addition, increased market volatility may
cause wider spreads. There may also be regulatory and other charges that are incurred as a result of trading activity. Because of the costs inherent in buying or selling Shares, frequent trading may detract significantly from investment results and
an investment in Shares may not be advisable for investors who anticipate regularly making small investments through a brokerage account.
Solana Counterparty risk.
There can be no guarantee that the Execution Agent will be able to find Solana Counterparties to actively and continuously provide SOL liquidity to the Trust. Because the Solana Counterparties are
not contractually obligated to provide SOL liquidity to the Trust, if the Trust is unable to find sufficient sources of SOL liquidity, the Execution Agent may not be able to purchase or sell SOL on behalf of the Trust at prices and at times that will
enable the Trust to track the Benchmark. If the Execution Agent is unable to transact in SOL on the Trust’s behalf on a timely and cost-efficient basis, it could adversely affect the price of SOL and therefore adversely affect an investment in the
Shares. To the extent that the unavailability of SOL liquidity results in a diminished trading market for the Shares, the Shares may be more likely to trade at a premium or discount to the Trust’s NAV and to face trading halts and/or delisting.
Further, if one or more Solana Counterparties or trading platforms or venues supporting the SOL market are unwilling or unable to provide liquidity to the Trust, it could be challenging for any Authorized Participants to provide continuous liquidity
in the Shares.
Shareholders may be adversely affected by creation or redemption orders that are subject to postponement, suspension or rejection under certain
circumstances.
The Trust may, in its discretion, suspend the right of creation or redemption or may postpone the purchase or redemption settlement date, for (1) any period during which the Exchange is closed
other than customary weekend or holiday closings, or trading on the Exchange is suspended or restricted, (2) any period during which an emergency exists as a result of which the fulfillment of a purchase order or the redemption distribution is not
reasonably practicable, (3) such other period as the Sponsor determines to be necessary for the protection of the Trust or its Shareholders (for example, where acceptance of the total deposit required to create each Creation Basket would have certain
adverse tax consequences to the Trust or its Shareholders), or (4) as agreed upon between the Sponsor and Authorized Participant. An emergency could include situations where the Trust is unable to transact in SOL or where the Trust is unable to value
its SOL holdings. Such a situation may arise when trading of SOL is suspended on one or more of the digital asset trading platforms that are included in the Benchmark (for example, as a result of a significant technical failure, power outage or
network error) or the Trust is unable to access the SOL in the Trust’s SOL custody account at the Solana Custodian due to technical or operating issues at the Trust or the Solana Custodian. Because the Trust’s SOL transactions are expected to be
effected by the Execution Agent over-the-counter, it is unlikely that the Trust’s SOL transactions would be directly impacted by a trading halt on one or more digital asset trading platforms. However, such disruptions may have an effect on overall
SOL liquidity or cause price spreads of SOL to widen.
In addition, the Trust may reject a redemption order if the order is not in proper form as described in the authorized participant agreement by and among the Trust, the Sponsor and the Authorized
Participants (the “Authorized Participant Agreement”) or if the fulfillment of the order might be unlawful. Any such postponement, suspension or rejection could adversely affect a redeeming Authorized Participant. Suspension of creation privileges
may adversely impact how the Shares are traded and arbitraged on the
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secondary market, which could cause them to trade at levels materially different (premiums and discounts) from the fair value of their underlying holdings.
Due to the time involved in “exiting” the staking process, there is a risk that the Trust could become unable to timely meet excessive redemption requests
in amounts that are greater than the portion of the Trust’s SOL that remains unstaked, leading to temporary delays in settlement and, in extreme scenarios, the temporary unavailability of the Trust’s redemption program. Moreover, any staked SOL which
must be unstaked in order to fulfill a redemption (to the extent such redemption cannot be fulfilled utilizing the portion of the Trust's SOL that has not been staked, or through another mechanism to manage liquidity in connection with redemption
orders in respect of which the Trust has received an opinion of a tax advisor or a tax ruling) will be unstaked only after the redemption request is approved by the Trust, the Sponsor executes an unstake or withdrawal transaction through the Solana
Custodian, and such transaction is processed by the Solana network. The Staking Provider will not be able to transfer unstaked SOL or staking rewards to another address on the Solana network. The Exchange on which the Shares are listed may halt
trading in the Trust’s Shares, which would adversely impact a Shareholder’s ability to sell Shares.
The Trust’s Shares are listed for trading on the Exchange under the ticker symbol QSOL. Trading in Shares may be halted due to market conditions or, in light of the Exchange rules and procedures,
for reasons that, in the view of the Exchange, make trading in Shares inadvisable. In addition, trading is subject to trading halts caused by extraordinary market volatility pursuant to “circuit breaker” rules that require trading to be halted for a
specified period based on a specified market decline. Additionally, there can be no assurance that the requirements necessary to maintain the listing of the Trust’s Shares will continue to be met or will remain unchanged.
The lack of active trading markets for the Shares of the Trust may result in losses on Shareholders’ investments at the time of disposition of Shares.
Although Shares of the Trust are expected to be publicly listed and traded on an exchange, there can be no guarantee that an active trading market for the Trust will develop or be maintained. If
Shareholders need to sell their Shares at a time when no active market for them exists, the price Shareholders receive for their Shares, assuming that Shareholders are able to sell them, will likely be lower than the price that Shareholders would
receive if an active market did exist and, accordingly, a Shareholder may suffer losses.
Shareholders could incur a tax liability without an associated distribution of the Trust.
In the normal course of business, Shareholders could incur a taxable gain as a result of the sale of SOL (including sales of SOL to pay the Sponsor Fee and other Trust expenses), which gain does
not correspond to a distribution to Shareholders (so-called “phantom income”). Any tax liability could adversely impact an investment in the Shares and may require Shareholders to prepare and file tax returns. In that event, Shareholders may be
subject to tax on any realized capital gain resulting from their pro-rata share of the SOL sold by the Trust even though there is not a corresponding distribution from the Trust. See “U.S. Federal Income Tax Consequences—Taxation of U.S.
Shareholders” and “U.S. Federal Income Tax Consequences—Taxation of the Trust.”
The amount of SOL represented by the Shares will decline over time.
The amount of SOL represented by the Shares will be reduced during the life of the Trust each time the Trust accrues the Sponsor Fee, and to pay for any extraordinary expenses. This dynamic will
occur irrespective of whether the value of the Trust’s assets, or the trading price of the Shares, rises or falls. The
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Trust's staking activities may have the opposite effect on the Trust's assets, subject to the Staking Condition being satisfied and the staking program operating successfully.
Each outstanding Share represents a fractional, undivided interest in the SOL held by the Trust. The Trust transfers SOL to pay for the Sponsor Fee, and to pay for any extraordinary expenses,
including, but not limited to, taxes and governmental charges, any applicable brokerage commissions, financing fees, Solana network fees and similar transaction fees, expenses and costs of any extraordinary services performed by the Sponsor (or any
other service provider) on behalf of the Trust to protect the Trust or the interests of Shareholders (including, for example, in connection with any fork of the Solana blockchain), any indemnification of the Sponsor, Cash Custodian, Solana
Custodian, Staking Provider, Administrator or other agents, service providers or counterparties of the Trust and extraordinary legal fees and expenses, including any legal fees and expenses incurred in connection with litigation, regulatory
enforcement or investigation matters. Therefore, the amount of SOL represented by each Share will gradually decline over time. This is also true with respect to Shares that are issued in exchange for additional deposits of SOL or cash used to
acquire SOL over time, as the amount of SOL required to create Shares proportionally reflects the amount of SOL represented by the Shares outstanding at the time of such Share issuance. Assuming a constant SOL price, the trading price of the Shares
is expected to gradually decline relative to the price of SOL at the rate of the Sponsor Fee and other expenses.
Any errors or changes in calculations used to value the Trust’s SOL holdings and SOL holdings per Share may have an adverse effect on the value of the
Shares.
The value of Trust’s SOL holdings is typically determined on a daily basis as of 4:00 p.m. ET on each Business Day. This determination is made utilizing data from the operations of the Trust,
calculated as of 4:00 p.m. ET on such day. In the event that the value of the Trust’s SOL holdings or SOL holdings per Share is incorrectly calculated, the Sponsor and the Administrator will not be liable for any error and such misreporting of
valuation data could adversely affect the value of the Shares.
The value of the Shares will be adversely affected if the Trust is required to indemnify the Sponsor, the Trustee, the Transfer Agent, the Solana
Custodian, Staking Provider or the Cash Custodian.
Under the Trust Agreement, the Trustee and the Sponsor will have a right to be indemnified by the Trust for certain liabilities or expenses that it incurs without gross negligence, bad faith or
willful misconduct on its part. The Trust has also agreed to indemnify the Transfer Agent, Solana Custodian, Staking Provider and Cash Custodian under their respective agreements with the Trust for certain liabilities or expenses that such party
incurs, subject to certain qualifications. Therefore, the Trustee, Sponsor, Transfer Agent, the Solana Custodian, Staking Provider or the Cash Custodian may require that the assets of the Trust be sold in order to cover losses or liability suffered
by it. Any sale of that kind would reduce the SOL holdings of the Trust and the value of the Shares.
The Sponsor and its affiliates are subject to conflicts of interest that could adversely affect an investment in the Trust.
The Sponsor and its affiliates and their respective officers, directors and employees and other related parties engage in a broad spectrum of activities and may expand the range of services that
they provide over time. The Sponsor and its related parties will generally not be restricted in the scope of their business or in the performance of any such services (whether now offered or undertaken in the future), even if such activities could
give rise to conflicts of interest, and whether or not such conflicts are described herein. In the ordinary course of their business activities, the Sponsor and its related parties may engage in activities where the interests of the Sponsor and its
related parties or the interests of their clients conflict with the interests of the Trust. Certain employees of the Sponsor also have responsibilities relating to the business of one or
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more related parties. These employees are not restricted in the amount of time that may be allocated to the business activities of the Sponsor’s related parties, and the allocation of such
employees’ time between the Sponsor and its related parties may change over time.
The Sponsor and its related parties are responsible for managing other accounts in addition to the services that they provide to the Trust, including other accounts of the Sponsor or its
affiliates. Other accounts may include, without limitation, private or SEC-registered funds, separately managed accounts, offshore funds or accounts, or investments owned by the Sponsor or its affiliates. Management of other accounts in addition to
services provided to the Trust can present certain conflicts of interest. The other accounts might have similar or different investment objectives or strategies as the Trust, or otherwise hold, purchase or sell investments that are eligible to be
held, purchased or sold by the Trust, or may take positions that are opposite in direction from those taken by the Trust.
The Sponsor may devote unequal time and attention to the management of different accounts. As a result, the Sponsor may not be able to fulfill its obligations to the Trust as might be the case if
it were to devote substantially more attention to the management of a single account. The effects of this potential conflict may be more pronounced where accounts overseen by the Sponsor have different investment strategies.
A conflict of interest arises where the financial or other benefits available to the Sponsor or its related parties differ among the accounts that it manages. Where the structure of the Sponsor’s
or its related party’s fee differs among accounts (such as where certain accounts pay higher management fees or a performance or incentive fee), the Sponsor might be motivated to help certain accounts over others. In addition, the Sponsor might be
motivated to favor accounts in which it has an interest and/or its related parties have interests. Similarly, the desire to maintain or raise assets under management or to enhance the Sponsor’s or its related parties’ performance record or to derive
other rewards, financial or otherwise, could influence the Sponsor to give preferential treatment to those accounts that could most significantly benefit the Sponsor.
The Trust’s service providers (including its Solana Custodian, Administrator, auditor and legal counsel) may provide services to other pooled investment vehicles with similar investment strategies
and objectives and, accordingly, may have conflicts of interest. The Trust’s Sponsor and other service providers and their principals, employees or affiliates may invest or trade in digital assets for their own accounts, which activities may conflict
or compete with the Trust.
The Sponsor or its related parties may purchase Shares from the Trust from time to time, and may hold a material position in the Trust. The Trust will not receive any of the proceeds from the
resale by the Sponsor or its affiliates of these Shares, and the sale of such Shares may impact the price at which you may be able to sell your Shares. The Sponsor and its related parties reserve the right, subject to compliance with applicable law,
to sell into the market or redeem in Creation Baskets through an Authorized Participant at any time some or all of the Shares of the Trust acquired for their own accounts. The Sponsor or its related parties face conflicting interests in determining
whether, when and in what amount to sell or redeem Shares of the Trust. The Sponsor and its related parties are under no obligation to consider the effect of redemptions on the Trust and other Shareholders in deciding whether to sell or redeem their
Shares.
The Sponsor is responsible for selecting and engaging the Trust’s service providers, including the Benchmark Provider. To the extent that the Sponsor has other commercial arrangements with the
service providers, the Sponsor may face conflicts of interest with respect to its oversight and supervision of the service providers. Further, to the extent that the Sponsor has investments in SOL and/or in Shares, and due to the fact that the
Sponsor Fee is payable based on the value of the Shares, the Sponsor may face potential conflicts of interest with respect to the Benchmark Provider’s valuation of Shares.
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Investment vehicles advised or managed by affiliates of the Sponsor hold a minority interest in Coinbase Global, the parent of Coinbase Inc., which serves
as the Trust’s Prime Broker and operates one of the digital asset trading platforms included in the Benchmark price and is the parent of the Solana Custodian.
Investment vehicles advised or managed by affiliates of the Sponsor own shares in many public companies listed in the United States, including Coinbase Global, the parent of Coinbase Inc. which
operates the Coinbase trading platform and serves as the Trust’s Prime Broker. The Trust values its digital assets by reference to the Benchmark price. Coinbase is one of the digital asset trading platforms included in the Benchmark.
Although neither the Sponsor nor any affiliates of the Sponsor nor any investment vehicles managed or advised by any of them exercise control over Coinbase, it is possible that positions of
investment vehicles managed by affiliates of the Sponsor in Coinbase may present risks to Shareholders to the extent affiliates of the Sponsor cause the Sponsor to favor Coinbase’s interests over the interests of the Trust or its Shareholders with
respect to, for example, fees charged, and the quality of service provided by Coinbase as Prime Broker. Similarly, investors could have concerns that the Sponsor or affiliates of the Sponsor could influence market data provided by Coinbase in a way
that benefits the Sponsor, for example by artificially inflating the values of SOL in order to increase the Sponsor’s fees. This could make the Trust’s Shares less attractive to investors than the shares of similar vehicles that do not present these
concerns, adversely affect investor sentiment about the Trust and negatively affect Share trading prices.
Coinbase Global is also the parent company of the Solana Custodian. The Solana Custodian serves as a fiduciary and custodian on the Trust’s behalf, and is responsible for safeguarding digital
assets held by the Trust, and holding the private keys that provide access to the Trust’s digital wallets and vaults. The positions of investment vehicles managed by affiliates of the Sponsor in the parent company of the Solana Custodian may present
risks to Shareholders to the extent affiliates of the Sponsor cause the Sponsor to favor the Solana Custodian’s interests over the interests of the Trust or its Shareholders with respect to, for example, fees charged, and the quality of service
provided by the Solana Custodian. Similarly, it is possible that investors could have concerns that the interests owned by investment vehicles managed by affiliates of the Sponsor in Coinbase could cause it to refrain from taking actions that are in
the best interests of the Trust but that could harm the Solana Custodian. This could make the Trust’s Shares less attractive to investors than the shares of similar vehicles that do not present these concerns, adversely affect investor sentiment
about the Trust and negatively affect Share trading prices.
There is no guarantee that every employee, officer, director or similar person associated with the Sponsor, the Execution Agent or their affiliates will
comply with the policies, duties and training and refrain from engaging in insider trading in violation of their duties to the Trust, the Sponsor or the Execution Agent.
While the Sponsor has adopted and implemented policies and will adopt standard operating practices requiring that certain applicable personnel pre-clear personal trading activity in which SOL is
the referenced asset, there is no way to guarantee that every employee, officer, director, or similar person associated the Sponsor, the Execution Agent or their affiliates will comply at all times with such policies, duties and training and refrain
from engaging in insider trading in violation of their duties to the Trust, the Sponsor or the Execution Agent. This risk is present in traditional financial markets and is not unique to SOL. If such employees or others affiliated with the Trust,
Sponsor, Execution Agent, or affiliates respectively do engage in illegal conduct or conduct which fails to meet applicable regulatory standards, the Trust, Sponsor, Execution Agent, or relevant affiliate respectively could be the target of civil or
criminal fines, penalties, punishments, or other regulatory or other sanctions or lawsuits or could be the target of an investigation, whether directly or indirectly, such as on a failure to diligently supervise theory. Any of these outcomes could
cause the Trust and Shareholders to suffer harm.
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The Sponsor, the Execution Agent and their affiliates may also participate in transactions related to SOL, either for their own account (subject to certain internal employee trading operating
practices) or for the account of other clients, and such transactions may occur prior to, during, or after the commencement of this offering. Such transactions may not serve to benefit the Shareholders of the Trust and may have a positive or negative
effect on the value of the SOL held by the Trust and, consequently, on the market value of SOL.
Limited recourse.
The Solana Custodian has limited liability for any loss, claim, or damage to the Trust, impairing the ability of the Trust to recover losses relating to its SOL and any recovery may be limited,
except to the extent that such loss, claim or damage directly resulted from the negligence, bad faith, willful misconduct or fraud of the Solana Custodian. In addition, the Solana Custodian is generally not liable for any loss caused, directly or
indirectly, by the failure of the Trust to provide true, correct and complete information to the Solana Custodian, or a force majeure event. Furthermore, the Solana Custodian is generally not liable for a loss caused, directly or indirectly, by any
failure or delay to act by any service provider to the Solana Custodian or any system failure in respect of a third party’s automated system that prevents the Solana Custodian from fulfilling its obligations.
Under the Trust Agreement, the Trustee and the Sponsor will not be liable for any liability or expense incurred absent fraud, gross negligence, bad faith or willful misconduct on the part of the
Trustee or the Sponsor or breach by the Sponsor of the Trust Agreement, as the case may be. As a result, the recourse of the Trust or the Shareholder to Trustee or the Sponsor may be limited.
Risks Related to the Benchmark.
The Benchmark has a limited history.
The Benchmark has a limited history. A longer history of actual performance through various economic and market conditions would provide greater and more reliable information for an investor to
assess the Benchmark’s performance. The Benchmark Provider has substantial discretion at any time to change the methodology used to calculate the Benchmark, including the spot markets that contribute prices to the Trust’s NAV. The Benchmark Provider
does not have any obligation to take the needs of the Trust, the Trust’s Shareholders, or anyone else into consideration in connection with such changes. There is no guarantee that the methodology currently used in calculating the Benchmark will
appropriately track the price of SOL in the future, and the Benchmark could be calculated now or in the future in a way that adversely affects an investment in the Trust.
The Benchmark Pricing Sources used by the Benchmark are digital asset spot markets that facilitate the buying and selling of SOL and other digital assets. Although many Benchmark Pricing Sources
refer to themselves as “exchanges,” they are not registered with, or supervised by, the SEC or CFTC and do not meet the regulatory standards of a national securities exchange or designated contract market. For these reasons, among others, purchases
and sales of SOL may be subject to temporary distortions or other disruptions due to various factors, including the lack of liquidity in the markets and government regulation and intervention. These circumstances could affect the price of SOL used in
Benchmark calculations and, therefore, could affect the SOL price as reflected by the Benchmark.
The Benchmark is based on various inputs which include price data from various third-party SOL spot markets. The Benchmark Provider does not guarantee the validity of any of these inputs, which may
be subject to technological error, manipulative activity, or fraudulent reporting from their initial source.
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Right to change the Benchmark.
The Sponsor, in its sole discretion, may cause the Trust to utilize an index or standard other than the Benchmark (an “Alternative Benchmark”) at any time, with at least 60 days’ prior notice to
the Shareholders (where possible). The Sponsor may utilize an Alternative Benchmark for a variety of reasons, including, without limitation, if investment conditions change such that the Sponsor believes that an Alternative Benchmark better reflects
a fair value price for SOL, the Sponsor has concerns regarding the Benchmark Provider’s ability to continue to publish the Benchmark, or the Sponsor otherwise believes that the use of an Alternative Benchmark would be in the best interest of the
Trust. The Sponsor, however, is under no obligation whatsoever to make such changes in any circumstance. In the event that the Sponsor intends to establish the Trust’s NAV by reference to an Alternative Benchmark, it will provide Shareholders with
notice in a prospectus supplement and/or through a current report on Form 8-K or in the Trust’s annual or quarterly reports.
The trading platforms that may be designated as a principal market under the Benchmark Provider’s methodology face a number of risks.
Unlike traditional stock and commodity exchanges, cryptocurrency trading platforms face a number of risks, including but not limited to, distributed denial-of-service (“dDoS”), interruption of
trading, hacking of user accounts, lack of standards and naming convention for symbols, and an unstable technological and legal environment (causing changes in fee structure, blocking of funds withdrawal, etc.). Suspension or disruption of market
trading in SOL on one or more Benchmark Pricing Sources may adversely affect the value of the Benchmark.
The Benchmark is subject to the limitations of its methodology and the Solana market.
Though the Benchmark is designed to be representative of the SOL market or otherwise align with its stated objective, it may not be representative in every case or achieve its stated objective in
all instances. The Benchmark is designed and calculated strictly to follow the rules of its methodology, and any Benchmark price or other output is limited in its usefulness to such design and calculation. In addition, the Benchmark will necessarily
be composed of a limited number of potential principal markets, and thus the Benchmark may not reflect the value of SOL on crypto trading platforms not considered in the Benchmark. Furthermore, the Benchmark Provider publicizes its methodology as a
whitepaper available for download on the Benchmark Provider’s website.
The SOL market can be volatile, including those market interests which the Benchmark intends to measure or upon which the Benchmark is dependent in order to achieve its stated objective. For
example, illiquidity can have an impact on the quality or amount of data available to the Benchmark Provider for calculation, and may cause the Benchmark to produce unpredictable or unanticipated results. In addition, market trends and changes to
market structure may render the objective of the Benchmark unachievable or cause the Benchmark to become impractical to replicate.
The Benchmark Provider could experience system failures or errors.
If the computers or other facilities of the Benchmark Provider, Benchmark Pricing Sources, data providers and/or relevant stock exchange malfunction for any reason, calculation and dissemination of
the Benchmark may be delayed. Errors in Benchmark data, the Benchmark computations and/or construction may occur from time to time and may not be identified and/or corrected for a period of time or at all, which may have an adverse impact on the
Trust and the Shareholders. Any of the foregoing may lead to the errors in the Benchmark, which may lead to a different investment outcome for the Trust and its Shareholders than would have been the case had such events not occurred. The Benchmark is
the reference price for
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calculating the Trust’s NAV. Consequently, losses or costs associated with the Benchmark’s errors or other risks described above will generally be borne by the Trust and the Shareholders and
neither the Sponsor nor its affiliates or agents make any representations or warranties regarding the foregoing.
If the Benchmark is not available, the Trust’s holdings may be fair valued in accordance with the policy approved by the Sponsor. See “Calculation of NAV—General.” To the extent the valuation
determined in accordance with the policy approved by the Sponsor differs materially from the actual market price of SOL, the price of the Shares may no longer track, whether temporarily or over time, the global market price of SOL, which could
adversely affect an investment in the Trust by reducing investors’ confidence in the Shares’ ability to track the global market price of SOL. To the extent such prices differ materially from the market price for SOL, investors may lose confidence in
the Shares’ ability to track the market price of SOL, which could adversely affect the value of the Shares. The Sponsor does not anticipate that the need to “fair value” SOL will be a common occurrence.
Risks related to pricing.
As set forth under “Calculation of NAV” below, the Trust’s portfolio will be priced, including for purposes of determining the NAV, based upon the estimated fair market value (“FMV”) for SOL
determined by the Benchmark Provider. The price of SOL in U.S. Dollars or in other currencies available from other data sources may not be equal to the prices used to calculate the NAV. The Benchmark Provider has substantial discretion at any time to
change the methodology used to determine the FMV of SOL, including the spot markets underlying its methodology. The Benchmark Provider does not have any obligation to take the needs of the Trust, the Trust’s Shareholders, or anyone else into
consideration in connection with such changes.
The Benchmark Pricing Sources used by the Benchmark Provider are digital asset spot markets that facilitate the buying and selling of SOL and other digital assets. Although many Benchmark Pricing
Sources refer to themselves as “exchanges,” they are not registered with, or supervised by, the SEC or CFTC and do not meet the regulatory standards of a national securities exchange or designated contract market. For these reasons, among others,
purchases and sales of SOL may be subject to temporary distortions or other disruptions due to various factors, including the lack of liquidity in the markets and government regulation and intervention. These circumstances could affect the price of
SOL determined by the Benchmark Provider.
The NAV of the Trust will change as fluctuations occur in the market price of the Trust’s SOL holdings. Shareholders should be aware that the public trading price per Share may be different from
the NAV for a number of reasons, including price volatility, trading activity, the closing of SOL trading platforms due to fraud, failure, security breaches or otherwise, and the fact that supply and demand forces at work in the secondary trading
market for Shares are related, but not identical, to the supply and demand forces influencing the market price of SOL. An Authorized Participant may be able to create or redeem a Creation Basket at a discount or a premium to the public trading price
per Share.
Shareholders also should note that the size of the Trust in terms of total SOL held may change substantially over time and as Creation Baskets are created and redeemed.
In the event that the value of the Trust’s SOL holdings or SOL holdings per Share is incorrectly calculated, neither the Sponsor nor the Administrator will be liable for any error and such
misreporting of valuation data could adversely affect the value of the Shares.
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SOLANA AND THE SOLANA MARKET
This section of the Prospectus provides a more detailed description of SOL, including information about the historical development of SOL, how a person holds SOL, how to use SOL in transactions,
how to trade SOL, the markets where SOL can be bought, held and sold, the SOL over-the-counter (“OTC”) market and government oversight of SOL.
Solana and the Solana Network
Solana is a digital asset that is created and transmitted through the operations of the peer-to-peer Solana network, which is a network of computers, known as nodes, that operates on cryptographic computer-code based
logic, called a protocol. No single entity owns or operates the Solana network, the infrastructure of which is collectively maintained by a distributed user base, a phenomenon known as decentralization. The Solana network allows people to exchange
tokens of value, called Solana, which are recorded on a public transaction ledger known as the Solana blockchain. Solana can be used to pay for goods and services, including computational power on the Solana network, or it can be converted to fiat
currencies, such as the U.S. dollar, at rates determined on platforms that enable trading in Solana or in individual end-user-to-end-user transactions under a barter system.
The Solana network allows users to write and implement computer programs called smart contracts-that is, general-purpose code that executes on every computer in the network and can instruct the transmission of
information and value based on a sophisticated set of logical conditions. Using smart contracts, users can create markets, store registries of debts or promises, represent the ownership of property, move funds in accordance with conditional
instructions and create digital assets other than Solana on the Solana network. Smart contract operations are executed on the Solana blockchain in exchange for payment of Solana. The Solana network is one of a number of projects intended to expand
blockchain use beyond just a peer-to-peer money system.
The Solana protocol introduced the Proof-of-History (PoH) timestamping mechanism. PoH automatically orders on-chain transactions by creating a historical record that proves an event has occurred at a specific moment in
time. PoH is intended to provide a transaction processing speed and capacity advantage over other blockchain networks like Bitcoin and Ethereum, which rely on sequential production of blocks and can lead to delays caused by validator confirmations.
PoH is a new blockchain technology that is not widely used. PoH may not function as intended. For example, it may require more specialized equipment to participate in the network and fail to attract a significant number of users, or may be subject to
outages or fail to function as intended. In addition, there may be flaws in the cryptography underlying PoH, including flaws that affect functionality of the Solana network or make the network vulnerable to attack.
In addition to the PoH mechanism described above, the Solana network uses a proof-of-stake consensus mechanism to incentivize Solana holders to validate transactions. Unlike proof-of-work, in which miners expend
computational resources to compete to validate transactions and are rewarded coins in proportion to the amount of computational resources expended, in proof-of-stake, validators risk or “stake” coins to compete to be randomly selected to validate
transactions and are rewarded coins in proportion to the amount of coins staked. Any malicious activity, such as disagreeing with the eventual consensus or otherwise violating protocol rules, results in the forfeiture or “slashing” of a portion of
the staked coins. Proof-of-stake is viewed as more energy efficient and scalable than proof-of-work and is sometimes referred to as “virtual mining.”
History of Solana
The Solana protocol was first conceived by Anatoly Yakovenko in a 2017 whitepaper.
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Development of the Solana network is overseen by the Solana Foundation, a Swiss non-profit organization, and Solana Labs, Inc. (“Solana Labs”), a Delaware corporation, which administered the
original network launch and token distribution. Although Solana Labs and the Solana Foundation continue to exert significant influence over the direction of the development of Solana, the Solana network, like the Ethereum network, is understood to be
decentralized and does not require governmental authorities or financial institution intermediaries to create, transmit or determine the value of SOL.
In order to own, transfer or use SOL directly on the Solana network (as opposed to through an intermediary, such as a custodian), a person generally must have internet access to connect to the
Solana network. SOL transactions may be made directly between end-users without the need for a third-party intermediary. To prevent the possibility of double-spending Solana, a user must notify the Solana network of the transaction by broadcasting
the transaction data to its network peers. The Solana network provides confirmation against double-spending by memorializing every transaction in the Solana blockchain, which is publicly accessible and transparent. This memorialization and
verification against double-spending is accomplished through the Solana network validation process, which adds “blocks” of data, including recent transaction information, to the Solana blockchain. Unlike other blockchains that rely solely on
sequential production of blocks through proof-of-work or proof-of-stake mechanisms, however, the Solana network introduces PoH, which creates a historical record that proves an event has occurred at a specific moment in time.
Smart Contracts and Development on the Solana network
Smart contracts are programs that run on a blockchain that can execute automatically when certain conditions are met. Smart contracts facilitate the exchange of anything representative of value,
such as money, information, property, or voting rights. Using smart contracts, users can send or receive digital assets, create markets, store registries of debts or promises, represent ownership of property or a company, move funds in accordance
with conditional instructions and create new digital assets. Smart contracts and DApps can execute their code on the execution layer of the Layer 1 (as defined below) Solana network, through Execution Clients located on the Layer 1 Solana network.
Alternatively, one proposed path to enabling the Solana network to scale - i.e., removing some computational load and thus network congestion from the Layer 1 Solana network - is to facilitate smart contracts and DApps executing their code on Layer
2s (as defined below) and rolling up (as defined below) their transactions back to the main Layer 1 Solana network through the Layer 1 network’s consensus mechanism.
Development on the Solana network involves building more complex tools on top of smart contracts, such as DApps; organizations that are autonomous, known as decentralized autonomous organizations
(“DAOs”); and entirely new decentralized networks. For example, a company that distributes charitable donations on behalf of users could hold donated funds in smart contracts that are paid to charities only if the charity satisfies certain
pre-defined conditions.
In total, as of June 1, 2025, more than 200 DApps are currently built on the Solana network, including DApps in the collectible non-fungible token, gaming, music streaming, and decentralized finance
categories.
Moreover, the Solana network has also been used as a platform for creating new digital assets and conducting their associated initial coin offerings.
More recently, the Solana network has been used for DeFi or open finance platforms, which seek to democratize access to financial services, such as borrowing, lending, custody, trading,
derivatives and insurance, by removing third-party intermediaries. DeFi can allow users to lend and earn interest on their digital assets, exchange one digital asset for another and create derivative digital assets such as stablecoins, which are
digital assets pegged to a reserve asset such as fiat currency. Over the course of 2025, between
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$6 billion and $13 billion worth of digital assets were locked up as collateral on DeFi platforms on the Solana network.
In addition, the Solana network and other smart contract platforms have been used for creating non-fungible tokens (“NFTs”). Unlike digital assets native to smart contract platforms which are
fungible and enable the payment of fees for smart contract execution. Instead, NFTs allow for digital ownership of assets that convey certain rights to other digital or real-world assets. This new paradigm allows users to own rights to other assets
through NFTs, which enable users to trade them with others on the Solana network. For example, an NFT may convey rights to a digital asset that exists in an online game or a DApp, and users can trade their NFT in the DApp or game, and carry them to
other digital experiences, creating an entirely new free-market internet-native economy that can be monetized in the physical world.
Overview of the Solana Network Operations
In order to own, transfer or use SOL directly on the Solana network on a peer-to-peer basis (as opposed to through an intermediary, such as a custodian or centralized exchange), a person generally
must have internet access to connect to the Solana network. SOL transactions may be made directly between end-users without the need for a third-party intermediary. To prevent the possibility of double-spending SOL, a user must notify the Solana
network of the transaction by broadcasting the transaction data to its network peers. The Solana network provides confirmation against double-spending by memorializing every peer-to-peer transaction in the Solana blockchain, which is publicly
accessible and transparent. This memorialization and verification against double-spending of peer-to-peer transactions is accomplished through the Solana network validation process, which adds “blocks” of data, including recent transaction
information, to the Solana blockchain. Unlike other blockchains that rely solely on sequential production of blocks through proof-of-work or proof-of-stake mechanisms, however, the Solana network introduces PoH, which creates a historical record that
proves an event has occurred at a specific moment in time.
Summary of a Solana Transaction
Prior to engaging in Solana transactions directly on the Solana network, a user generally must first install on its computer or mobile device a Solana network software program that will allow the
user to generate a private and public key pair associated with a Solana address. The Solana network software program and the Solana address also enable the user to connect to the Solana network and transfer Solana to, and receive Solana from, other
users.
Each user’s Solana network address, or wallet, is associated with a unique “public key” and “private key” pair. To receive Solana in a peer-to-peer transaction, the Solana recipient must provide
its public key to the party initiating the transfer. This activity is analogous to a recipient for a transaction in U.S. dollars providing a routing address in wire instructions to the payor so that cash may be wired to the recipient’s account. The
payor approves the transfer to the address provided by the recipient by “signing” a transaction that consists of the recipient’s public key with the private key of the address from which the payor is transferring the Solana. The recipient, however,
does not make public or provide to the sender its related private key, only its public key.
Neither the recipient nor the sender reveal their private keys in a peer-to-peer transaction, because the private key authorizes transfer of the funds in that address to other users. Therefore, if
a user loses their private key, the user may permanently lose access to the Solana contained in the associated address. Likewise, Solana is irretrievably lost if the private key associated with them is deleted and no backup has been made. When
sending Solana, a user’s Solana wallet must validate the transaction with the sender’s associated private key. In addition, since every computation on the Solana network requires processing power, there is a transaction fee involved with the transfer
that is paid by the payor and the resulting digitally
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validated transaction is sent by the user’s Solana network software program to the Solana network validators to allow transaction confirmation.
Solana network validators record and confirm transactions when they validate and add blocks of information to the Solana blockchain. No minimum amount of Solana is required to become a validator,
which allows them to activate a unique validator key pair (consisting of a public and private validator key). When a validator is selected to validate a block, it creates that block, which includes data relating to (i) the verification of newly
submitted transaction requests and accepted transactions and (ii) a reference to the prior block in the Solana blockchain to which the new block is being added. The validator becomes aware of outstanding unrecorded transactions through the data
packet transmission and distribution discussed above.
Upon the addition of a block of Solana transactions, the Solana network software program of both the spending party and the receiving party will show confirmation of the transaction on the Solana
blockchain and reflect an adjustment to the Solana balance in each party’s Solana network public key, completing the Solana transaction. Once a transaction is confirmed on the Solana blockchain, it is irreversible.
Some Solana transactions are conducted “off-blockchain” and are therefore not recorded in the Solana blockchain. Some “off-blockchain transactions” involve the transfer of control over, or
ownership of, a specific digital wallet holding Solana or the reallocation of ownership of certain Solana in a digital wallet containing assets owned by multiple persons, such as a digital wallet maintained by a digital assets platform. In contrast
to on-blockchain transactions, which are publicly recorded on the Solana blockchain, information and data regarding off-blockchain transactions are generally not publicly available. Therefore, off-blockchain transactions are not truly Solana
transactions in that they do not involve the transfer of transaction data on the Solana network and do not reflect a movement of Solana between addresses recorded in the Solana blockchain. For these reasons, off-blockchain transactions are subject to
risks as any such transfer of Solana ownership is not protected by the protocol behind the Solana network or recorded in, and validated through, the blockchain mechanism.
Creation of New Solana
Initial Creation of Solana
Unlike other digital assets such as Bitcoin, which are solely created through a progressive mining process, 500 million SOL were created in connection with the launch of the Solana network. The initial 500 million Solana were distributed as follows:
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Investors: 189 million SOL, or 37.8% of the supply, was sold in private sales to venture capital and other investors conducted between 2018 to 2021.
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Solana Foundation: 52 million SOL, or 10.4% of the supply, was distributed to the SOL Foundation for operational costs incurred in the development of the Solana network.
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Solana Labs, Inc.: 64 million SOL, or 12.8% of the supply, was retained by Solana Labs to be used, at least in part, to compensate the employees of Solana Labs.
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Community: 195 million SOL, or 39.0% of the supply, was distributed to the Solana Foundation to be deployed as bounties, incentive programs, marketing and grants.
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Following the launch of the Solana network, SOL supply increases through a progressive minting process. SOL supply and issuance rate varies based on factors such as
recent use of the network.
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Proof-of-Stake Process
Unlike proof-of-work, in which validators expend computational resources to compete to validate transactions and are rewarded coins in proportion to the amount of computational resources expended,
in proof-of-stake, validators risk or “stake” coins to compete to be randomly selected to validate transactions and are rewarded coins in proportion to the amount of coins staked. Any malicious activity, such as validating multiple blocks,
disagreeing with the eventual consensus or otherwise violating protocol rules, results in the forfeiture or “slashing” of a portion of the staked coins. Proof-of-stake is believed by some to be more energy efficient and scalable than proof-of-work.
Under a proof-of-stake protocol, token holders who voluntarily commit to staking are given the exclusive right to validate transactions and participate in consensus. Token holders can elect to
stake their SOL in order to earn SOL tokens as staking rewards. Token holders can actively participate in the staking of their SOL by operating a validator node.
Alternatively, token holders can participate in staking by delegating their SOL to a validator node operated by another party. Validator nodes are selected by the Solana network to validate
transactions and earn staked SOL rewards for completing such validation. Approximately every 400-600 milliseconds, a new block is added to the Solana network with the latest transactions processed by the network, and the validator that generated this
block is awarded SOL. As such, there is not a competitive race to solve a mathematical puzzle that prevails in a proof-of-work consensus mechanism.
Fees are paid to validators that participate in the consensus and propose new blocks on the blockchain and other validators earn much lower fees for attesting to each block. Validators perform both
roles on a continuous basis and are called upon on a basis determined by the protocol. The SOL trading market may be impacted by the supply of SOL that voluntarily elects to commit to staking. The Solana network issues a fixed amount of rewards for
voting on blocks, which are divided among the participating validators. The less validators and the less users staking their SOL, the more rewards are available, and vice versa.
Staking
Subject to the Staking Condition being met, the Sponsor seeks to stake substantially all of the Trust’s assets through one or more trusted Staking Providers, which may include an affiliate of
the Sponsor or the Execution Agent. In consideration for any staking activity in which the Trust may engage, the Trust would receive certain staking rewards of SOL tokens, which may be treated as income to the Trust. The amount of SOL the Trust may
receive as reward for its staking activity can vary significantly. Staking activity comes with a risk of loss of SOL. Staked assets are not subject to the protections enjoyed by depositors with FDIC or SIPC member institutions. The Trust may also
be subject to “slashing” penalties. Slashings occur when a validator attests to two different histories of the chain and penalties occur when a validator is offline for a prolonged period of time. In combination, they deter malicious validators
from attacking blockchains. To date, no slashing penalty has been assessed on the Solana network. The Sponsor believes that the Staking Providers are reputable and will not engage in harmful behavior that could lead to slashing or penalties but the
Sponsor cannot guarantee that there will be no slashing penalties assessed.
In May of 2025 the SEC Division of Corporation Finance's staff issued a “Statement on Protocol Staking Activities” (the “Statement”). The Statement gave the SEC staff’s view regarding staking on
networks that use a proof-of-stake consensus mechanism. The staff's view is that some of these activities do not involve the offer and sale of securities within the meaning of the Securities Act and the Exchange Act. Accordingly, under such an
interpretations, the participants in such staking activities do not need to register these transactions with the SEC under the Securities Act. The Sponsor believes that the Trust’s staking activities are of the type described in the Statement and
therefore does not involve the purchase and sale of securities.
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However, if the staff or the SEC were to disagree with the Sponsor’s position, or if the SEC or the staff were to take a position counter to the position stated in the Statement, the Trust or its
service providers may be deemed to be in violation of federal securities laws. The SEC Division of Corporation Finance subsequently gave a similar statement with regard to certain liquid staking activities in August of 2025.
Staking Rewards are computed and issued once per Epoch. Generally, an Epoch is approximately two days long on the Solana network. Rewards accrued in a given Epoch are issued to all validators and
delegators in the first block of the following Epoch. Staking yield is presented as an annualized figure, though the number varies each Epoch as the inflation rate and total active stake continually changes. Staking Rewards have historically ranged
from a low of 5.33% in June 2022 to a high of 12.36% in January 2025.
The treatment of staking in a grantor trust for U.S. federal income tax purposes is still developing. As a grantor trust, the Trust can undertake only certain types of activities. Please see
“Taxation of the Trust” below for more details.
Limits on Solana Supply.
The rate at which new SOL supply has been minted and put into circulation has varied since network launch. Additionally, the Solana protocol reduces the SOL supply by
eliminating 50% of transaction fees paid to the network. As a result, net changes in SOL supply are expected to vary in the future.
At network launch, the SOL circulating supply was 8 million SOL. Between network launch and September 30, 2025, the circulating supply of SOL increased by roughly 6,800% to approximately 544 million
SOL.
In February 2021, the SOL supply inflation rate was changed from 0.1% to a new initial inflation rate of 8%. The 8% initial inflation rate is scheduled to decline in 15% increments until a long-term
inflation rate of 1.5% is reached. As of September 30, 2025, the SOL supply issuance rate was approximately 4.2% on an annual basis before any offsets for eliminated transaction fees.
Modifications to the Solana Protocol
Historically, the Solana network’s development has been overseen by Solana Labs, the Solana Foundation and other core developers. The Solana Foundation and core developers are able to
access and alter the Solana network source code and, as a result, they are responsible for quasi-official releases of updates and other changes to the Solana network’s
source code.
For example, in March 2020, the Solana network launched the Mainnet Beta version of the Solana network, one
month after launching the testnet, Tour de SOL. Solana Labs led the development of these reference implementations.
The Solana network operates using open-source protocols, meaning that any user can become a node by downloading the Solana Client and participating in the Solana network, and no permission of a central authority or
body is needed to do so. In addition, anyone can propose a modification to the Solana network’s source code and then propose that the Solana network community support the modification. These proposed modifications to the Solana network’s source code,
if adopted, can lead to forks (referred to as “planned forksˮ because they take place through a formal process). A forthcoming “hard fork” called “Alpenglow” was announced by developers of the Solana network in May of 2025 and is expected to reduce
transaction finality time and enhance network security. Alpenglow and other future updates could be improperly implemented or not implemented at all, potentially creating vulnerabilities, outages and disruptions in the Solana network, which would
impact the price of SOL and the Shares.
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In the case of planned forks, the core developers, including those associated with or funded by the Solana Foundation, are able to access and alter the Solana network source code and, as a result, they are typically
responsible for proposing quasi-official or widely publicized releases of updates and other changes to the Solana network’s source code called SIMDs. Any user can propose an idea for modifying the Solana network’s source code, and the core developers
are responsible for merging the proposed idea into the SIMD repository on GitHub, where it formally becomes a SIMD. However, the release of proposed updates to the Solana network’s source code by core developers does not guarantee that the updates
will be adopted. The developers of each Solana Client must agree to implement the SIMD’s changes to the Solana network in the source code for their respective client software, nodes must accept the changes made available by the developers of the
Solana Client software they use by choosing to individually download the modified Solana Client software, and ultimately a critical mass of validators and users - such as DApp and smart contract developers, as well as end users of DApps and smart
contracts, and anyone else who transacts on the Solana blockchain or Solana network - must support the shift, or the upgrades will lack adoption.
Typically in the case of a planned fork, once the SIMDs are formally introduced by being merged into the SIMD repository on GitHub, a robust debate within the Solana community as to the advisability of the proposed
change ordinarily follows. Assuming the core developers at the protocol level and the developers of individual Solana Clients reach a broad consensus among themselves in favor of introducing the change into the respective source code they are
responsible for developing and maintaining, the source code modification will be introduced and made available to download. A modification of the Solana network’s source code is only effective with respect to the Solana nodes that download it and
modify their Solana Clients accordingly, and in practice such decisions are heavily influenced by the preferences of validators and users. Typically, after a modification introduced and if a sufficiently broad critical mass of users and validators
support the modification and nodes download the modification into their individual Solana Clients, the change is implemented and the Solana network continues to operate uninterrupted, assuming there are no software issues (e.g., bugs, outages, etc.).
However, if less than a sufficiently broad critical mass (in practice, amounting to a substantial majority) of users and validators support the proposed modification and nodes refuse to download the modification to their Solana Clients, and the
modification is not backwards compatible with the Solana blockchain or network or the Solana Clients of nodes prior to their modification, the consequence would be what is known as a “hard fork” of the Solana network, with one group of nodes running
the pre-modified software, with users and validators continuing to use the pre-modified software, while the other group would adopt and run the modified software. See “Risk Factors -A temporary or permanent “fork” or “clone” could adversely affect an
investment in the Shares.”
Core development of the Solana source code has increasingly focused on modifications of the Solana protocol to increase speed and scalability and to allow for financial and non-financial next generation uses.
The Trust’s activities will not directly relate to scalability or upgrade projects, though such projects may potentially increase demand for Solana and the utility of the Solana network as a whole.
Conversely, if they are unsuccessful or they cause users or application or smart contract developers to migrate away from the Solana blockchain, demand for SOL could potentially be reduced. Also, projects that operate and are built within the Layer 1
Solana blockchain and network may increase the data flow on the Solana network and could either “bloat” the size of the Solana blockchain or slow confirmation times.
Forks and Airdrops
A “hard fork” of the Solana network (or any other a proof-of-stake digital asset network) occurs when there is a disagreement among users and validators over modifications to the network, which are
typically made through software upgrades and subsequently accepted or rejected through downloads or lack thereof of the relevant software upgrade by users. If less than a substantial majority of users and validators consent to a proposed
modification, and the modification is not compatible with the software prior to its modification, a fork in the blockchain results, with one prong running the pre-modified software and the other running
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the modified software. The effect of such a fork is the existence of two versions of the network running in parallel, yet lacking interchangeability. After a fork, holders of the original digital
asset typically end up holding equal amounts of the original digital asset and the new digital asset.
For example, in August 2017, bitcoin “forked” into bitcoin and a new digital asset, bitcoin cash, as a result of a several-year dispute over how to increase transaction throughput. The solution
favored by the majority of users and miners was to make software changes that would allow “off-chain” scaling solutions, such as the Lightning Network, which works by allowing secure transactions to occur in a separate network of bilateral payment
channels that only periodically settle through a transaction on the main Bitcoin network. A minority group favored a less complex approach of simply increasing the number of transactions that can be validated at the same time. A sizable minority of
miners adopted software that implemented the latter approach, which effectively created a new network, the Bitcoin Cash network, with a transaction history identical to that of the Bitcoin Network. The identical transaction history meant that each
holder of bitcoin at the time of the new network’s formation continued to hold bitcoin for use on the Bitcoin Cash network, but also received an equal amount of Bitcoin Cash for use on the new network.
Forks may also occur after a significant security breach. For example, in June 2016, a smart contract developed and deployed on the Ethereum network was hacked and approximately $60 million worth of
ether was stolen, which resulted in most participants in the Ethereum ecosystem electing to adopt a hard fork that effectively reversed the hack. However, a minority of users continued to develop the old blockchain, now referred to as “Ethereum
Classic” with the digital asset on that blockchain also named ether, or ETC. Ethereum Classic’s ether remains traded on several digital asset trading platforms.
Additionally, a fork could be introduced by an unintentional, unanticipated software flaw in the multiple versions of otherwise compatible software users run for any given digital asset. Such a fork
could adversely affect SOL’s viability. It is possible, however, that a substantial number of users and validators could adopt an incompatible version of the network while resisting community-led efforts to merge the two chains, resulting in a
permanent fork.
A hard fork can introduce new security risks. Another possible result of a hard fork is an inherent decrease in the level of security. After a hard fork, it may become easier for an individual
validator or validator pool to exceed 50% of the processing power of the Solana network, thereby making the network more susceptible to attack. A fork in the Solana network could adversely affect an investment in the Shares.
In addition to forks, SOL (or any other digital asset) may become subject to a similar occurrence known as an “airdrop.” In an airdrop, the promoters of a new digital asset announce to holders of
another digital asset that they will be entitled to claim a certain amount of the new digital asset for free simply by virtue of having held the original digital asset at a certain point in time leading up to the airdrop. For example, in March 2017,
the promoters of Stellar Lumens announced that anyone that owned ether as of June 26, 2017 could claim, until August 27, 2017, a certain amount of Stellar Lumens. Airdrops could create operational security, legal or regulatory, or other risks for the
Trust, the Sponsor, Authorized Participants, or other entities.
From time to time, the Trust may be entitled to Incidental Rights or IR Assets by virtue of its ownership of SOL, generally through a fork in the Solana blockchain, an airdrop offered to holders of SOL or other similar
event.
In the event the Trust becomes entitled to Incidental Rights or IR Assets by virtue of its ownership of SOL, the Sponsor will instruct the Trust to immediately and irrevocably disclaim all rights
to the IR Assets so created. SOL is the only digital asset that will be held by the Trust. In the event the Trust seeks to change its treatment of Incidental Rights or IR Assets, an application would need to be filed with the SEC by the Exchange
seeking approval to amend its listing rules.
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In the event of a fork, the Sponsor will, as permitted by the terms of the Trust Agreement, determine which network it believes is generally accepted as the Solana network and should therefore be
considered the appropriate network, and the associated asset as SOL, for the Trust’s purposes.
If the Trust modifies its policy on forks and airdrops, notice to Shareholders will be provided on the Trust’s website, in a prospectus supplement, through a current report on Form 8-K and/or in
the Trust’s annual or quarterly reports.
Forms of Attack Against the Solana network
All networked systems are vulnerable to various kinds of attacks. As with any computer network, the Solana network contains certain flaws. For example, the Solana network is currently vulnerable
to a “51% attack” where, if a validator or group of validators acting in concert were to gain control of more than the relevant threshold of the staked SOL, a malicious actor would be able to gain full control of the network and the ability to
manipulate the Solana blockchain. Although referred to generically as “51% attacks”, there are different thresholds that could lead to different types of attack on the consensus process. For more information, see “Risk Factors—Flaws in the source
code of Solana, or flaws in the underlying cryptography, could leave the Solana network vulnerable to a multitude of attack vectors.” As of September 30, 2025, the top three largest staking pools controlled nearly 69% of the SOL staked on the
Solana network.
In addition, many digital asset networks have been subjected to a number of denial-of-service attacks, which has led to temporary delays in block creation and in the transfer of SOL. Any similar
attacks on the Solana network that impact the ability to transfer SOL could have a material adverse effect on the price of SOL and the value of the Shares.
For example, on September 14, 2021, the Solana network experienced a significant disruption, later attributed to a type of denial-of-service attack, and was offline for 17 hours, only returning to full
functionality 24 hours later. While persons associated with Solana Labs and/or the Solana Foundation are understood to have played a key role in bringing the network back online, the broader community also played a key role, as Solana validators
coordinated to upgrade and restart the network. Any similar attacks on the Solana network that impact the ability to transfer Solana could have a material adverse effect on the price of SOL and the value of the Shares.
This is not intended as an exhaustive list of all forms of attack against the Solana network. For additional information, see the “Risk Factors” section of this prospectus.
Market Participants
Validators
In proof-of-stake, validators risk or stake coins to compete to be randomly selected to validate transactions and are rewarded for performing their responsibilities and behaving in accordance with
protocol rules. Malfunctions that cause validators to go offline and, in turn, inhibit them from performing their duties, can result in financial penalties (e.g., inactivity leak). Any malicious activity, such as validating multiple blocks for the
same slot, making incorrect attestations or otherwise violating protocol rules, results in the penalization or in extreme cases slashing of staked coins and forced exit from performing validator duties. The penalty varies depending on the type of
offense and correlation to potential offenses by other validators.
Validators range from SOL enthusiasts to professional operations that design and build dedicated machines and data centers, including “clusters,” which are groups of validators that act cohesively and
combine their processing to confirm transactions. On the Solana network, a validator does not have any minimum staking
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requirement in order to participate in maintaining the network. When a validator confirms a transaction, the validator and any associated stakers receive fees, including a base fee and a discretionary
tip. During the course of ordering transactions and validating blocks, validators may be able to prioritize certain transactions in return for increased transaction fees, an incentive system known as “Maximal Extractable Value” or MEV. For example,
in blockchain networks that facilitate DeFi protocols in particular, such as the Ethereum network, users may attempt to gain an advantage over other users by increasing offered transaction fees to incentivize validators to give their submitted
transaction requests priority. Validators less commonly capture MEV in the Solana network because, unlike the Ethereum network, it does not publicly expose transactions before they are accepted by a validator. However, some efforts are underway to
help Solana Validators consistently capture MEV.
Investment and Speculative Sector
This sector includes the investment and trading activities of both private and professional investors and speculators. Historically, larger financial services institutions are publicly reported to
have limited involvement in investment and trading in digital assets, although the participation landscape is beginning to change. Currently, there is relatively limited use of digital assets in the retail and commercial marketplace in comparison to
relatively extensive use by speculators, and a significant portion of demand for digital assets is generated by speculators and investors seeking to profit from the short- or long-term holding of digital assets.
Retail Sector
The retail sector includes users transacting in direct peer-to-peer SOL transactions through the direct sending of SOL over the Solana network. The retail sector also includes transactions in which
consumers pay for goods or services from commercial or service businesses through direct transactions or third-party service providers, although the use of SOL as a means of payment is still developing and has not been accepted in the same manner as
bitcoin due to SOL’s relative nascency and because SOL has a generally different purpose than bitcoin. In addition, end users of DApps and smart contracts built on the Layer 1 Solana network can access many types of goods and services and engage in a
variety of transactions using the functionality of the relevant DApp or smart contract.
Service Sector
This sector includes companies that provide a variety of services including the buying, selling, payment processing and storing of SOL. For example, Coinbase, Kraken, and Gemini are some of the
larger Solana trading platforms by volume traded. Coinbase Custody Trust Company, LLC, the Solana Custodian for the Trust, is a digital asset custodian that provides custodial accounts that store SOL for users. If Solana network continues grows in
adoption, it is anticipated that service providers may expand the currently available range of services and that additional parties will enter the service sector for the Solana network.
Competition
As of September 2025, over 17,000 different digital tokens are tracked CoinGecko.com, of which Solana is currently the 6th largest digital asset by market capitalization. While Solana
has enjoyed some success in its limited history, the aggregate value of outstanding SOL is smaller than that of bitcoin and ether and may be eclipsed by the more rapid development of other digital assets. In addition, a number of newer digital
assets also function as smart contracts platforms, including Avalanche and Cardano. Some industry groups are also creating private, permissioned blockchain versions of Solana.
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Government Oversight
As digital assets have grown in both popularity and market size, the U.S. Congress and a number of U.S. federal and state agencies (including FinCEN, SEC, OCC, CFTC, FINRA, the CFPB, the Department
of Justice, the Department of Homeland Security, the Federal Bureau of Investigation, the IRS, the Office of the Comptroller of the Currency, the FDIC, the Federal Reserve and state financial institution and regulators) have been examining the
operations of digital asset networks, digital asset users and the digital asset markets, with particular focus on the extent to which digital assets can be used to launder the proceeds of illegal activities or fund criminal or terrorist enterprises
and the safety and soundness of exchanges or other service providers that hold or custody digital assets for users. Many of these state and federal agencies have issued consumer advisories regarding the risks posed by digital assets to investors.
Recently, President Trump has issued executive orders addressing the administration’s intention to establish a comprehensive digital asset regulatory framework. It is not possible to predict
whether, or when, any of these developments will lead to Congress granting 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 or how any new regulations or changes to existing regulations might impact the value of digital assets generally and SOL held by the Trust specifically. The consequences of increased federal
regulation of digital assets and digital asset activities could have a material adverse effect on the Trust and the Shares.
In addition, the SEC, U.S. state securities regulators and several foreign governments have issued warnings and instituted legal proceedings in which they argue that certain digital assets may be
classified as securities and that both those digital assets and any related initial coin offerings are subject to securities regulations. The outcomes of these proceedings, as well as ongoing and future regulatory actions may alter, perhaps to a
materially adverse extent, the nature of an investment in the Shares or the ability of the Trust to continue to operate. Additionally, U.S. state and federal, and foreign regulators and legislatures have taken action against virtual currency
businesses or enacted restrictive regimes in response to adverse publicity arising from hacks, consumer harm, or criminal activity stemming from virtual currency activity.
Various foreign jurisdictions have, and may continue to, in the near future, adopt laws, regulations or directives that may affect a digital asset network, the digital asset markets, and their users, particularly
digital asset exchanges and service providers that fall within such jurisdictions’ regulatory scope.
Spot Solana Markets
Solana spot markets typically permit investors to open accounts with the market and then purchase and sell SOL via websites or through mobile applications. Prices for trades on Solana spot markets are
typically reported publicly. An investor opening a trading account must deposit an accepted government-issued currency into their account with the spot market, or a previously acquired digital asset, before they can purchase or sell assets on the
spot market. The process of establishing an account with a Solana market and trading SOL is different from, and should not be confused with, the process of users sending SOL from one Solana address to another Solana address on the Solana blockchain.
This latter process is an activity that occurs on the Solana network, while the former is an activity that occurs entirely on the private website operated by the spot market. The spot market typically records the investor’s ownership of SOL in its
internal books and records, rather than on the Solana blockchain. The spot market ordinarily does not transfer SOL to the investor on the Solana blockchain unless the investor makes a request to the exchange to withdraw the SOL in their exchange
account to an off-exchange Solana wallet.
Outside of the spot markets, SOL can be traded in the over the counter (“OTC”) market in transactions that are not publicly reported. The OTC market is largely institutional in nature, and OTC market
participants
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generally consist of institutional entities, such as firms that offer two-sided liquidity for SOL, investment managers, proprietary trading firms, high-net-worth individuals that trade SOL on a
proprietary basis, entities with sizeable SOL holdings, and family offices. The OTC market provides a relatively flexible market in terms of quotes, price, quantity, and other factors, although it tends to involve large blocks of SOL. The OTC market
has no formal structure and no open-outcry meeting place. Parties engaging in OTC transactions will agree upon a price - often via phone or email - and then one of the two parties will then initiate the transaction. For example, a seller of SOL could
initiate the transaction by sending the SOL to the buyer’s Solana address. The buyer would then wire U.S. dollars to the seller’s bank account. OTC trades are sometimes hedged and eventually settled with concomitant trades on Solana spot markets.
THE TRUST
Overview of the Trust
The Trust is an exchange-traded fund that issues Shares that trade on the Exchange under the ticker symbol QSOL. The Trust’s investment objective is to reflect the performance of the spot price of
SOL as measured using the Benchmark, as adjusted to reflect the SOL staking rewards earned by the Trust and the Trust’s expenses and other liabilities. The Trust expects to outperform the Benchmark before taking its expenses and liabilities into
account due to its plans to receive SOL staking rewards
In seeking to achieve its investment objective, the Trust will hold SOL and will seek to stake substantially all of its SOL to earn staking rewards to the extent the Trust, in the Sponsor’s sole
discretion, can engage in staking without undue legal or regulatory risk, including jeopardizing its status as a grantor trust for U.S. federal income tax purposes (the “Staking Condition”). The Trust will value its Shares daily based on the value
of the Benchmark as of 4:00 p.m. ET. The value of SOL held by the Trust is determined based on the fair market value (“FMV”) price for SOL, reflecting the execution price of SOL on its principal market as determined by the Benchmark Provider.
Invesco Capital Management LLC is the sponsor of the Trust, CSC Delaware Trust Company is the trustee of the Trust, and the Solana Custodian will hold all of the Trust’s SOL on the Trust’s behalf.
The Trust will process all creations and redemptions of Shares in transactions with Authorized Participants. When the Trust issues or redeems its Shares, it will do so only in blocks of 5,000
Shares (a "Creation Basket") based on the quantity of SOL attributable to each Share of the Trust (net of accrued but unpaid Sponsor fees and any accrued but unpaid expenses or liabilities).
Creation and redemption transactions will be conducted in exchange for SOL in-kind or cash.
When purchasing Creation Baskets in-kind with SOL, Authorized Participants will deliver SOL to the Solana Custodian. After confirming receipt of the SOL by the Solana Custodian, the Transfer
Agent is authorized by the Sponsor to issue Creation Baskets of Shares to the creating Authorized Participant in satisfaction of the creation order.
When purchasing Creation Baskets for cash, Authorized Participants will deliver cash to the Cash Custodian. The Execution Agent will be responsible for acquiring the requisite amount of SOL on
behalf of the Trust on an agency basis on the value date of the order. Once the Execution Agent selects a Solana Counterparty, the Cash Custodian will transfer cash to the Solana Counterparty in payment for the requisite amount of SOL. The SOL
acquired from the Solana Counterparty will be transferred to the Solana Custodian. After receipt of the SOL by the Solana Custodian, the Transfer Agent will issue Creation Baskets of Shares to the creating Authorized Participant in satisfaction of
the creation order.
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When redeeming Creation Baskets in-kind for SOL, the Transfer Agent will redeem the Shares and the Solana Custodian will distribute the resulting SOL to the redeeming Authorized Participant in
satisfaction of the redemption order.
When redeeming Creation Baskets for cash, the Execution Agent will be responsible for selling the requisite amount of SOL on behalf of the Trust on an agency basis. Once the Execution Agent
selects a Solana Counterparty, the Solana Custodian will transfer SOL to the Solana Counterparty in return for the requisite cash payment. The cash received from the Solana Counterparty will be delivered to the Cash Custodian. After receipt of the
cash payment, the Transfer Agent will redeem the Shares and the Cash Custodian will distribute the resulting cash to the redeeming Authorized Participant in satisfaction of the redemption order.
In connection with both cash creation and cash redemption transactions, the Execution Agent, pursuant to the oversight of the Sponsor, will decide how and with which Solana Counterparty to
transact on the Trust’s behalf. The Trust will create Shares by receiving SOL from a third-party that is not the Authorized Participant and the Trust (through the Execution Agent, on an agency basis)—not the Authorized Participant—is responsible
for selecting the third-party to deliver the SOL. Further, the third-party will not be acting as an agent of the Authorized Participant with respect to the delivery of the SOL to the Trust or acting at the direction of the Authorized Participant
with respect to the delivery of the SOL to the Trust. The Trust will redeem shares by delivering SOL to a third-party that is not the Authorized Participant and the Trust (through the Execution Agent, on an agency basis)—not the Authorized
Participant—is responsible for selecting the third-party to receive the SOL. Further, the third-party will not be acting as an agent of the Authorized Participant with respect to the receipt of the SOL from the Trust or acting at the direction of
the Authorized Participant with respect to the receipt of the SOL from the Trust.
Subject to specific instructions from the Sponsor, the Execution Agent in its discretion is responsible for selecting the method of transacting, the price, the Solana Counterparty or
Counterparties and the trading platform or venue (if any) for the execution of each purchase and sale of SOL on behalf of the Trust. The Execution Agent has established policies and procedures for identifying, monitoring and performing due
diligence on potential Solana Counterparties and trading platforms or venues, with entities being added or removed from consideration on an ongoing basis. In addition, the Execution Agent evaluates Solana Counterparties and trading platforms or
venues on a per-transaction basis. At the time it selects a Solana Counterparty for any specific transaction, the Execution Agent may consider a number of factors in an effort to seek to achieve “best execution,” including price, transaction costs,
speed, and likelihood of execution and settlement, taking into account the size of the transaction and the experience and capabilities of the Solana Counterparty. Relying on its history of transacting in SOL, the Execution Agent assesses Solana
Counterparties in seeking to achieve the best overall outcome for the Trust. Although the Trust is relatively new, and therefore does not have a long history of trading SOL, the Execution Agent (and its asset management affiliates) have extensive
experience, having traded over $12.5 Billion in digital assets in 2020 across over ten counterparties for other accounts.
As of [ ], 2025, [__] have been identified by the Execution Agent as Solana Counterparties and have consented to be named in this Prospectus. Each of these Solana Counterparties are, and any
other Solana Counterparty the Execution Agent, on behalf of the Trust, places orders with in the future will be, subject to U.S. federal and/or state licensing requirements or similar laws in non-U.S. jurisdictions, and maintain practices and
policies designed to comply with AML and KYC regulations or similar laws in non-U.S. jurisdictions. The Execution Agent, on behalf of the Trust, may engage additional Solana Counterparties at any time. [__] is an affiliate of [__], an Authorized
Participant of the Trust. [__] is an affiliate of [__], an Authorized Participant of the Trust.
The Trust expects to purchase or sell SOL in connection with cash creation or redemption transactions, and may direct the Execution Agent to sell SOL on behalf of the Trust to pay certain
expenses, including the
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Sponsor Fee. Each creating or redeeming Authorized Participant will be charged (i) a transaction fee and (ii) the Custody Transaction Fee in connection with each creation or redemption
transaction.
To support the ability of Authorized Participants to provide liquidity at prices that reflect the value of the Trust’s assets and to facilitate orderly transactions in the Shares, the Trust will
ordinarily process redemptions of Creation Baskets within two business days following receipt of a redemption request by an Authorized Participant.
Creation Baskets are expected to be created when there is sufficient demand for Shares, including when the market price per Share is at a premium to the NAV. Authorized Participants are expected to
sell such Shares to the public at prices that reflect, among other factors, the value of the Trust’s assets, supply of and demand for Shares and market conditions at the time of a transaction. Similarly, Creation Baskets are expected to be redeemed
when the market price per Share is at a discount to the NAV. Investors seeking to purchase or sell Shares on any day are expected to transact in the secondary market, on the Exchange or other national securities exchanges, at the market price per
Share, rather than through the creation or redemption of Creation Baskets.
The Sponsor believes that the design of the Trust will enable Investors to effectively and efficiently implement strategic and tactical asset allocation strategies that use SOL by investing in the
Shares rather than directly in SOL.
Description of Lukka Prime Solana Reference Rate
The Benchmark is designed to provide an estimated fair market value for SOL, in a manner that aligns with U.S. GAAP and IFRS accounting guidelines regarding fair market value measurements. In
this regard, the Benchmark Provider seeks to identify a “principal market” each day for SOL, by evaluating eligible Solana trading platforms across a variety of different criteria, including the trading platforms’ oversight and governance
frameworks, microstructure efficiency, trading volume, data transparency and data integrity. As of September 30, 2025, the following trading platforms are considered to be eligible trading platforms by the Benchmark Provider: Binance, Bitfinex,
Bitflyer, Bitstamp, Bullish, Coinbase, Crypto.com, Gate.io, Gemini, HitBTC, Huobi, itBit, Kraken, KuCoin, LMAX, MEXC Global, OKX and Poloniex (collectively, “Benchmark Pricing Sources”). The Benchmark Provider reviews trading platforms eligible for
inclusion in the Benchmark quarterly. In determining which trading platforms to include, the Benchmark Provider evaluates each trading platform using proprietary ratings criteria. The Benchmark Provider periodically reassesses the trading platforms
eligible to be considered Benchmark Pricing Sources, and makes adjustments as needed.
In pursuit of its commitment to provide the highest quality, institutional grade product offerings, the Benchmark Provider adheres to strict oversight practices. As part of this oversight, the
Benchmark Provider maintains formal governance boards to oversee its data products. The Benchmark Provider’s Price Integrity Oversight Board (“PIOB”) seeks to ensure the integrity and validity of the Benchmark Provider’s pricing and valuation
products and to also ensure that products remain fit for purpose. One of the PIOB’s responsibilities, among others, is to determine the market data that is utilized in the Benchmark Provider’s pricing and valuation processes. This includes any
approval of new sources of market data and the suspension or discontinuation of existing sources of market data. Additionally, the Benchmark Provider’s PIOB regularly reviews eligible trading platforms, including any new sources of pricing
information. As it pertains to the impact on the NAV of the Trust, the continuous monitoring of pricing data helps ensure that pricing accurately reflects the economic reality that the benchmark is intended to measure. A change in the Benchmark
Pricing Sources may result in a change in the Trust’s NAV.
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The Benchmark Provider launched the Benchmark in August 2024, and the Benchmark has been back-populated to August 24, 2020. The below graph compares the historical Benchmark returns to the prices
on each of the Benchmark Pricing Sources with U.S. Dollar-SOL trading pairs from January 1, 2024 to June 1, 2025.
As is evident from the foregoing graph and as expected given arbitrage activity across trading platforms, the historic Benchmark returns have aligned closely to the prices of SOL on each of the
Benchmark Pricing Sources with U.S. Dollar-SOL trading pairs.
The below table contains the market share and volume information for each Benchmark Pricing Source with U.S. Dollar-SOL trading pairs. The below table shows the percentage that each Benchmark
Pricing Source’s volume represents out of the sum of the volumes of all of the Benchmark Pricing Sources with U.S. Dollar- Solana trading pairs. Note that the Benchmark Provider will prioritize U.S. Dollar trading pairs before using trading platforms
where other pairs, such as stablecoins, are used:
|
Lukka Prime Solana Volumes SOLN-USD (Jan 1, 2024 to Sept 30, 2025)
|
||
|
Trading Platform
|
Volume (SOLN)
|
Volume (%)
|
|
Bitfinex
|
16,655,013
|
1.33%
|
|
Bitstamp
|
44,242,422
|
3.53%
|
|
Bullish
|
6,360,204
|
0.51%
|
|
Coinbase
|
743,432,916
|
59.27%
|
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|
Lukka Prime Solana Volumes SOLN-USD (Jan 1, 2024 to Sept 30, 2025)
|
||
|
Trading Platform
|
Volume (SOLN)
|
Volume (%)
|
|
Crypto.com
|
145,226,394
|
11.58%
|
|
Gemini
|
21,097,082
|
1.68%
|
|
itBit
|
2,661,912
|
0.21%
|
|
Kraken
|
228,893,543
|
18.25%
|
|
LMAX
|
38,844,161
|
3.10%
|
|
OKEx
|
6,963,458
|
0.56%
|
Trading platforms with U.S. Dollar trading pairs:
Bitfinex: A British Virgin Islands-based trading platform registered as a Money Services Business with the Financial Crimes Enforcement
Network. Bitfinex is also licensed as a Digital Asset Service Provider from the Central Reserve Bank of El Salvador.
Bitflyer: A Japan-based trading platform registered as a Virtual Currency Exchange from the Japan Financial Services Agency. Bitflyer is
also licensed as a virtual currency business under the NYSDFS BitLicense.
Bittrex: A Liechtenstein-based trading platform registered as a Money Services Business with the Financial Crimes Enforcement Network.
Bittrex is also licensed in Bermuda and Liechtenstein. On November 20, 2023, Bittrex announced its intention to wind down its operations and disable trading activity effective December 4, 2023. On November 21, 2023, Bittrex was removed as a Benchmark
Pricing Source as a result of its announcement.
Bitstamp: A U.K.-based trading platform registered as a Money Services Business with the Financial Crimes Enforcement Network. Bitstamp is
also licensed as a virtual currency business under the NYSDFS BitLicense.
Coinbase: A U.S.-based trading platform registered as a Money Services Business with the Financial Crimes Enforcement Network. Coinbase is
also licensed as a virtual currency business under the NYSDFS BitLicense.
Crypto.com: A Singapore-based trading platform with a Digital Token License from the Monetary Authority of Singapore. Crypto.com is also
registered as a Money Services Business with the Financial Crimes Enforcement Network.
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Gemini: A U.S.-based trading platform registered as a Money Services Business with the Financial Crimes Enforcement Network. Gemini is
also licensed as a virtual currency business under the NYSDFS BitLicense.
itBit: A U.S.-based trading platform registered as a Money Services Business with the Financial Crimes Enforcement Network. itBit is also
chartered by the NYSDFS as a limited purpose trust company.
Kraken: A U.S.-based trading platform registered as a Money Services Business with the Financial Crimes Enforcement Network. Kraken is
also registered as a Digital Currency Exchange Provider with the Australian Transaction Reports and Analysis Centre.
LMAX: A Gibraltar-based trading platform registered as a Money Services Business with the Financial Crimes Enforcement Network. LMAX is
also registered as a DLT provider by the Gibraltar Financial Services Commission.
Trading platforms without U.S. Dollar trading pairs:
Binance: A Cayman Islands-based trading platform with a Digital Asset Service Provider registration from the Autorité des Marchés
Financiers, MVP Preparatory License from Dubai’s Virtual Assets Regulatory Authority and a variety of other licenses across the European and Asia-Pacific regions.
Gate.io: A Cayman Islands-based trading platform registered as a Money Services Business with the Financial Crimes Enforcement Network.
Gate.io is also registered as a DLT provider by the Gibraltar Financial Services Commission and a variety of other licenses across the European and Asia-Pacific regions.
HitBTC: A British Virgin Islands-based trading platform that currently does not hold any licenses from any licensing authorities.
Huobi: A Gibraltar-based trading platform with a Distributed Ledger Technology Provider License from the Gibraltar Financial Services
Commission. Huobi is also registered as a Digital Currency Exchange Provider with the Australian Transaction Reports and Analysis Centre.
KuCoin: A Seychelles-based trading platform that currently does not hold any licenses from any licensing authorities.
MEXC Global: A Seychelles-based trading platform registered as a Digital Currency Exchange Provider with the Australian Transaction
Reports and Analysis Centre and a variety of other licenses across the European region.
OKX (fka OKEx): A Seychelles-based trading platform with an MVP Preparatory License from Dubai’s Virtual Assets Regulatory Authority.
Poloniex: A Seychelles-based trading platform that currently does not hold any licenses from any licensing authorities.
The Trust confirms that the Sponsor may, in its sole discretion, change either the Benchmark or Benchmark Provider without Shareholder approval.
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In the event that the Benchmark Provider changes the methodology of the Benchmark, the Benchmark Provider will inform the Sponsor of the nature of the change and the timeline for implementation.
The Sponsor will notify investors of material changes to the Benchmark, or the Sponsor’s decision to change the Benchmark or the Benchmark Provider, by providing notice to investors and market participants as promptly as practicable through some
combination of press release, website disclosure, 8-K filing or registration statement supplement, in addition to any notice to the listing exchange required under applicable listing rules.
In determining the value of SOL, the Benchmark Provider applies a five-step weighting process for identifying the principal trading platform for SOL and the last price on that trading platform. A
Base Exchange Score (“BES”) that takes into account the criteria above is assigned to each Benchmark Pricing Source in order to select the most appropriate primary trading platform and then an executed trading platform price is determined at 4:00
p.m. ET. The characteristics of each trading platform are weighted as follows for their BES:
| • |
Oversight (35%): This score reflects the rules in place to protect and to give access to investors and is a function of a variety of factors. The score assigned for trading platform oversight will
depend on parameters such as jurisdiction, regulation, “Know Your Customer and Anti-Money Laundering Compliance” (KYC/AML), etc. Benchmark Participants will receive a higher score if they are subject to more stringent regulation, including
comprehensive KYC/AML screening, and the level of currency oversight and regulation in their home jurisdiction.
|
| • |
Microstructure Efficiency (30%): The second trading platform characteristic is microstructure efficiency. The Benchmark takes the effective bid-ask spread as a proxy for efficiency. For each trading
platform and currency pair, the Benchmark takes an estimate of the “effective spread,” which is a common approach to measuring trade execution costs.
|
| • |
Data Integrity (25%): Data Integrity provides a metric of how consistent a trading platform’s trading activity is with its underlying market microstructure. This is done by aligning a trading
platform’s trade data for a given product with quotes data pertaining to the same market. Trading platforms whose traded prices deviate outside the spreads indicated by the quotes data are penalized. This would potentially expose nefarious
actions such as wash trading or other potential manipulation of data. The metric is computed by joining a sample of trades with quotes by trading platform, product and time. With this, the Benchmark Provider computes the maximum observed ask
price and the minimum observed bid price over a rolling window in time. This serves to define a range of possible trade prices that would be expected based on the quotes data. The Benchmark Provider then aggregates this dataset by trading
platform, computing the fraction of transactions where the trade price was within the expected range as computed in the prior step. This fraction is multiplied by 100 to give the data integrity score.
|
| • |
Data Transparency (10%): Transparency is the term used for a quality score that is determined by the level of detail of the data offered by a trading platform. Similar to the jurisdiction hierarchy,
Level 1, the highest level in the transparency hierarchy, is assigned 100 points and is reduced by 20 points for each subsequent lower level. The most transparent (Level 1) trading platforms offer order-level data, followed by order book
(Level 2), trade-level (Level 3), candles (Level 4), and then no data (Level 5).
|
For financial reporting purposes, the Trust will determine the principal market for SOL in accordance with ASC Topic 820-10, and such determination is considered from the Trust’s perspective. The
Benchmark follows a methodology designed to identify the principal market for SOL at a given time. Procedures will be implemented by the Sponsor to review and confirm the prices utilized to value SOL reflect fair value in
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accordance with ASC Topic 820 and will be reviewed by the Sponsor’s Valuation Committee on a periodic basis.
With respect to the Trust’s Authorized Participants or their affiliates, the Trust notes that it has no authority over which trading platforms the Authorized Participants or their affiliates might
transact on, although the Trust expects that most Authorized Participants or their affiliates may transact on several of the trading platforms that are Benchmark Pricing Sources for the Benchmark Provider. The Trust notes that for transactions in
which it is selling SOL, it may do so in principal-to-principal transactions arranged by the Execution Agent, although the Trust is eligible to execute trades on all of the trading platforms used by the Benchmark Provider. While the principal to
principal market is the market in which the Execution Agent, on the Trust’s behalf, would normally transact for sales of SOL, in considering all information reasonably available in accordance with the guidance in ASC 820-10-35-5A, the Trust notes
that the identification of a principal market is completed by the Benchmark Provider based on a variety of different criteria including but not limited to trading platforms’ oversight and governance frameworks, microstructure efficiency, trading
volume, data transparency and data integrity. The Trust views this evidence to the contrary as appropriate basis to determine a primary market that is not the principal-to-principal market, in accordance with the guidance in ASC 820-10-35-5A. The
Sponsor performed extensive back testing of the Benchmark, comparing the Benchmark Provider’s historical designation of the primary trading platform and the daily pricing from said trading platform, relative to where the Trust is expected to
transact. The Sponsor concluded that the methodology consistently resulted in a principal market that aligns with the Trust’s expected transaction activities. Procedures will be implemented to review and confirm the above on at least a quarterly
basis, adjusting the frequency of that review if determined necessary by the Sponsor’s Valuation Committee.
The Trust and the Sponsor are not responsible for the calculations performed by the Benchmark Provider or for the development or implementation of the Benchmark Provider’s methodologies.
WITHOUT LIMITING THE FOREGOING, NONE OF LUKKA INC., THE SPONSOR, OR ANY OF THEIR RESPECTIVE SUBSIDIARIES OR AFFILIATES SHALL HAVE ANY LIABILITY FOR
ANY ERRORS,
OMISSIONS, DELAYS OR INTERRUPTIONS IN THE BENCHMARK PRICING PROCESS NONE OF LUKKA INC., THE SPONSOR, OR ANY OF THEIR RESPECTIVE SUBSIDIARIES OR AFFILIATES MAKES ANY EXPRESS OR IMPLIED WARRANTIES,
AND EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH RESPECT TO THE PRICING SERVICES OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO EVENT SHALL LUKKA INC., THE SPONSOR,
OR ANY OF THEIR RESPECTIVE SUBSIDIARIES OR AFFILIATES HAVE ANY LIABILITY FOR ANY LOST PROFITS OR INDIRECT, PUNITIVE, SPECIAL OR CONSEQUENTIAL DAMAGES OR LOSSES, EVEN IF NOTIFIED OF THE POSSIBILITY THEREOF. THERE ARE NO THIRD-PARTY BENEFICIARIES OF
ANY AGREEMENTS OR ARRANGEMENTS BETWEEN LUKKA INC. AND THE SPONSOR OTHER THAN THEIR RESPECTIVE SUBSIDIARIES AND AFFILIATES.
The Trust’s Expenses
The Trust will pay the Sponsor a unified fee of 0.25% per annum (the “Sponsor Fee”) as compensation for services performed under the Trust Agreement (as defined herein). The Trust’s only
ordinary, recurring expense is the Sponsor Fee.
The Sponsor Fee will be accrued daily and paid monthly in arrears in U.S. dollars, and will be calculated by the Administrator. The Sponsor may, at its sole discretion and from time to time,
waive all or a portion
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of the Sponsor’s Fee for stated periods of time. The Sponsor is under no obligation to waive any portion of its fees and any such waiver shall create no obligation to waive any such fees during
any period not covered by the waiver. The Administrator will calculate the Sponsor Fee on a daily basis by applying the 0.25% annualized rate to the Trust’s total net assets. To cover the Sponsor Fee, and extraordinary expenses not assumed by the
Sponsor, the Sponsor or its delegate will cause the Trust (or its delegate) to instruct the Execution Agent to convert SOL held by the Trust into U.S. dollars. At the direction of the Trust, the Execution Agent will seek to sell SOL at
approximately the price at which it is valued by the Trust and in the smallest amounts required to permit such payments as they become due, with the intention of minimizing the Trust’s holdings of assets other than SOL. Accordingly, the amount of
SOL to be sold may vary from time to time depending on the level of the Trust’s expenses and liabilities and the market price of SOL. Any cash held by the Trustee will not bear any interest. Each sale of SOL by the Trust to pay the Sponsor Fee or
other Trust expenses will give rise to taxable gain or loss to Shareholders. See “U.S. Federal Income Tax Consequences—Taxation of U.S. Shareholders.” The NAV of the Trust and the number of SOL represented by a Share will decline each time the
Trust accrues the Sponsor Fee or any Trust expenses not assumed by the Sponsor. The Trust is not responsible for paying any costs associated with the transfer of SOL to or from the Trust in connection with paying the Sponsor Fee or in connection
with creation and redemption transactions.
Except as noted below, the Sponsor has agreed to pay all of the Trust’s ordinary expenses out of the Sponsor Fee, including, but not limited to, the Trustee’s fees, the fees of the Administrator
and the Transfer Agent, the fees of the Solana Custodian, the fees of the Execution Agent, Exchange listing fees, SEC registration fees, printing and mailing costs, legal costs and audit fees. The Sponsor’s payment of such Trust expenses is not
subject to a cap. The Sponsor also paid the costs of the Trust’s organization.
Subject to the Staking Condition being met, the Trust will receive a portion of the Staking Rewards earned through its staking program in the form of SOL. The remaining portion of the Staking
Rewards will be retained by the Staking Provider facilitating the staking program. The expenses of staking the Trust’s SOL will be paid from the proceeds of the Trust's staking program.
The Trust may incur certain extraordinary expenses that are not assumed by the Sponsor. These include, but are not limited to, taxes and governmental charges, any applicable brokerage commissions,
financing fees, Solana network fees and similar transaction fees, expenses and costs of any extraordinary services performed by the Sponsor (or any other service provider) on behalf of the Trust to protect the Trust or the interests of Shareholders
(including, for example, in connection with any fork of the Solana blockchain), any indemnification of the Sponsor, Cash Custodian, Solana Custodian, Administrator or other agents, service providers or counterparties of the Trust and extraordinary
legal fees and expenses, including any legal fees and expenses incurred in connection with litigation, regulatory enforcement or investigation matters.
CALCULATION OF NAV
General
The Shares are valued each Business Day as of 4:00 p.m. ET. The value of SOL held by the Trust is determined based on the fair market value price for SOL determined by the Benchmark Provider. In
this regard, the Benchmark Provider seeks to identify a “principal market” for SOL each day, by evaluating eligible SOL trading platforms across a variety of different criteria, including the trading platforms’ oversight and governance frameworks,
microstructure efficiency, trading volume, data transparency and data integrity. The Sponsor believes that use of the Benchmark mitigates against idiosyncratic exchange
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risk, as the failure of any individual Benchmark Pricing Source will not materially impact pricing for the Trust. It also allows the Administrator to calculate the NAV in a manner that
significantly deters manipulation.
As discussed, the fact that the NAV is based on data from multiple trading platforms makes manipulation more difficult in a well-arbitraged and fractured market, as a malicious actor would need to
manipulate multiple trading platforms simultaneously to impact the NAV.
The Trust’s NAV is an amount denominated in U.S. dollars and is not utilized in determining the number of Shares that an Authorized Participant will receive in creating Shares, or the value of SOL
that an Authorized Participant will receive in redeeming Shares, as those transactions are based on the Trust’s SOL holdings per Share. See “Creation and Redemption of Shares.”
The Trust’s NAV is calculated by:
| • |
taking the current market value of its SOL (calculated by the Benchmark Provider) and any other assets;
|
| • |
subtracting any liabilities (including accrued but unpaid expenses); and
|
| • |
dividing that total by the total number of outstanding Shares.
|
The Administrator calculates the NAV of the Trust once each Business Day. The end-of-day SOL price is calculated using the execution price of SOL on the principal market selected by the Benchmark
Provider as of 4:00 p.m. ET. However, NAVs are not officially struck until later in the day (often by 5:30 p.m. ET and almost always by 8:00 p.m. ET). The daily valuation process will be overseen by the Sponsor’s Valuation Team. The pause between
4:00 p.m. ET and 5:30 p.m. ET (or later) provides the Sponsor’s Valuation Team an opportunity to algorithmically detect, flag, investigate, and address unusual pricing should it occur.
Consistent with the daily pricing of all assets held in the Sponsor’s funds that are registered under the 1940 Act, daily valuation oversight resides with the Sponsor’s Valuation Team. The
Sponsor’s Valuation Team is an independent control function within the Sponsor with the responsibility for oversight of asset pricing. Standardized controls (such as exception-based reports) are in place and run daily prior to NAV dissemination to
detect “unusual pricing.” This includes, but is not limited to, missing price reports, unchanged price reports, and large daily price variance reports. Specifically with respect to the Trust, the Sponsor’s Valuation Team will monitor the pricing of
the Benchmark to ensure that the Trust’s NAV is determined based on consistent, accurate pricing that the Sponsor believes is reflective of the value of the Trust’s SOL, and also a transparent methodology and process. In addition, the Sponsor’s
Valuation Team may seek information and recommendations from the Execution Agent, the Benchmark Provider, the Solana Custodian, the Prime Broker or others regarding SOL valuation issues and potential SOL market events.
All price updates are communicated to the Administrator only by the Sponsor’s pricing team. No members of the Sponsor’s investment or other business-related teams are authorized to provide pricing
instructions to the Administrator. Price updates are communicated to the Administrator prior to NAV finalization and therefore would be incorporated in that day’s NAV.
The Sponsor’s Valuation Team will monitor for significant events related to digital assets that may impact the value of the Trust’s SOL, and will determine in good faith whether to fair value the
Trust’s SOL on a given day based on whether certain pre-determined criteria have been met. For example, if the price of SOL represented by the Benchmark deviates by more than 25 basis points from the level established by one or
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more Alternative Benchmarks, then the Sponsor’s Valuation Team may (but is under no obligation to) perform additional analyses and make a recommendation as to whether to utilize an Alternative
Benchmark. The Sponsor’s Valuation Team may also fair value the Trust’s SOL using observed market transactions from various trading platforms, including some or all of the trading platforms included in the Benchmark.
In the event the Benchmark becomes unavailable or if the Sponsor or Administrator determines that the Benchmark does not reflect an accurate SOL price, an independent assessment to designate the
Trust’s principal market is performed by looking at pricing and transaction volume information from eligible trading platforms in which the Trust transacts only incorporating those. Typically, this will involve a multi-step process conducted by the
Sponsor’s Valuation Team to identify the principal market for SOL on a given day:
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First, a list of eligible SOL trading platforms in which the Trust transacts is compiled and ranked in descending order based on the prior twelve months of volume of SOL traded on each trading platform.
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Second, any trading platforms that do not comply with licensing requirements which are applicable to the Trust and the Authorized Participants are excluded.
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Third, reviews of intra-day pricing are completed to identify any material variances which may impact the price information provided by a particular trading platform. A SOL trading platform is then selected as the Trust’s principal market
and pricing consumed from that trading platform. Even if the Benchmark is deemed to be available and reliable, the aforementioned process is completed periodically as deemed necessary by the Sponsor’s Valuation Team in order to assess and
evaluate the effectiveness of the process.
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The SOL markets are generally open on days when U.S. markets are closed, which means that the value of the SOL owned by the Trust could change on days when Shares cannot be bought or sold.
The website for the Trust, www.invesco.com/QSOL, which will be publicly accessible at no charge, will contain the following information: (a) the prior Business Day’s NAV; (b) the prior
Business Day’s official closing price; (c) calculation of the premium or discount of such Cboe official closing price against such NAV; (d) data in chart form displaying the frequency distribution of discounts and premiums of the Cboe official
closing price against the NAV, within appropriate ranges for each of the four previous calendar quarters (or for the life of the Trust, if shorter); (e) the Prospectus; and (f) other applicable quantitative information. The Administrator will also
disseminate the Trust’s SOL holdings on a daily basis on the Trust’s website. The NAV for the Trust will be calculated by the Administrator once a day and will be disseminated daily to all market participants at the same time. Quotation and last sale
information regarding the Shares will be disseminated through the facilities of the Consolidated Tape Association (“CTA”).
The Trust’s periodic financial statements may not utilize the net asset value of the Trust determined by reference to the Benchmarks to the extent the methodology used to calculate the Benchmark
is deemed not to be consistent with GAAP. The Trust’s periodic financial statements will be prepared in accordance with the Financial Accounting Standards Board (“FASB”) ASC Topic 820 and utilize an exchange-traded price from the Trust’s principal
market for SOL on the Trust’s financial statement measurement date. The Sponsor will determine in its sole discretion the valuation sources and policies used to prepare the Trust’s financial statements in accordance with GAAP. The Trust intends to
engage a third-party vendor to obtain a price from a principal market for SOL, which will be determined and designated by such third-party vendor daily based on its consideration of several trading platform characteristics, including oversight, and
the volume and frequency of trades. Under GAAP, such a price is expected to be deemed a Level 1 input in accordance with the ASC Topic 820 because it is expected to be a quoted price in an active market for identical assets or liabilities.
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To determine which market is the Trust’s principal market (or in the absence of a principal market, the most advantageous market) for purposes of determining fair value in preparing the Trust’s
financial statements, the Trust follows ASC 820-10, which outlines the application of fair value accounting. ASC 820-10 determines fair value to be the price that would be received for SOL in a current sale, which assumes an orderly transaction
between market participants on the measurement date. ASC 820-10 requires the Trust to assume that SOL is sold in its principal market to market participants or, in the absence of a principal market, the most advantageous market. Market participants
are defined as buyers and sellers in the principal or most advantageous market that are independent, knowledgeable, and willing and able to transact. The Trust may transact through Solana Counterparties, in multiple markets, and its application of
ASC 820-10 reflects this fact. The Trust anticipates that, while multiple venues and types of markets will be available to the Solana Trading Counterparties from whom the Sponsor acquires or disposes of the Trust’s SOL, the principal market in each
scenario is determined by looking at the market-based level of volume and SOL trading activity. Solana Counterparties may transact in a Brokered Market, a Dealer Market, Principal-to-Principal Markets and Exchange Markets, each as defined in the FASB
ASC Master Glossary. Based on information reasonably available to the Trust, Exchange Markets have the greatest volume and level of activity for the asset. The Trust therefore looks to accessible Exchange Markets as opposed to the Brokered Market,
Dealer Market and Principal-to-Principal Markets to determine its principal market. As a result of the aforementioned analysis, an Exchange Market has been selected as the Trust’s principal market. The Trust determines its principal market (or in the
absence of a principal market the most advantageous market) on a quarterly basis to determine which market is its Principal Market for the purpose of calculating fair value for the creation of quarterly and annual financial statements.
The process that the Sponsor has developed for identifying a principal market, as prescribed in ASC 820-10, which outlines the application of fair value accounting. The process begins by
identifying publicly available, well established and reputable SOL trading platforms (Exchange Markets, as defined in the FASB ASC Master Glossary), which are selected by the Sponsor and its affiliates in their sole discretion. Those markets include
Binance, Bitfinex, Bitflyer, Bitstamp, Bullish, Coinbase Pro, Crypto.com, Gate.io, Gemini, HitBTC, Huobi, itBit, Kraken, KuCoin, LMAX, MEXC Global, OKx, and Poloniex. The Sponsor then, through a service provider, calculates on each valuation period,
the highest volume venue during the 60-minute period prior to 4:00 ET for SOL. The Sponsor then identifies that market as the principal market for SOL during that period, and uses the price for SOL from that venue at 4:00 ET as the principal market
price.
Intraday Indicative Value
In order to provide updated information relating to the Trust for use by Shareholders and market professionals, the Benchmark Provider will calculate and disseminate during each day the NYSE is
open for regular trading an updated intraday indicative value (“IIV”). The IIV will be calculated by using the prior day’s closing NAV as a base and updating that value throughout the trading day to reflect changes in the most recently reported price
of SOL as reported by the Benchmark Provider or another reporting service.
The IIV disseminated during each day the NYSE is open for regular trading should not be viewed as an actual real time update of the NAV, because NAV is calculated only once at the end of each
trading day based upon the relevant end of day value of the Trust’s SOL. The IIV will be calculated every second from 9:30 a.m. to 4:00 p.m. ET and disseminated on a per Share basis every 15 seconds during each day the NYSE is open for regular
trading. Lukka Inc. will disseminate the IIV value through the facilities of CTA/CQ High Speed Lines. In addition, the IIV will be published on the Exchange’s website and will be available through on-line information services such as Bloomberg and
Reuters. The IIV as of the time that the NAV is calculated on a given day may differ from the NAV for such day due to the differences in the time window of trades used to calculate each price (the NAV uses a 15-minute window, whereas the IIV draws
prices from the last trade on each trading platform in an effort to produce a relevant, real-time price).
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There are many instances in the market today where the IIV as of the time that the NAV is calculated on a given day and the NAV of an ETF for such day are subtly different, whether due to the
calculation methodology, market hours overlap or other factors. The Sponsor has seen limited or no negative impact on trading, liquidity or other factors for exchange-traded funds in this situation. The Sponsor believes that the IIV will closely
track the globally integrated SOL price as reflected on the Benchmark Pricing Sources.
Dissemination of the IIV provides additional information that is not otherwise available to the public and is useful to Shareholders and market professionals in connection with the trading of the
Shares on the Exchange. Shareholders and market professionals will be able throughout the trading day to compare the market price of the Shares and the IIV. If the market price of the Shares diverges significantly from the IIV, market professionals
will have an incentive to execute arbitrage trades. For example, if the Trust appears to be trading at a discount compared to the IIV, a market professional could buy Shares on the Exchange and sell short futures contracts. Such arbitrage trades can
tighten the tracking between the market price of the Shares and the IIV, and thus can be beneficial to all market participants.
Stock Splits
The Sponsor reserves the right to adjust the Share price of the Trust in the future to maintain convenient trading ranges for Shareholders in the secondary market. Any adjustments would be
accomplished through stock splits or reverse stock splits. Such splits would decrease (in the case of a split) or increase (in the case of a reverse split) the proportionate NAV, but would have no effect on the net assets of the Trust or the
proportionate voting rights of Shareholders or the value of any Shareholder’s investment.
Other Assets
The fair values of any liquid assets held by the Trust primarily in the form of cash and certificates of deposits are included in the determination of NAV.
Liabilities
The fair value of the Trust’s liabilities is included in the determination of NAV. These liabilities are expected generally to consist only of the Sponsor Fee, although liabilities may also include
extraordinary expenses from time to time. See “The Trust—The Trust’s Expenses.”
Impact of Trust Expenses on the Trust’s NAV
The amount of SOL represented by the Shares will be reduced during the life of the Trust each time the Trust accrues the Sponsor Fee, and to pay for any extraordinary expenses. This dynamic will
occur irrespective of whether the value of the Trust’s assets, or the trading price of the Shares, rises or falls. Staking activities could have the opposite effect if the Staking Condition is satisfied and the Trust is successful in operating its
staking program.
ADDITIONAL INFORMATION ABOUT THE TRUST
The Trust
The Trust is a Delaware statutory trust, formed on June 12, 2025, pursuant to the Delaware Statutory Trust Act (“DSTA”). The Trust continuously issues common shares representing fractional
undivided beneficial interest in and ownership of the Trust that may be purchased and sold on the Exchange. The Trust operates pursuant to its Amended and Restated Declaration of Trust and Trust Agreement, dated as of [ ], 2025 (the
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“Trust Agreement”). CSC Delaware Trust Company, a Delaware trust company, is the Delaware trustee of the Trust. The Trust is managed and controlled by the Sponsor.
The Trust is not registered as an investment company under the 1940 Act and is not required to register under such act. The Trust will not hold or trade in commodity futures contracts regulated by
the CEA, as administered by the CFTC. The Trust is not a commodity pool for purposes of the CEA and neither the Sponsor, nor the Trustee is subject to regulation as a commodity pool operator or a commodity trading adviser in connection with the
Shares.
The Trust is passively-managed and the Sponsor does not actively manage the SOL held by the Trust. This means that the Sponsor does not sell SOL at times when its price is high or acquire SOL at
low prices in the expectation of future price increases. It also means that the Sponsor does not make use of any of the hedging techniques available to professional SOL investors to attempt to reduce the risks of losses resulting from price changes.
The Trust will not utilize leverage, derivatives or any similar arrangements in seeking to meet its investment objective; however, the Trust may utilize a short term credit facility or an alternative liquidity arrangement solely for the purposes of
obtaining funds necessary to meet redemptions from the Trust.
The number of outstanding Shares is expected to increase and decrease from time to time as a result of the creation and redemption of Creation Baskets. The Trust creates and redeems Shares from
time to time, but only in one or more Creation Baskets. Creation and redemption transactions will be conducted in exchange for SOL in-kind or cash.
The Trust has no fixed termination date.
Dissolution of the Trust
The Trust will dissolve at the direction of the Sponsor, and the Sponsor will promptly notify Shareholders of such dissolution, if any of the following dissolution events occur:
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Shares are delisted from the Exchange and are not approved for listing on another national securities exchange within five Business Days of their delisting;
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180 days have elapsed since the Trustee notified the Sponsor of the Trustee’s election to resign or since the Sponsor removed the Trustee, and a successor trustee has not been appointed and accepted its appointment;
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the SEC determines that the Trust is an investment company under the 1940 Act, and the Sponsor has made the determination that dissolution of the Trust is advisable;
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the CFTC determines that the Trust is a commodity pool under the CEA, and the Sponsor has made the determination that dissolution of the Trust is advisable;
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the Trust is determined to be a “money service business” under the regulations promulgated by FinCEN under the authority of the U.S. Bank Secrecy Act, as amended (the “BSA”) and is required to comply with certain FinCEN regulations
thereunder or is determined to be a “money transmitter” (or equivalent designation) under the laws of any state in which the Trust operates and is required to seek licensing or otherwise comply with state licensing requirements, and the
Sponsor has made the determination that dissolution of the Trust is advisable;
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a U.S. regulator requires the Trust to shut down or forces the Trust to liquidate its SOL;
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SOL is determined to be a “security” and is subject to regulation under U.S. federal securities laws;
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any ongoing event exists that either prevents the Trust from making or makes impractical the Trust’s reasonable efforts to make a fair determination of the price of SOL for purposes of determining the NAV of the Trust;
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the Sponsor determines that the aggregate net assets of the Trust in relation to the operating expenses of the Trust make it unreasonable or imprudent to continue the business of the Trust;
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the Trust fails to qualify for treatment, or ceases to be treated, as a “grantor trust” under the Internal Revenue Code of 1986, as amended (the “Code”) or any comparable provision of the laws of any State or other jurisdiction where that
treatment is sought, and the Sponsor determines that, because of that tax treatment or change in tax treatment, dissolution of the Trust is advisable;
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60 days have elapsed since Depository Trust Company (“DTC”) or another depository has ceased to act as depository with respect to the Shares, and the Sponsor has not identified another depository that is willing to act in such capacity;
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the Trustee elects to dissolve the Trust after the Sponsor is conclusively deemed to have resigned effective immediately as a result of the Sponsor being adjudged bankrupt or insolvent, or a receiver of the Sponsor or of its property being
appointed, or a trustee or liquidator or any public officer taking charge or control of the Sponsor or of its property or affairs for the purpose of rehabilitation, conservation or liquidation and a successor sponsor has not been appointed;
or
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the Sponsor elects to dissolve the Trust after the Trustee, Execution Agent, Administrator or the Solana Custodian (or any successor trustee, administrator or custodian) resigns or otherwise ceases to be the trustee, administrator or
custodian of the Trust, as applicable, and no replacement trustee, administrator and/or custodian acceptable to the Sponsor is engaged.
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In addition, the Trust may be dissolved at any time for any reason by the Sponsor in its sole discretion. In respect of dissolution events that rely on Sponsor determinations to dissolve the Trust
(e.g., if the SEC determines that the Trust is an investment company under the 1940 Act; the CFTC determines that the Trust is a commodity pool under the CEA; the Trust is determined to be a money transmitter under the regulations promulgated by
FinCEN; the Trust fails to qualify for treatment, or ceases to be treated, as a grantor trust for U.S. federal income tax purposes; or, following a resignation by a trustee or custodian, the Sponsor determines that no replacement is acceptable to
it), the Sponsor may consider, without limitation, the profitability to the Sponsor and other service providers of the operation of the Trust, any obstacles or costs relating to the operation or regulatory compliance of the Trust and the ability to
market the Trust to investors. To the extent that the Sponsor determines to continue operation of the Trust following a determination’s triggering event, the Trust will be required to alter its operations to comply with the triggering event. In the
instance of a determination that the Trust is an investment company, the Trust and the Sponsor would have to comply with the regulations and disclosure and reporting requirements applicable to investment companies and investment advisers. In the
instance of a determination that the Trust is a commodity pool, the Trust and the Sponsor would have to comply with regulations and disclosure and reporting requirements applicable to commodity pools and commodity pool operators or commodity trading
advisers. In the event of a determination that the Trust is a money transmitter, the Trust and the Sponsor will have to comply with applicable federal and state registration and regulatory requirements for money transmitters and/or money service
businesses. In the event that the Trust ceases to qualify for treatment as a grantor trust for U.S. federal income tax purposes, the Trust will be required to alter its disclosure and tax reporting procedures and may no longer be able to operate or
to rely on pass-through tax treatment. In each such case and in the case of the Sponsor’s determination as to whether a potential successor trustee or custodian is acceptable to it, the Sponsor will not be liable to anyone for its determination of
whether to continue or to dissolve the Trust.
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If the Trust is required to terminate and liquidate, or the Sponsor determines in accordance with Chapter 38 of Title 12 of the Delaware Code, 12 Del. C. § 3801 et seq. (the “Delaware Act”) that it
is appropriate to terminate and liquidate the Trust, the Sponsor will instruct the Execution Agent to sell the Trust’s SOL and will distribute to the Shareholders any amounts of the cash proceeds of the liquidation remaining after the satisfaction of
all outstanding liabilities of the Trust and the establishment of reserves for applicable taxes, other governmental charges and contingent or future liabilities as the Sponsor will determine. Shareholders of record on the record date fixed by the
Transfer Agent for a distribution will be entitled to receive their pro rata portions of any distribution. Following the liquidation of the Trust’s SOL, any remaining outstanding Shares will be redeemed for cash and distributed to Shareholders in
accordance with the provisions of the Trust Agreement.
Upon dissolution of the Trust, following completion of winding up of its business by the Sponsor, the Trustee, upon written directions of the Sponsor, will cause a certificate of cancellation of
the Trust’s Certificate of Trust to be filed in accordance with applicable Delaware law. Upon completion of the winding up of the business of the Trust, the Sponsor will be discharged from all obligations under the Trust Agreement except for its
certain obligations that survive dissolution of the Trust Agreement.
Amendments
The Trust Agreement provides that it may be amended by the Sponsor in its sole discretion and without the Shareholders’ consent. Any such amendment to the Trust Agreement will be effective on such
date as designated by the Sponsor in its sole discretion, except that any amendment that imposes or increases any fees or charges or prejudices a substantial existing right of the Shareholders will not become effective until thirty (30) days after
notice of such amendment is given to the Shareholders. However, any amendment to the Trust Agreement that affects the rights or duties of the Trustee will require the Trustee’s prior written consent. Every Shareholder, at the time any amendment so
becomes effective, will be deemed, by continuing to hold any Shares or an interest therein, to consent and agree to such amendment and to be bound by the Trust Agreement as amended thereby. The Sponsor does not expect to make any amendment that would
impair the right of Authorized Participants to surrender Creation Baskets and receive therefore the amount of Trust assets represented thereby (less fees in connection with the surrender of Shares and any applicable taxes or other governmental
charges), except in order to comply with mandatory provisions of applicable law.
THE TRUST’S SERVICE PROVIDERS
The Sponsor
The Sponsor arranged for the creation of the Trust and is responsible for the ongoing registration of the Shares for their public offering and the listing of Shares on the Exchange. The Sponsor
will not exercise day-to-day oversight over the Trustee or the Solana Custodian. Except as noted in “The Trust—The Trust’s Expenses” above, the Sponsor has agreed to pay all of the Trust’s ordinary expenses out of the Sponsor Fee, including, but not
limited to, the Trustee’s fees, the Administrator’s fee, the Transfer Agent’s fee, the Solana Custodian’s fee, the Execution Agent’s fees, Exchange listing fees, SEC registration fees, printing and mailing costs, legal costs and audit fees. The
Sponsor also paid the costs of the Trust’s organization. The Sponsor is a wholly-owned subsidiary of Invesco Ltd. Invesco Ltd. and its subsidiaries, including the Sponsor, are an independent global investment management group.
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The Sponsor has significant experience overseeing exchange-traded products, including both 1940 Act-registered exchange-traded products and non-1940 Act-registered
exchange-traded products, including a spot bitcoin exchange-traded product and a spot ether exchange-traded product. As of December 31, 2024, the Sponsor oversees over 200 exchange-traded products with assets over $700 billion. The Sponsor’s
relatively limited experience in this specific field may not fully equip them to navigate the complexities of digital asset markets effectively, but by managing its own products and through its relationships with the Execution Agent and the Solana
Custodian, the Sponsor has amassed significant knowledge regarding SOL and the digital asset markets.
The Trustee
CSC Delaware Trust Company, a Delaware trust company located at 251 Little Falls Drive, Wilmington, DE 19808, acts as the trustee of the Trust as required to create a Delaware statutory trust in
accordance with the Trust Agreement and the DSTA. The Trustee is appointed to serve as the trustee of the Trust in the State of Delaware for the sole purpose of satisfying the requirement of Section 3807(a) of the DSTA that the Trust have at least
one trustee with a principal place of business in the State of Delaware.
General Duty of Care of Trustee
The Trust Agreement provides that, to the extent that, at law or at equity, the Trustee has duties (including fiduciary duties) and liabilities relating thereto to the Trust or the Sponsor, such
duties and liabilities are eliminated and replaced by the duties and liabilities of the Trustee expressly set forth in the Trust Agreement. Under the Trust Agreement, the duties of the Trustee shall be limited to (i) accepting legal process served on
the Trust in the State of Delaware and (ii) at the direction of the Sponsor, the execution of any certificates required to be filed with the Secretary of State of the State of Delaware which the Trustee is required to execute under Section 3811 of
the Delaware Act.
Resignation, Discharge or Removal of Trustee; Successor Trustees
The Trustee may resign at any time by giving at least 60 days advance written notice to the Sponsor. The Sponsor may remove the Trustee at any time by giving at least 60 days advance written notice
to the Trustee. Upon effective resignation or removal, the Trustee will be discharged of its duties and obligations.
If the Trustee resigns or is removed, the Sponsor, acting on behalf of the Shareholders, is required to use reasonable efforts to appoint a successor trustee. Any successor Trustee must satisfy the
requirements of Section 3807 of the DSTA. Any resignation or removal of the Trustee and appointment of a successor Trustee cannot become effective until a written acceptance of appointment is delivered by the successor Trustee to the outgoing Trustee
and the Sponsor and any fees and other expenses due to the outgoing Trustee are paid or waived by the outgoing Trustee. Following compliance with the preceding sentence, the successor will become fully vested with the rights, powers, duties and
obligations of the outgoing Trustee under the Trust Agreement, with like effect as if originally named as Trustee, and the outgoing Trustee shall be discharged of its duties and obligations herein. If no successor Trustee shall have been appointed
and shall have accepted such appointment within forty-five (45) days after the giving of such notice of resignation or removal, the Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee.
If the Trustee resigns and no successor trustee is appointed within 180 days after the date the Trustee issues its notice of resignation, the Sponsor will dissolve and liquidate the Trust and
distribute its remaining assets in cash, although in certain circumstances a Shareholder may request an in-kind liquidating distribution.
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The Administrator
Under the trust administration and accounting agreement, the Administrator provides necessary administrative, tax and accounting services and financial reporting for the maintenance and operations
of the Trust, including calculating the NAV of the Trust and determining the net assets of the Trust, and calculating the size of the Creation Baskets.
The Transfer Agent
The Transfer Agent is responsible for (1) issuing and redeeming Shares in connection with creation and redemption transactions, (2) responding to correspondence by Shareholders and others relating
to its duties, (3) maintaining Shareholder accounts and (4) making periodic reports to the Trust.
The Solana Custodian
Under the Solana Custody Agreement, the Solana Custodian is responsible for (1) safekeeping all of the sol owned by the Trust, (2) opening one or more accounts that hold the Trust’s SOL and (3)
facilitating the transfer of SOL required for the operation of the Trust as directed by the Sponsor. The Solana Custodian is chartered as a limited purpose trust company by the NYSDFS and is authorized by the NYSDFS to provide digital asset custody
services. The Solana Custodian is a wholly-owned subsidiary of Coinbase Global, Inc.
The Cash Custodian
Under the Cash Custody Agreement, the Cash Custodian is responsible for holding the Trust’s cash in connection with creation and redemption transactions effected in cash. The Cash Custodian is a
New York state-chartered bank and a member of the Federal Reserve System.
The Marketing Agent
The Marketing Agent is responsible for: (1) working with the Transfer Agent to review and approve, or reject, purchase and redemption orders of Creation Baskets placed by Authorized Participants
with the Transfer Agent; and (2) reviewing and approving the marketing materials prepared by the Trust for compliance with applicable SEC and FINRA advertising laws, rules, and regulations.
The Staking Provider
If the Staking Condition is satisfied and the Trust seeks to engage in staking of its SOL, the Trust will enter into an agreement with a Staking Provider, which may be an affiliate of the Solana Custodian and/or
the Execution Agent. Staking Provider will stake the Trust’s SOL as the node operator and will operate a validator by which the Trust’s SOL is staked. The Staking Provider will perform its staking services in collaboration with the Solana
Custodian, as the SOL will be staked directly from the Trust’s account with the Solana Custodian.
The Execution Agent
The Sponsor has entered into an agreement with Galaxy Digital Funds LLC, a subsidiary of Galaxy Digital LP (“Galaxy” or the “Execution Agent”) to serve as Execution Agent. At the direction of the
Sponsor, the Execution Agent is responsible for selling SOL on behalf of the Trust to the extent necessary to permit the payment of the Trust’s expenses. The Trust also will utilize the services of the Execution Agent to purchase or sell SOL in
connection with cash creations and redemptions. When acquiring or disposing of SOL on behalf of the Trust in connection with a cash creation or cash redemption transaction, the Sponsor will provide instructions to the Execution Agent, who will
identify a Solana Counterparty. The Solana
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Counterparty will not have a pre-existing material relationship with the Trust, except that in some cases the Solana Counterparty may be an affiliate of a service provider to the Trust. In
connection with both cash creation and cash redemption transactions, the Execution Agent, pursuant to the oversight of the Sponsor, will decide how and with which Solana Counterparty to transact on the Trust’s behalf.
Pursuant to the Execution Agent Agreement, and subject to specific instructions from the Sponsor, the Execution Agent in its discretion is responsible for selecting the method of transacting,
the price, the Solana Counterparty or Counterparties and the trading platform or venue (if any) for the execution of each purchase and sale of SOL on behalf of the Trust. The Execution Agent has established policies and procedures for identifying,
monitoring and performing due diligence on potential Solana Counterparties and trading platforms or venues, with entities being added or removed from consideration on an ongoing basis. In addition, the Execution Agent evaluates Solana
Counterparties and trading platforms or venues on a per-transaction basis. At the time it selects a Solana Counterparty for any specific transaction, the Execution Agent may consider a number of factors in an effort to seek to achieve “best
execution,” including price, transaction costs, speed, and likelihood of execution and settlement, taking into account the size of the transaction and the experience and capabilities of the Solana Counterparty. Relying on its history of transacting
in SOL, the Execution Agent assesses Solana Counterparties in seeking to achieve the best overall outcome for the Trust. Although the Trust is relatively new, and therefore does not have a long history of trading SOL, the Execution Agent (and its
asset management affiliates) have extensive experience, having traded over $12.5 billion in digital assets since 2020 across over ten counterparties for other accounts.
As of [ ], 2025, [__] have been identified by the Execution Agent as Solana Counterparties and have consented to be named in this Prospectus. Each of these Solana Counterparties are, and any other
Solana Counterparty the Execution Agent, on behalf of the Trust, places orders with in the future will be, subject to U.S. federal and/or state licensing requirements or similar laws in non-U.S. jurisdictions, and maintain practices and policies
designed to comply with AML and KYC regulations or similar laws in non-U.S. jurisdictions. The Execution Agent, on behalf of the Trust, may engage additional Solana Counterparties at any time. [__] is an affiliate of [__], an Authorized Participant
of the Trust. [__] is an affiliate of [__], an Authorized Participant of the Trust.
In addition, as part of this agreement, the Execution Agent has agreed to co-brand and co-market the Trust, and the Sponsor has licensed the use of certain Execution Agent trademarks, service marks
and trade names in connection with the Trust. The Execution Agent is a leader in digital asset investing and trading and has extensive knowledge of and experience with digital asset investing and related services and markets.
The Execution Agent offers passive private funds in both the Solana and Solana markets, including funds in Brazil and Canada which track the price of SOL. Galaxy also offers active strategies such
as its Flagship Liquid Crypto Fund, which seeks to provide access to the current and next generation of essential digital assets. Galaxy also has experience in the SOL and digital asset markets through its affiliates, including Galaxy Digital Capital
Management LP, which has been appointed as a fiduciary in the bankruptcy liquidation of FTX Trading Ltd. and acts as a fiduciary managing outside capital.
Galaxy is a subsidiary of Galaxy Digital Holdings LP (“Galaxy Holdings”). Galaxy Digital Holdings Ltd., which holds a limited partner interest in Galaxy Holdings, is listed on the Toronto Stock
Exchange under the symbol “GLXY.”
Authorized Participants
The Trust will process all creations and redemptions of Shares in transactions with Authorized Participants. Creation and redemption transactions will be conducted in exchange for SOL in-kind or
cash.
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When purchasing Creation Baskets in-kind with SOL, Authorized Participants deliver SOL to the Solana Custodian. After confirming receipt of the SOL by the Solana Custodian, the Transfer Agent is
authorized by the Sponsor to issue Creation Baskets of Shares to the creating Authorized Participant in satisfaction of the creation order.
When purchasing Creation Baskets for cash, Authorized Participants will deliver cash to the Cash Custodian. The Execution Agent will be responsible for acquiring the requisite amount of SOL on
behalf of the Trust on an agency basis on the value date of the order. Once the Execution Agent selects a Solana Counterparty, the Cash Custodian will transfer cash to the Solana Counterparty in payment for the requisite amount of SOL. The SOL
acquired from the Solana Counterparty will be transferred to the Solana Custodian. After receipt of the SOL by the Solana Custodian, the Transfer Agent will issue Creation Baskets of Shares to the creating Authorized Participant in satisfaction of
the creation order.
When redeeming Creation Baskets in-kind for SOL, the Transfer Agent will redeem the Shares and the Solana Custodian will distribute the resulting SOL to the redeeming Authorized Participant in
satisfaction of the redemption order.
When redeeming Creation Baskets for cash, the Execution Agent will be responsible for selling the requisite amount of SOL on behalf of the Trust on an agency basis. Once the Execution Agent
selects a Solana Counterparty, the Solana Custodian will transfer SOL to the Solana Counterparty in return for the requisite cash payment. The cash received from the Solana Counterparty will be delivered to the Cash Custodian. After receipt of the
cash payment, the Transfer Agent will redeem the Shares and the Cash Custodian will distribute the resulting cash to the redeeming Authorized Participant in satisfaction of the redemption order.
In connection with both cash creation and cash redemption transactions, the Execution Agent, pursuant to the oversight of the Sponsor, will decide how and with which Solana Counterparty to
transact on the Trust’s behalf. The Trust will create Shares by receiving SOL from a third-party that is not the Authorized Participant and the Trust (through the Execution Agent, on an agency basis)—not the Authorized Participant—is responsible
for selecting the third-party to deliver the SOL. Further, the third-party will not be acting as an agent of the Authorized Participant with respect to the delivery of the SOL to the Trust or acting at the direction of the Authorized Participant
with respect to the delivery of the SOL to the Trust. The Trust will redeem shares by delivering SOL to a third-party that is not the Authorized Participant and the Trust (through the Execution Agent, on an agency basis)—not the Authorized
Participant—is responsible for selecting the third-party to receive the SOL. Further, the third-party will not be acting as an agent of the Authorized Participant with respect to the receipt of the SOL from the Trust or acting at the direction of
the Authorized Participant with respect to the receipt of the SOL from the Trust.
Authorized Participants are expected to sell Shares to the public at prices that reflect, among other factors, the value of the Trust’s assets, supply of and demand for Shares and market conditions
at the time of a transaction.
As of the date of the Prospectus, the Trust has entered into Authorized Participant Agreements with [___].
CUSTODY OF THE TRUST’S ASSETS
Custody of the Trust’s SOL
The Solana Custodian will keep the private keys associated with the Trust’s SOL in a “cold storage” environment where the private keys are generated and secured (the “Prime Custody Vault”). The
Trust intends to conduct its regular SOL transactions, including in connection with creation and redemption transactions and selling SOL to pay the Trust’s expenses, directly from the Trust’s Prime Custody Vault in
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over-the-counter transactions directly with counterparties selected by the Execution Agent. While the Trust does not expect to utilize the services of the Coinbase, Inc. (“Coinbase” or the “Prime
Broker”), in connection with transactions where the Trust’s SOL is being processed in connection with certain creation or redemption transactions or it is being sold to pay Trust expenses, the Execution Agent may elect to transact through the Prime
Broker. In such circumstances, the Trust’s SOL may be maintained in a trading account (the “Trading Balance”) with the Prime Broker, an affiliate of the Solana Custodian. The Trust’s SOL will be maintained by the Solana Custodian and Coinbase in
accounts that are required to be segregated from the assets held by the Solana Custodian or Coinbase as principal and, when held in the Prime Custody Vault, the assets of their other customers. “Cold storage” refers to a safeguarding method by which
the private keys corresponding to the Trust’s SOL are generated and stored in an offline manner using computers or devices that are not directly connected to the internet, which is intended to make them more resistant to hacking, or similarly secure
technology. All of the Trust’s SOL will be held in the Prime Custody Vault except that it may be maintained in the Trading Balance in connection with certain creation or redemption transactions or when it is being sold to pay the Sponsor Fee or Trust
expenses not assumed by the Sponsor. To the extent the Trust maintains a Trading Balance with Coinbase, such short-term holdings represent an omnibus claim on Coinbase’s SOL held on behalf of clients; these holdings exist across a combination of
omnibus hot wallets, omnibus cold wallets or in accounts in Coinbase’s name on a trading platform (including third-party venues and Coinbase’s own execution venue) where Coinbase executes orders to buy and sell SOL on behalf of clients.
Custody of SOL typically involves the generation, storage and utilization of private keys. These private keys are used to effect transfer transactions (i.e., transfers of SOL from an address
associated with the private key to another address). Cold storage is a safeguarding method with multiple layers of protections and protocols, by which the private key(s) corresponding to the Trust’s SOL is (are) generated and stored in an offline
manner.
Private keys are generated in offline computers that are not connected to the internet so that they are resistant to being hacked. Cold storage of private keys involves keeping key material on
storage devices not directly connected to the internet. In accordance with the Trust’s instructions, the Solana Custodian will keep the Trust’s SOL in cold storage on an ongoing basis. Please see “Risk Factors—Cybersecurity Risk Related to Solana,”
“—Risks Related to the Markets and Service Ecosystem for Solana,” and “—Risks Related to the Trust and the Shares” for a discussion of custody risks.
Solana Custodian Access to Private Keys and Whitelisting
The Solana Custodian uses two distinct wallet architectures to support the Trust’s operations. There is the Prime Custody Vault environment that provides the storage where assets will be secured
when not involved in creation or redemption transactions. Additionally, there is the Trading Balance environment where assets move through the Coinbase trading wallets for matching, settlement, and trade execution.
Prime Custody Vault
The following groups of personnel are involved in the Prime Custody Vault wallet digital signing process. Solana Custodian personnel that participate in wallet private key use activities each have
access to material that is necessary to complete a transaction, but the material they have access to is not by itself sufficient to use a wallet private key and sign a transaction unilaterally (e.g., there is segregation of duties enforced between
those that can initiate a private key use request, and those that can participate in wallet private key use).
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The Trust: The Sponsor, acting on behalf of the Trust is responsible for creating and approving the transaction (including specifying transaction details) within the Prime Custody Vault. Clients
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have the ability to manage address whitelist, where funds are permitted to be sent outside the boundaries of Solana Custodian’s environment. Modifications to the address book
require client consensus and client-owned hardware two-factor authentication (2FA).
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Facilitation: The Solana Custodian has a back-office operations team that supports validation of transaction intent, facilitates optional client video authorization calls, and collaborates with the
operators to track transaction processing.
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Key Management & Physical Access: Private keys are encrypted and secured with cryptographically enforced consensus policies and stored in offline vaults. A secure system is responsible for
uploading encrypted key share materials from a secure storage facility based on authorization from human operators. Access to a Solana Custodian secure storage facility and materials therein is physically and logically restricted from a
different operator group required for wallet private key use.
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Key Use: A group of human operators is responsible for providing the necessary cryptographic material to allow access to the private key. Cryptographic consensus must be achieved across this group of
human operators before a wallet private key can be used, and transactions signed to be broadcast on-chain.
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Upon cryptographic consensus being achieved the transaction is processed. The Solana Custodian securely signs the transaction and broadcasts to the blockchain. All system-to-system authentication
and authorization is enforced to ensure that unauthorized services are blocked from accessing resources supporting wallet operations.
Trading Balance
For the ETF trading and settlement environment, clients have configurable security controls that mirror those of the Vault wallet.
Specifically, the Sponsor, on behalf of the Trust, has the ability to manage their address allowlist where funds are permitted to be sent outside the boundaries of the Solana Custodian’s
environment. Modifications to the address book require client consensus and client- owned hardware two-factor authentication (2FA).
The wallet private keys are secured in an online, isolated, high security system that leverages hardware security modules (HSMs). Transaction signing occurs automatically within this secure
environment.
In the Trading Balance, any human access to the environment is exceptional, requiring additional secure authentication protocols, and is actively monitored and logged. The private keys are
encrypted at rest, and stored in a non-exportable format. All system-to-system authentication and authorization is enforced to ensure that unauthorized services are blocked from accessing resources supporting wallet operations.
Verifying Existence of Solana
The Solana Custodian issues Systems and Organizational Control (“SOC”) reports for the Prime Custody Vault, to verify the existence of digital assets among other objectives. It ensures controls are
designed and operating effectively, providing reasonable assurance that customer digital asset positions held in the Solana Custodian and Prime Broker are authorized, executed, and accurately and completely recorded.
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Moving Assets from Cold Storage
To summarize, any movement of funds initiated by the Solana Custodian on behalf of its customers adhere to the cold storage principles described above, which are inclusive of cryptographic
consensus enforcement and segregation of duties between personnel among other security features.
Moving Assets into Cold Storage
The Solana Custodian supports transfer of funds between a client’s Trading Balance and Prime Custody Vault. This process requires a user to comply with the account’s configured Transfer Policy
which governs the approval requirements to be met before a transfer can be processed. The transfer is considered processed when it receives the appropriate blockchain confirmations.
Specifically, the transaction would be broadcasted from the Trading Balance wallet environment and received by a specific Prime Custody Vault wallet. Moving assets from the Trading Balance to Prime
Custody Vault can be initiated by the client via the Solana Custodian’s platform UI/API and must comply with client configured Transfer Policies.
Insurance of the Solana Custodian
The Solana Custodian purchases commercial crime and cyber coverage with comprehensive coverage terms and conditions. The commercial crime insurance program covers both cold and hot storage assets
held by Coinbase Global, Inc. (“Coinbase Global”) and all its subsidiaries, including the Solana Custodian and Coinbase, Inc. (collectively, “Coinbase”). Assets held within the Solana Custodian are secured within Coinbase’s cold storage environment.
Coinbase Global currently maintains a commercial crime insurance policy. Coinbase Global has maintained a commercial crime insurance policy since 2013, which is designed to be comprehensive and intended to cover the
loss of client assets held by the Solana Custodian and the Prime Broker (collectively, Coinbase Global and its subsidiaries are referred to as the “Coinbase Insureds”), including from employee collusion or fraud, theft, damage of key material,
security breach or hack, and fraudulent transfer. The commercial crime insurance policy is intended to provide the Coinbase Insureds and their clients with some of the broadest and deepest insurance coverage in the crypto industry, with comprehensive
coverage terms and conditions. This policy is renewed annually and the insurance amounts are subject to review and change. The Solana Custodian has advised the Sponsor that this insurance is maintained at a commercially reasonable amount for the
digital assets custodied on behalf of the Coinbase Insureds’ clients, including the Trust’s SOL custodied by the Solana Custodian. The insurance maintained by Coinbase Global is shared among all of the Coinbase Insured’s customers, is not specific to
the Trust or to customers holding SOL with the Solana Custodian or Prime Broker, and may not be available or sufficient to protect the Trust from all possible losses or sources of losses. Further, the coverage will not be sufficient to fully cover
losses for the Trust in the event of a catastrophic, large scale or simultaneous incident affecting multiple Coinbase clients. Coinbase Global may choose not to renew, or may be unable to renew any portion or all of these insurance policies, which
may further expose the Trust and its Shareholders to the risk of loss.
Operation of the Solana Custodian
Solana which is custodied by the Solana Custodian is held in segregated wallets and is not commingled with assets of Solana Custodian or its affiliates or with assets of other customers of the
Solana Custodian. The Solana Custodian has also agreed in the Solana Custody Agreement that it will not, directly or indirectly, lend, pledge, hypothecate or rehypothecate any of the Trust’s SOL, and that the Trust’s SOL assets are not treated as
general assets of the Solana Custodian but are instead considered custodial assets
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that remain the Trust’s property. Additionally, the Solana Custodian has agreed to provide the Trust or its authorized independent public accountant with confirmation of or access to information
sufficient to confirm the SOL held by the Solana Custodian for the Trust and that the Trust’s SOL is held in a separate, segregated account under the Trust’s name. Under the Solana Custody Agreement, the Solana Custodian is required to obtain and
maintain, at its sole expense, commercially reasonable insurance coverage for the custody services it provides to the Trust. The Solana Custody Agreement does not require that private key information with respect to the Trust’s SOL be kept in a
particular physical location. The Sponsor will continuously evaluate the Solana Custodian’s performance and operations by engaging in regular communications and scheduled meetings to ensure that the Solana Custodian operates consistent with the
standards set forth in the Solana Custody Agreement and the Solana Custodian’s policies and procedures.
The Solana Custodian may receive deposits of SOL but may not send SOL without use of the corresponding private keys. In order to send SOL kept in cold storage, private keys must be accessed from
offline cold storage and used to sign transactions. At that point, the Solana Custodian can upload the fully signed transaction to an online network and transfer the SOL. Because the Solana Custodian may need to access private keys from offline
storage prior to initiating transactions, the initiation or crediting of withdrawals or other transactions may be delayed.
The Solana Custodian carefully considers the design of the physical, operational and cryptographic systems for secure storage of the Trust’s private keys in an effort to lower the risk of loss or
theft. No such system is perfectly secure and loss or theft due to operational or other failure is always possible. See “Risk Factors—Risks Related to Solana —Cybersecurity Risk Related to Solana.”
The Trust may engage third-party custodians or vendors besides the Solana Custodian and the Cash Custodian to provide custody and security services for all or a portion of its SOL and/or cash, and
the Sponsor will pay the custody fees and any other expenses associated with any such third-party custodian or vendor. The Sponsor is responsible for overseeing the Solana Custodian and the Trust’s other service providers. The Sponsor may, in its
sole discretion, add or terminate Solana custodians at any time. The Sponsor may, in its sole discretion, change the custodian for the Trust’s SOL holdings, but it will have no obligation whatsoever to do so or to seek any particular terms for the
Trust from other such custodians. However, the Sponsor will only enter into SOL custody arrangements with custodians that meet the Sponsor’s criteria, including an agreement to maintain Trust assets in a segregated account, to maintain insurance and
to store the Trust’s private keys in cold storage or in such other manner as the Sponsor determines provides reasonable protection for the Trust’s assets from loss or theft.
Under the Solana Custody Agreement, the Solana Custodian’s liability is subject to the following limitations, among others: (i) other than with respect to claims and losses arising from fraud or
willful misconduct, the Solana Custodian’s aggregate liability under the Solana Custody Agreement shall not exceed the greater of (A) the aggregate fees paid by the Trust to the Solana Custodian in the 12 months prior to the event giving rise to the
Solana Custodian’s liability, and (B) the value of the affected SOL giving rise to the Solana Custodian’s liability; (ii) the Solana Custodian’s aggregate liability in respect of each cold storage address shall not exceed $100 million; and (iii) in
respect of any incidental, indirect, special, punitive, consequential or similar losses, the Solana Custodian is not liable, even if the Solana Custodian has been advised of or knew or should have known of the possibility thereof. The Solana
Custodian is not liable for delays, suspension of operations, failure in performance, or interruption of service to the extent it is directly due to a cause or condition beyond the reasonable control of the Solana Custodian. While the Solana
Custodian does not limit the size of each wallet to $100 million in SOL, and there is no guarantee that the amount of SOL in each Trust wallet will remain below this threshold, the Sponsor intends to monitor each Trust wallet and adjust the amount of
SOL (valued in USD) in any given Trust wallet (including moving SOL into additional wallets) in an effort to maintain the amount of SOL in each Trust wallet below $100 million.
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The Trust is not a banking institution and is not a member of the FDIC or Securities Investor Protection Corporation (“SIPC”) and, therefore, investments in the Trust are not subject to the
protections enjoyed by depositors with FDIC or SIPC member institutions. Likewise, the Solana Custodian is not a depository institution and is not a member of the FDIC or SIPC and, therefore, the Trust’s assets held with the Solana Custodian are not
subject to FDIC or SIPC insurance coverage. In addition, neither the Trust nor the Sponsor insure the Trust’s SOL.
Also pursuant to the Solana Custody Agreement, Coinbase, an affiliate of the Solana Custodian, may provide prime broker services, including SOL trade execution, from time to time as requested by
the Sponsor. The Trust may engage in purchases or sales of SOL by placing orders with Coinbase. Coinbase will route orders placed by the Sponsor through Coinbase’s execution platform to a Connected Trading Venue where the order will be executed. Each
order placed with Coinbase by the Sponsor will be sent, processed and settled at each Connected Trading Venue to which it is routed. Subject to the foregoing, and to certain policies and procedures that the Solana Custody Agreement requires Coinbase
to have in place to mitigate conflicts of interest when executing the Trust’s orders, the Solana Custody Agreement provides that Coinbase shall have no liability, obligation, or responsibility whatsoever for the selection or performance of any
Connected Trading Venue, and that other Connected Trading Venues and/or trading platforms not used by Coinbase may offer better prices and/or lower costs than the Connected Trading Venue used to execute the Trust’s orders.
Orders to sell SOL on behalf of the Trust may be executed by the Coinbase at venues that have been approved in accordance with the Coinbase’s due diligence and risk assessment process. Due
diligence includes reviews conducted by the legal, compliance, security, privacy and finance/credit-risk teams for every trading venue that Coinbase’s multi-venue execution capability connects to, helping ensure that the Coinbase only partners with
secure and compliant liquidity partners. Coinbase also adheres to a maximum amount of assets that can ever be held on a venue, which is unique for each venue based on Coinbase’s venue diligence and continually refreshed.
[As of the date of this Prospectus, Coinbase’s multi-venue execution capability connects with eight (8) venues in total: Coinbase Exchange, Bitstamp, LMAX, Kraken, and four non-bank market makers
that it is unable to name due to confidentiality restrictions].
Coinbase may execute orders as an agent on behalf of the Trust. Coinbase does not operate a dealer and does not trade against its clients–all orders are routed to the venues listed above based on a
variety of routing criteria, including pricing, liquidity and depth of order book.
Custody of the Trust’s Cash
The Trust generally does not intend to hold cash or cash equivalents. However, the Trust may hold cash and cash equivalents on a temporary basis to pay expenses or in connection with cash creation
and redemption transactions. The Trust has entered into the Cash Custody Agreement with BNYM under which BNYM acts as custodian of the Trust’s cash and cash equivalents, if any.
THE PRIME BROKER
Pursuant to the Solana Custody Agreement, a portion of the Trust’s SOL holdings and cash holdings from time to time may be held with the Prime Broker, an affiliate of the Solana Custodian, in the
Trading Balance, in connection with the creation and redemption of Shares via cash transactions or to pay for Trust expenses not assumed by the Sponsor in consideration for the Sponsor Fee. The Trust, however, intends to conduct its regular SOL
transactions, including in connection with paying the Trust’s expenses, directly from the Trust’s Prime Custody Vault over the counter with counterparties selected by the Execution Agent. If the
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Sponsor or the Execution Agent determines to transact with the Prime Broker, the amount of SOL that may be held in the Trading Balance will be limited to the amount necessary to process a given
creation or redemption transaction, as applicable, or to pay for Trust expenses not assumed by the Sponsor in consideration for the Sponsor Fee.
The Sponsor may, in its sole discretion, add or terminate prime brokers at any time. The Sponsor may, in its sole discretion, change the Prime Broker for the Trust, but it will have no obligation
whatsoever to do so or to seek any particular terms for the Trust from other such prime brokers.
These periodic holdings held in the Trading Balance with the Prime Broker represent an omnibus claim on the Prime Broker’s SOL held on behalf of clients; these holdings exist across a combination
of omnibus hot wallets, omnibus cold wallets or in accounts in the Prime Broker’s name on a Connected Trading Venue.
The Prime Broker is not required by the Solana Custody Agreement to hold any of the SOL in the Trust’s Trading Balance in cold storage or to hold any such SOL in a segregated account, and neither
the Trust nor the Sponsor can control the method by which the Prime Broker holds the SOL credited to the Trust’s Trading Balance. SOL in the Trust’s Trading Balance is held in FBO omnibus trading accounts subject to robust accounting controls in
order to ensure that the beneficial interest of the Trust’s assets are properly ledgered at all times.
The Solana Custody Agreement contains an agreement by the parties to treat the SOL credited to the Trust’s Trading Balance as financial assets under Article 8 of the New York Uniform Commercial
Code (“Article 8”). Article 8 provides additional protection for the Trust’s SOL in the Trading Balance by creating a security entitlement in favor of the Trust while imposing various duties on the Prime Broker. The Prime Broker’s parent, Coinbase
Global, has stated in its most recent public securities filings that in light of the inclusion in its custody agreements of provisions relating to Article 8 it believes that a court would not treat custodied digital assets as part of its general
estate in the event the Prime Broker were to experience insolvency. However, due to the novelty of digital asset custodial arrangements courts have not yet considered this type of treatment for custodied digital assets and it is not possible to
predict with certainty how they would rule in such a scenario.
To the extent the Trust sells SOL through the Prime Broker, the Trust’s orders will be executed at Connected Trading Venues that have been approved in accordance with the Prime Broker’s due
diligence and risk assessment process. The Prime Broker has represented that its due diligence on Connected Trading Venues include reviews conducted by the legal, compliance, security, privacy and finance and credit-risk teams. The Connected Trading
Venues, which are subject to change from time to time, currently include [Coinbase Exchange, Bitstamp, LMAX, Kraken, and four non-bank market makers that the Prime Broker is unable to name due to confidentiality restrictions].
In the event the Sponsor, on behalf of the Trust, places an order to purchase or sell SOL on the Trading Platform in connection with the creation or redemption of Shares via a cash transaction, the
associated SOL or cash used to fund or fill the order, if any, will be placed on hold and will generally not be eligible for other use or withdrawal from the Trust’s Trading Balance. The Trust’s Vault Balance may be used directly to fund orders. With
each Connected Trading Venue, the Prime Broker shall establish an account in the Prime Broker’s name, or in its name for the benefit of clients, to trade on behalf of its clients, including the Trust, and the Trust will not, by virtue of the Trading
Balance the Trust maintains with the Prime Broker, have a direct legal relationship, or account with, any Connected Trading Venue.
In any SOL transactions between an Authorized Participant, the Solana Custodian and the Prime Broker, the Authorized Participant will be responsible for any fees associated with SOL transactions.
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Either the Trust or the Prime Broker may terminate the Solana Custody Agreement in its entirety for any reason and without Cause (as defined below) by providing at least ninety (90) days’ prior
written notice to the other party.
The Prime Broker and the Solana Custodian may, in their sole discretion, suspend, restrict or terminate the Trust’s prime broker services, including by suspending, restricting or closing any
account of the Trust covered under the Solana Custody Agreement for Cause, at any time and with prior notice to the Trust.
For purposes of the Solana Custody Agreement, “Cause” shall mean: (i) a default occurs and is continuing with respect to Trust; (ii) the Trust materially breaches this Prime Broker Agreement,
including any agreement, exhibit, appendix, addendum, policy referenced herein, or supplement attached hereto, and, to the extent capable of remedy, such breach is not cured within five business days following written notice from the Prime Broker to
the Trust of such breach; (iii) a requirement of a facially valid subpoena, court order, or binding order of a government authority; (iv) The Trust’s account with the Prime Broker is subject to any pending litigation, investigation, or government
proceeding and/or the Prime Broker reasonably perceives a heightened risk of legal or regulatory non-compliance associated with the Trust’s use of the Prime Broker services; or (v) the Prime Broker reasonably suspects the Trust of attempting to
circumvent the Prime Broker’s controls or uses the Prime Broker services in a manner the Prime Broker otherwise deems inappropriate or potentially harmful to itself or third parties.
A decision by the Prime Broker or the Solana Custodian to take certain actions, including suspending, restricting or terminating the Trust’s accounts covered under the Solana Custody Agreement, may
be based on confidential criteria that are essential to the Prime Broker’s risk management and security practices and agrees that the Prime Broker and the Solana Custodian are under no obligation to disclose the details of its risk management and
security practices to the Trust.
Pursuant to the Solana Custody Agreement, the Trust compensates the Prime Broker through (i) a “Settlement Fee” assessed per settlement in the Trust’s Trading Balance, (ii) a “Primer Broker Custody
ETP Services Fee” assessed as a tiered rate of the Trust’s assets under custody in its custodial account, and (iii) a “Trading Account Fee” assessed as a fixed percentage rate of each executed order. The Prime Broker will invoice the Trust for the
Settlement Fee and the Prime Broker Custody ETP Services Fee on a monthly basis and the Trust shall pay all amounts to the Prime Broker within 30 days of the Trust’s receipt of an invoice for such fees.
The parent company of the Solana Custodian and Prime Broker, Coinbase Global, maintains a commercial crime insurance policy, which is intended to cover the loss of client assets held by Coinbase
Global and all of its subsidiaries, including the Coinbase Insureds. This policy covers the loss of client assets held by the Solana Custodian and Prime Broker, including from employee collusion or fraud, physical loss including theft, damage of key
material, security breach or hack and fraudulent transfer. The insurance maintained by the Coinbase Insureds is shared among all of their customers, is not specific to the Trust or to customers holding SOL with the Solana Custodian or Prime Broker
and may not be available or sufficient to protect the Trust from all possible losses or sources of losses.
Under the Solana Custody Agreement, the Prime Broker’s liability is limited in the following respects, among others: (i) other than with respect to claims and losses arising from fraud or willful
misconduct, the Prime Broker’s aggregate liability under the Solana Custody Agreement shall not exceed the greater of (A) the aggregate fees paid by the Trust to the Prime Broker in the 12 months prior to the event giving rise to the Prime Broker’s
liability, and (B) the value of the affected SOL giving rise to the Prime Broker’s liability; (ii) the Prime Broker’s aggregate liability in respect of each cold storage address shall not exceed $100 million; and (iii) in respect of any incidental,
indirect, special, punitive, consequential or similar losses, the Prime Broker is not liable, even if the Prime Broker has been advised of or knew or should have known of
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the possibility thereof. Both the Trust and the Prime Broker and its affiliates (including the Solana Custodian) are required to indemnify each other under certain circumstances. The Solana Custody
Agreement is governed by New York law and provides that disputes arising under it are subject to arbitration.
FORM OF SHARES
Registered Form
Shares are issued in registered form in accordance with the Trust Agreement. The Transfer Agent has been appointed registrar and transfer agent for the purpose of transferring Shares in
certificated form. The Transfer Agent keeps a record of all Shareholders and holders of the Shares in certified form in the registry. The Sponsor recognizes transfers of Shares in certificated form only if done in accordance with the Trust Agreement.
The beneficial interests in such Shares are held in book-entry form through participants and/or accountholders in DTC.
Book Entry
Individual certificates are not issued for the Shares. Instead, Shares are represented by one or more global certificates, which are deposited by the Transfer Agent on behalf of the Trust with DTC
and registered in the name of Cede & Co., as nominee for DTC. The global certificates evidence all of the Shares outstanding at any time. Shareholders are limited to (1) participants in DTC such as banks, brokers, dealers and trust companies
(“DTC Participants”), (2) those who maintain, either directly or indirectly, a custodial relationship with a DTC Participant (“Indirect Participants”) and (3) those who hold interests in the Shares through DTC Participants or Indirect Participants,
in each case who satisfy the requirements for transfers of Shares. DTC Participants acting on behalf of Shareholders holding Shares through such participants’ accounts in DTC will follow the delivery practice applicable to securities eligible for
DTC’s Same-Day Funds Settlement System. Shares are credited to DTC Participants’ securities accounts following confirmation of receipt of payment.
DTC
The Trust understands that DTC is a limited purpose trust company organized under the laws of the State of New York and is a member of the Federal Reserve System, a “clearing corporation” within
the meaning of the New York Uniform Commercial Code and a “clearing agency” registered pursuant to the provisions of Section 17A of the Exchange Act. DTC holds securities for DTC Participants and facilitates the clearance and settlement of
transactions between DTC Participants through electronic book-entry changes in accounts of DTC Participants.
TRANSFER OF SHARES
The Shares are only transferable through the book-entry system of DTC. Shareholders who are not DTC Participants may transfer their Shares through DTC by instructing the DTC Participant holding
their Shares (or by instructing the Indirect Participant or other entity through which their Shares are held) to transfer the Shares. Transfers are made in accordance with standard securities industry practice.
Transfers of interests in Shares with DTC are made in accordance with the usual rules and operating procedures of DTC and the nature of the transfer. DTC has established procedures to facilitate
transfers among the participants and/or accountholders of DTC. Because DTC can only act on behalf of DTC Participants, who in turn act on behalf of Indirect Participants, the ability of a person or entity having an interest in a global certificate to
pledge such interest to persons or entities that do not participate in DTC,
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or otherwise take actions in respect of such interest, may be affected by the lack of a certificate or other definitive document representing such interest.
The Trust understands that DTC will take any action permitted to be taken by a Shareholder (including, without limitation, the presentation of a global certificate for exchange) only at the
direction of one or more DTC Participants in whose account with DTC interests in global certificates are credited and only in respect of such portion of the aggregate principal amount of the global certificate as to which such DTC Participant or
Participants has or have given such direction.
PLAN OF DISTRIBUTION
Buying and Selling Shares
Most investors buy and sell Shares of the Trust in secondary market transactions through brokers. Shares trade on the Exchange under the ticker symbol QSOL. Shares are bought and sold throughout
the trading day like other publicly traded securities. When buying or selling Shares through a broker, most investors incur customary brokerage commissions and charges, as well as any bid-ask spread. Shareholders are encouraged to review the terms of
their brokerage account for details on applicable charges.
Authorized Participants
The offering of Shares is a best efforts offering. The Trust continuously offers Creation Baskets consisting of 5,000 Shares to Authorized Participants. Authorized Participants may pay (i) a
transaction fee and (ii) the Custody Transaction Fee for each order they place to create or redeem Creation Baskets.
The offering of Shares is being made in compliance with Rule 2310 of the FINRA Rules. Accordingly, Authorized Participants will not make any sales to any account over which they have discretionary
authority without the prior written approval of a purchaser of Shares. An Authorized Participant is not required to sell any specific number or dollar amount of Shares.
By executing an Authorized Participant Agreement, an Authorized Participant becomes part of the group of parties eligible to purchase Creation Baskets from, and have Creation Baskets redeemed by,
the Trust. An Authorized Participant is under no obligation to create or redeem Creation Baskets or to offer to the public any Shares it does create. A broker-dealer participating in the distribution of Shares may be deemed to be an “underwriter”
within the meaning of Section 2(a)(11) of the 1933 Act, in connection with such sales.
Because new Shares can be created and issued on an ongoing basis, at any point during the life of the Trust, a “distribution,” as such term is used in the Securities Act, will be occurring.
Authorized Participants, other broker-dealers and other persons are cautioned that some of their activities may result in their being deemed participants in a distribution in a manner that would render them statutory underwriters and subject them to
the prospectus delivery and liability provisions of the Securities Act. Any purchaser who purchases Shares with a view towards distribution of such Shares may be deemed to be a statutory underwriter. In addition, an Authorized Participant, other
broker-dealer firm or its client will be deemed a statutory underwriter if it purchases a Creation Basket from the Trust, breaks the Creation Basket down into the constituent Shares and sells the Shares to its customers; or if it chooses to couple
its purchases of Shares from the Trust with an active selling effort involving solicitation of secondary market demand for the Shares. In contrast, Authorized Participants may engage in secondary market or other transactions in Shares that would not
be deemed “underwriting.” For example, an Authorized Participant may act in the capacity of a broker or dealer with respect to Shares that were previously distributed by other Authorized Participants. A determination of whether a particular market
participant is an underwriter must take into account all the
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facts and circumstances pertaining to the activities of the broker-dealer or its client in the particular case, and the examples mentioned above should not be considered a complete description of
all the activities that would lead to designation as an underwriter and subject them to the prospectus delivery and liability provisions of the Securities Act.
Dealers who are neither Authorized Participants nor “underwriters” but are nonetheless participating in a distribution (as contrasted to ordinary secondary trading transactions), and thus dealing
with Shares that are part of an “unsold allotment” within the meaning of Section 4(a)(3)(C) of the Securities Act, would be unable to take advantage of the prospectus delivery exemption provided by Section 4(a)(3) of the Securities Act.
While the Authorized Participants may be indemnified by the Sponsor, they will not be entitled to receive a discount or commission from the Trust or the Sponsor for their purchases of Creation
Baskets.
Seed Capital Investor; Selling Shareholders
In connection with the Trust’s launch, the Trust was seeded with $100,000 on October 16, 2025 through the sale of 4,000 Shares (“Initial Seed Shares”) at a per-Share price of $25.00 by the Trust
to Invesco Ltd. On [__], 2025, Invesco Ltd. redeemed all of its Shares for cash at a per-Share price of $[__] for a total redemption value of $100,000. At the same time on [__], 2025, Invesco Ltd. created [__] shares at a price of $[__] per Share
based on the Benchmark price as of 4:00 pm. Eastern Time on [__], 2025. Accordingly, as of the market close on [__], 2025, the Trust had total assets of $[__], solely represented by SOL held in custody by the Solana Custodian, and had [__] Shares
outstanding, entirely held by Invesco Ltd.
Additionally, [___] (in such role, the “Seed Capital Investor”) has expressed its interest in acquiring [__] Shares representing [__] Creation Baskets (the “Seed Creation Baskets”) at a price per Share based on the
Benchmark price as of 4:00 p.m. Eastern Time on the date of this registration statement. Accordingly, after the market close on the date of this registration statement, the Trust expects to have [__] Shares outstanding, with [__] Shares held by
Invesco Ltd. and [__] Shares held by the Seed Capital Investor. Invesco Ltd. and the Seed Capital Investor each have acted or will act as a statutory underwriter in connection with their purchase of the applicable shares. The price of the Shares
acquired by the Seed Capital Investor is determined as described in this Prospectus, and such Shares could be sold at different prices if sold by the Seed Capital Investor at different times.
It is anticipated that the Seed Capital Investor will redeem the Seed Capital Baskets or sell its shares to a third party in the weeks following the initial listing of Shares on the Exchange, if
third-party investments in the Trust exceed the value of the Seed Capital Investor’s entire investment. The Seed Capital Investor may sell some or all of the shares underlying the Seed Creation Baskets held by it pursuant to the registration
statement for the Trust (the Seed Capital Investor in such role, the “Selling Shareholder”), which shares have been registered to permit the resale from time to time after purchase. The Trust will not receive any of the proceeds of the redemption of
any Seed Creation Baskets by the Seed Capital Investor or from the resale by the Selling Shareholder of its shares. The Seed Capital Investor will not receive any fee or other compensation from the Sponsor in connection with the sale of the Seed
Capital Baskets.
A Selling Shareholder may sell Shares owned by them directly or through broker-dealers, in accordance with applicable law, on any national securities exchange on which the Shares may be listed or
quoted at the time of sale, through trading systems, in the OTC market or in transactions other than on these exchanges or systems at fixed prices, at prevailing market prices at the time of the sale, at varying prices determined at the time of sale,
or at negotiated prices. These sales may be effected through brokerage transactions, privately negotiated trades, block sales, entry into options or other derivatives transactions or through any
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other means authorized by applicable law. A Selling Shareholder may redeem Shares held in Creation Basket size through an Authorized Participant.
CREATION AND REDEMPTION OF SHARES
The Trust creates and redeems Shares from time to time, but only in one or more Creation Baskets. The value of Creation Baskets are based on the quantity of SOL attributable to each Share of the
Trust (net of accrued but unpaid Sponsor fees and any accrued but unpaid expenses or liabilities) being created or redeemed determined as of 4:00 p.m. ET on the Business Day the order to create or redeem Creation Baskets is properly received.
Creation and redemption transactions will be conducted in exchange for SOL in-kind or cash.
When purchasing Creation Baskets in-kind with SOL, Authorized Participants will deliver SOL to the Solana Custodian. After confirming receipt of the SOL by the Solana Custodian, the Transfer
Agent is authorized by the Sponsor to issue Creation Baskets of Shares to the creating Authorized Participant in satisfaction of the creation order.
When purchasing Creation Baskets for cash, Authorized Participants will deliver cash to the Cash Custodian. The Execution Agent will be responsible for acquiring the requisite amount of SOL on
behalf of the Trust on an agency basis on the value date of the order. Once the Execution Agent selects a Solana Counterparty, the Cash Custodian will transfer cash to the Solana Counterparty in payment for the requisite amount of SOL. The SOL
acquired from the Solana Counterparty will be transferred to the Solana Custodian. After receipt of the SOL by the Solana Custodian, the Transfer Agent will issue Creation Baskets of Shares to the creating Authorized Participant in satisfaction of
the creation order.
When redeeming Creation Baskets in-kind for SOL, the Transfer Agent will redeem the Shares and the Solana Custodian will distribute the resulting SOL to the redeeming Authorized Participant in
satisfaction of the redemption order.
When redeeming Creation Baskets for cash, the Execution Agent will be responsible for selling the requisite amount of SOL on behalf of the Trust on an agency basis. Once the Execution Agent
selects a Solana Counterparty, the Solana Custodian will transfer SOL to the Solana Counterparty in return for the requisite cash payment. The cash received from the Solana Counterparty will be delivered to the Cash Custodian. After receipt of the
cash payment, the Transfer Agent will redeem the Shares and the Cash Custodian will distribute the resulting cash to the redeeming Authorized Participant in satisfaction of the redemption order.
The Sponsor recognizes that the size of the Creation Baskets may impact the effectiveness of the arbitrage mechanism of the Trust’s creation and redemption process, and accordingly may adjust the
size of the Creation Baskets to enhance the activities of the Authorized Participants in the secondary market for the Trust’s shares.
Authorized Participants are the only persons that may place orders to create and redeem Creation Baskets. Authorized Participants must be: (1) registered broker-dealers or other securities
market participants, such as banks or other financial institutions, that are not required to register as broker-dealers to engage in securities transactions as described below, and (2) DTC Participants. To become an Authorized Participant, a person
must enter into an Authorized Participant Agreement. The Authorized Participant Agreement provides the procedures for the creation and redemption of Shares. The delivery of SOL to or from the Trust in connection with creation and redemption
transactions, may settle on the Solana network and is thus subject to the risks associated with Solana network transactions, including the irreversibility of transactions made in error. The Authorized Participant Agreement and the related
procedures attached thereto may be amended by the Trust and the Sponsor, without the consent of any Shareholder or Authorized Participant.
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Authorized Participants will pay (i) a transaction fee and (ii) Custody Transaction Fee for each order they place to create or redeem Shares. The transaction fee may be reduced, increased or
otherwise changed by the Trust and the Sponsor. Authorized Participants receive no fees, commissions or other form of compensation or inducement of any kind from either the Trust or the Sponsor, and no such person will have any obligation or
responsibility to the Sponsor or the Trust to effect any sale or resale of Shares.
Certain Authorized Participants or their affiliates may be capable of participating directly in the spot markets. Some Authorized Participants or their affiliates may from time to time buy or sell
SOL and may profit in these instances. See “Risk Factors—Risks Related to the Trust and the Shares—The Sponsor and its affiliates are subject to conflicts of interest that could adversely affect your investment in the Trust.” To the extent that the
activities of Authorized Participants or their affiliates have a meaningful effect on the Solana market, it could affect the price of SOL and impact the ability of the Authorized Participants or their affiliates to effectively arbitrage the
difference between the price at which the shares trade and the NAV of the Trust’s Shares. While the Sponsor currently expects that Authorized Participants’ or their affiliates direct activities in the Solana or the secondary market in connection with
the creation and redemption activities of the Trust will not significantly affect the price of SOL or the Shares, the impact of the activities of the Trust and its Authorized Participants on SOL or the secondary market is unknown and beyond the
control of the Sponsor.
Each Authorized Participant will be required to be registered as a broker-dealer under the Exchange Act and a member in good standing with FINRA, or exempt from being or otherwise not required to
be licensed as a broker-dealer or a member of FINRA, and will be qualified to act as a broker or dealer in the states or other jurisdictions where the nature of its business so requires. Certain Authorized Participants may also be regulated under
federal and state banking laws and regulations. Each Authorized Participant has its own set of rules and procedures, internal controls and information barriers as it determines is appropriate in light of its own regulatory regime.
The following description of the procedures for the creation and redemption of Creation Baskets is only a summary and a Shareholder should refer to the relevant provisions of the form of Authorized
Participant Agreement for more detail. The form of Authorized Participant Agreement is filed as an exhibit to the registration statement of which this Prospectus is a part.
Creations and redemptions may be “off-chain” transactions that are represented in the books and records of the Prime Broker or “on-chain” transactions reflected in the Trust’s Prime Custody
Vault Account. The creating or redeeming Authorized Participant will be responsible for any on-chain transaction fees, as well as any transaction fees imposed by the Trust and any transaction charges imposed by the Execution Agent in connection
with acquiring or disposing of SOL in connection with creation or redemption transactions.
Authorized Participants will place orders through the Transfer Agent. The Transfer Agent will coordinate with the Trust’s Solana Custodian in order to facilitate settlement of the Shares and cash
and/or SOL as described in more detail in the “—Creation Procedures” and “—Redemption Procedures” sections below.
Creation Procedures
On any Business Day, an Authorized Participant may place an order through the Transfer Agent’s electronic order delivery system to create one or more Creation Baskets. The Transfer Agent will
acknowledge the purchase order unless the Trustee or the Sponsor decides to refuse the deposit as described below under “Rejection of Purchase Orders.” For cash creations orders to purchase Shares (“Purchase Orders”) must be placed by 2:30 p.m. ET
or the close of regular trading on the Exchange, whichever is earlier (the “Cash
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Order Cutoff Time”). For in-kind creations, Purchase Orders must be placed by 4:00 p.m. or the close of regular trading on the Exchange, whichever is earlier (the In-Kind Order Cutoff Time”).
The day on which a valid order is received by the Transfer Agent is considered the “Purchase Order Date.”
The Sponsor may in its sole discretion limit the number of Shares created pursuant to Purchase Orders on any specified day without providing notice to the Authorized Participants and may direct
the Transfer Agent to reject any Purchase Orders in excess of such capped amount. The Sponsor may choose to limit the number of Shares created pursuant to Purchase Orders when it deems so doing to be in the best interest of Shareholders. The
Sponsor may choose to do so when it believes the market is too volatile to execute a SOL transaction, when it believes the price of SOL is being inconsistently, irregularly, or discontinuously published from SOL trading venues and other data
sources, or when it believes other similar circumstances may create a scenario in which accepting Purchase Orders would not be in the best interests of the Shareholders. The Sponsor does not believe that the Trust’s ability to arrive at such a
determination will have a significant impact on the Shares in the secondary market because it believes that the ability to create Shares would be reinstated shortly after such determination is made, and any entity desiring to create Shares would be
able to do so once the ability to create Shares is reinstated. However, it is possible that such a determination would cause the Shares to trade at premiums or discounts relative to the Trust’s NAV on the secondary market if arbitrageurs believe
that there is risk that the creation and redemption process is not available, as this process is a component of keeping the price of the Shares on the secondary market closely aligned to the Trust’s NAV.
If the Trustee accepts the Purchase Order, the Transfer Agent will transmit to the Authorized Participant, via electronic mail message or other electronic communication, no later than 5:00 p.m.
ET on the date such Purchase Order is received, or deemed received, a copy of the Purchase Order endorsed “Accepted” by the Transfer Agent and indicating the Creation Basket Deposit that the Authorized Participant must deliver to the Solana
Custodian or Prime Broker in exchange for each Creation Basket. In the case of Purchase Orders submitted via the Transfer Agent’s electronic order entry system, the Authorized Participant will receive an automated email indicating the acceptance of
the Purchase Order and the Purchase Order will be marked “Accepted” in the Transfer Agent’s electronic order entry system. Prior to the Transfer Agent’s acceptance as specified above, a Purchase Order will only represent the Authorized
Participant’s unilateral offer to deposit the requisite amount of SOL or cash in exchange for Creation Baskets and will have no binding effect upon the Trust, the Sponsor, the Trust Administrator, the Transfer Agent, the Solana Custodian or any
other party.
If required by the Sponsor and the Trust, prior to the delivery of Creation Baskets for a Purchase Order, the Authorized Participant must have wired to the Transfer Agent the nonrefundable
transaction fee due for the Purchase Order. Authorized Participants may not withdraw a Purchase Order.
The manner by which Creation Baskets are made is dictated by the terms of the Authorized Participant Agreement. By placing a Purchase Order, an Authorized Participant agrees to facilitate the
deposit of the requisite amount of SOL or cash with the Trust’s Solana Custodian or Cash Custodian, respectively. If an Authorized Participant fails to consummate the foregoing, the Purchase Order will be cancelled. For cash creation transactions,
the Execution Agent will be responsible for acquiring the requisite amount of SOL on behalf of the Trust.
The Sponsor and Transfer Agent shall reject any purchase order or redemption order that is not in proper form. Upon receipt of the SOL deposit amount in the Trust’s Solana account, the Solana
Custodian will notify the Transfer Agent, the Authorized Participant and the Sponsor that the SOL has been deposited. The Transfer Agent will then direct DTC to credit the number of Shares created to the Authorized Participant’s DTC account.
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SOL transactions that occur on the blockchain are susceptible to delays due to Solana network outage, congestion, spikes in transaction fees demanded by validators, or other problems or
disruptions. To the extent that SOL transfers from the Trust’s Trading Balance to the Trust’s Prime Custody Vault are delayed due to congestion or other issues with the Solana network, such SOL will not be held in cold storage in the Prime Custody
Vault until such transfers can occur.
Cash Creation Transaction
The total cash deposit required to create each cash Creation Basket is an amount of cash equivalent to the amount of SOL described below in the subsection entitled “Determination of Required
Deposits,” plus any amount above the Benchmark on each Purchase Order Date that the Trust agrees to pay in order to acquire the required amount of SOL as described in the subsection entitled “Determination of Required Deposits.” The Sponsor causes
to be published each night the amount of SOL that will be acquired in exchange for each Purchase Order, from which can be computed the estimated amount of cash required to create each cash Creation Basket, prior to accounting for any additional
cash required to acquire the requisite amount of SOL if the price paid by the Trust is in excess of the Benchmark on each Purchase Order Date.
When purchasing Creation Baskets for cash, Authorized Participants will deliver cash to the Cash Custodian. The Execution Agent will be responsible for acquiring the requisite amount of SOL on
behalf of the Trust on an agency basis. Once the Execution Agent selects a Solana Counterparty, the Cash Custodian will transfer cash to the Solana Counterparty in payment for the requisite amount of SOL. The SOL acquired from the Solana
Counterparty will be transferred to the Solana Custodian. After receipt of the SOL by the Solana Custodian, the Transfer Agent will issue Creation Baskets of Shares to the creating Authorized Participant in satisfaction of the creation order.
The Execution Agent, pursuant to the oversight of the Sponsor, will decide how and with which Solana Counterparty to transact on the Trust’s behalf. The Trust will create Shares by receiving SOL
from a third-party that is not the Authorized Participant and the Trust (through the Execution Agent, on an agency basis)—not the Authorized Participant—is responsible for selecting the third-party to deliver the SOL. Further, the third-party will
not be acting as an agent of the Authorized Participant with respect to the delivery of the SOL to the Trust or acting at the direction of the Authorized Participant with respect to the delivery of the SOL to the Trust.
As between the Trust and the Authorized Participant, the expense and risk of the difference between the value of SOL calculated by the Administrator for daily valuation using the Benchmark and
the price at which the Trust acquires the SOL will be borne solely by the Authorized Participant to the extent that the Trust pays more for SOL than the price used by the Trust for daily valuation. Any such additional cash amount will be included
in the amount of cash calculated by the Administrator on the Purchase Order Date (identified as a variable transaction fee), communicated to the Authorized Participant on the Purchase Order Date, and wired by the Authorized Participant to the Cash
Custodian on the day following the Purchase Order Date. If the Solana Counterparty fails to deliver the SOL to the Solana Custodian, no cash is sent from the Cash Custodian to the Solana Counterparty, no Shares are transferred to the Authorized
Participant’s DTC account, the cash is returned to the Authorized Participant, and the Cash Purchase Order is cancelled.
In-Kind Creation Transactions
The total amount of SOL required to be deposited by an Authorized Participant to create each in-kind Creation Basket is described below in the subsection entitled “Determination of Required
Deposits.” The Sponsor causes to be published each night the amount of SOL that will be acquired in exchange for each Purchase Order.
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When purchasing Creation Baskets in-kind for SOL, Authorized Participants will deposit SOL related to the Authorized Participant’s purchase order with the Solana Custodian. After receipt of the SOL
by the Solana Custodian, the Transfer Agent will issue Creation Baskets of Shares to the creating Authorized Participant in satisfaction of the creation order.
Determination of Required Deposits
The quantity of SOL required to create each Creation Basket (“Creation Basket Deposit”) changes from day to day. On each day that the Exchange is open for regular trading, the Sponsor will
publish the Creation Basket after market close, which is composed of an amount of SOL or an amount of cash and/or SOL required to purchase a Creation Basket the following day. After the Trust’s NAV is struck on a Business Day, the Administrator
adjusts the quantity of SOL constituting the Creation Basket Deposit for the next Business Day as appropriate to reflect accrued expenses. The computation is made by the Administrator as promptly as practicable after 4:00 p.m. ET. The Administrator
calculates the Creation Basket Deposit for a given day by multiplying the NAV by the number of Shares in a Creation Basket (5,000) divided by the price of SOL at 4:00 p.m. ET as determined consistent with the Benchmark to determine the cash amount
required for a Creation Basket. Fractions of a SOL smaller than 0.00000001 are disregarded for purposes of the computation of the Creation Basket Deposit. Although the Administrator applies the SOL price to the calculation of the Creation Basket
value, the Administrator plays no role in the determination of the SOL price used by the Trust; rather the SOL price used in calculating the cash value of a Creation Basket is identical to the SOL price used in determining the Trust’s NAV.
Each Business Day, the Sponsor will communicate the final Creation Basket Deposit for that same Business Day and an estimated Creation Basket Deposit for the next Business Day. The Creation Basket
Deposit so determined is communicated daily via electronic mail message to all Authorized Participants. Authorized Participants may use the value of the SOL in the Creation Basket to estimate the amount of cash needed for a Purchase Order.
The date the Transfer Agent receives a valid Purchase Order will determine the Creation Basket Deposit the Authorized Participant needs to deposit. However, Purchase Orders received by the Transfer
Agent after 2:30 p.m. ET (or the close of regular trading on the Exchange, whichever is earlier) will be rejected and should be resubmitted on the following Business Day.
For cash creation transactions, to the extent there is a difference between the price actually paid by the Trust to acquire a Creation Basket worth of SOL in the creation process compared to the
cash value of the Creation Basket (i.e., if there is a difference between the amount paid by the Execution Agent on behalf of the Trust to purchase the requisite amount of SOL and the valuation of SOL as part of the Trust’s NAV calculation), that
difference will also be charged to the creating Authorized Participant in the form of a variable fee.
Delivery of Required Deposits
An Authorized Participant who places a Purchase Order must follow the procedures outlined in the “—Creation Procedures” section above. When purchasing Creation Baskets for cash, Authorized
Participants will deliver cash to the Cash Custodian. The Execution Agent will be responsible for acquiring the requisite amount of SOL on behalf of the Trust on an agency basis. Once the Execution Agent selects a Solana Counterparty, the Cash
Custodian will transfer cash to the Solana Counterparty in payment for the requisite amount of SOL. The SOL acquired from the Solana Counterparty will be transferred to the Solana Custodian. After receipt of the SOL by the Solana Custodian, the
Solana Custodian will notify the Sponsor
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and the Transfer Agent that the SOL has been received, and the Transfer Agent will direct DTC to credit the number of Creation Baskets ordered to an Authorized Participant’s DTC account on the
next Business Day following the Purchase Order Date.
When purchasing Creation Baskets in-kind with SOL, Authorized Participants deliver SOL to the Solana Custodian. After receipt of the SOL by the Solana Custodian, the Transfer Agent will direct
DTC to credit the number of Creation Baskets ordered to an Authorized Participant’s DTC account on the next Business Day following the Purchase Order Date.
The expense and risk of delivery and ownership of SOL until SOL has been received by the Solana Custodian on behalf of the Trust, including transaction fees from the Solana network’s blockchain,
will be borne solely by the Authorized Participant. If SOL is to be delivered to the Trust other than as described above, the Sponsor is authorized to establish such procedures and to appoint such custodians and establish such custody accounts as the
Sponsor determines to be desirable, or to reject such Purchase Order or Creation Basket Deposit.
Rejection of Purchase Orders
The Sponsor or its designee has the absolute right, but does not have any obligation, to reject any Purchase Order or Creation Basket Deposit if the Sponsor determines that:
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the Purchase Order or Creation Basket Deposit is not in proper form as described in the Authorized Participant Agreement;
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the acceptance of the Purchase Order or Creation Basket Deposit would not be in the best interest of the Trust;
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the acceptance of the Purchase Order or the Creation Basket Deposit would have adverse tax consequences to the Trust or its Shareholders;
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the acceptance of the Creation Basket Deposit presents a security or regulatory risk to the Trust, the Sponsor, the Transfer Agent or the Solana Custodian;
|
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the acceptance or receipt of the Purchase Order or Creation Basket Deposit would, in the opinion of counsel to the Sponsor, be unlawful; or
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circumstances outside the control of the Trust, the Sponsor or the Solana Custodian or Cash Custodian make it impractical or not feasible to process Creations Baskets.
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None of the Sponsor, the Transfer Agent or the Solana Custodian will be liable for the rejection of any Purchase Order or Creation Basket Deposit.
Redemption Procedures
An order to redeem Creation Baskets is a “Redemption Order.” On any Business Day, an Authorized Participant may place an order through the Transfer Agent’s electronic order delivery system to
redeem one or more Creation Baskets. The Transfer Agent will acknowledge the Redemption Order unless the Trustee or the Sponsor decides to refuse the deposit as described below under “Suspension or Rejection of Redemption Orders.” For cash
redemptions, Redemption Orders must be placed by the Cash Order Cutoff Time. For in-kind redemptions, Redemption Orders must be placed by the In-Kind Order Cutoff Time. The day on which a valid order is received by the Transfer Agent is considered
the “Redemption Order Date.”
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When a Redemption Order is received, the Trust will instruct the Solana Custodian to move the corresponding amount of SOL from the Trust’s Prime Custody Vault Balance to the Trading Balance by a
specified time on the settlement date. Transfers of SOL from the Trust’s Prime Custody Vault Balance to the Trust’s Trading Balance are “on-chain” transaction represented on the Solana blockchain.
SOL transactions that occur on the blockchain are susceptible to delays due to Solana network outages, congestion, spikes in transaction fees demanded by validators, or other problems or
disruptions. To the extent that SOL transfers from the Trust’s Prime Custody Vault to the Trust’s Trading Balance are delayed due to congestion or other issues with the Solana network, redemptions in the Trust could be delayed.
Disruption of services at the Solana Custodian would have the potential to delay settlement of the SOL related to Redemption Orders.
Cash Redemption Transactions
When redeeming Creation Baskets for cash, the Execution Agent will be responsible for selling the requisite amount of SOL on behalf of the Trust on an agency basis. Once the Execution Agent
selects a Solana Counterparty, the Solana Custodian will transfer SOL to the Solana Counterparty in return for the requisite cash payment. The cash received from the Solana Counterparty will be delivered to the Cash Custodian. After receipt of the
cash payment, the Transfer Agent will redeem the Shares and the Cash Custodian will distribute the resulting cash to the redeeming Authorized Participant in satisfaction of the Redemption Order. The Execution Agent, pursuant to the oversight of the
Sponsor, will decide how and with which Solana Counterparty to transact on the Trust’s behalf.
In connection with cash redemption transactions (and, as noted above, cash creation transactions), the Execution Agent, pursuant to the oversight of the Sponsor, will decide how and with which
Solana Counterparty to transact on the Trust’s behalf. The Trust will redeem shares by delivering SOL to a third-party that is not the Authorized Participant and the Trust (through the Execution Agent, on an agency basis)—not the Authorized
Participant—is responsible for selecting the third-party to receive the SOL. Further, the third-party will not be acting as an agent of the Authorized Participant with respect to the receipt of the SOL from the Trust or acting at the direction of
the Authorized Participant with respect to the receipt of the SOL from the Trust.
In-Kind Redemption Transactions
When redeeming Creation Baskets for SOL, the Transfer Agent will redeem the Shares and the Solana Custodian will distribute the resulting SOL to the redeeming Authorized Participant in
satisfaction of the redemption order.
The Trust instructs the Solana Custodian to prepare to move the associated SOL from the Trust’s Vault Balance with the Solana Custodian to the Trust’s Trading Balance with the Solana Custodian.
For settlement of a redemption, the Authorized Participant delivers the necessary Shares to the Trust and the Trustee instructs the Execution Agent to deliver the resulting SOL to the redeeming Authorized Participant .
Determination of Redemption Distribution
The redemption distribution from the Trust will consist of a transfer to the redeeming Authorized Participant of an amount of SOL or cash that is determined in the same manner as the
determination of Creation Basket Deposits discussed above.
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Delivery of Redemption Distribution
The redemption distribution due from the Trust will be delivered to the Authorized Participant within two Business Days following the Redemption Order date if, by 9:00 a.m. ET on such Business
Day, the Transfer Agent’s DTC account has been credited with the Creation Baskets to be redeemed. If the Transfer Agent’s DTC account has not been credited with all of the Creation Baskets to be redeemed by such time, the redemption distribution
will also be delayed. The expense and risk of delivery and ownership of SOL in redemption distributions, including transaction fees from the Solana network’s blockchain, will be borne solely by the Authorized Participant.
While the Fund generally intends to reserve sufficient amounts of unstaked SOL to satisfy foreseeable redemption requests, there may be circumstances in which a Redemption Order exceeds the
amount of unstaked SOL reserved by the Trust. When the Trust receives such a Redemption Order, the Sponsor will request to un-stake an amount of staked SOL, as necessary, to satisfy the Redemption Order. Staked SOL is subject to the Solana
network’s cooldown period before it can be transferred or sold, and the cooldown period is ordinarily around 48 hours. Accordingly, the Sponsor will typically satisfy these redemption requests within two business days.
The Solana network utilizes what is known as an “epoch-based” staking mechanism. When a user on the Solana network (such as the Sponsor) initiates a request to un-stake, the request does not
take effect immediately. It is queued and only processed at the end of the epoch. Each epoch on the Solana network lasts approximately two days. As a result, if the un-stake request is issued just after a new epoch has begun, the Trust may have to
wait nearly a full epoch before its SOL begins transitioning to an inactive (withdrawable) state. This means the total un-staking period could extend beyond two days. This could occur as a result of factors outside of the Trust’s control, such as
if the validator that it is utilizing to stake its SOL is offline, lagging or underperforming and its un-stake request is not processed at the desired time. Additionally, an extended cooldown period could occur during periods of uniquely high
transaction volume on the Solana network or general network instability on the Solana network. Furthermore, if the Solana network undergoes a network upgrade, the cooldown period for staked Solana could extend beyond two days.
For these, or any other reason, the Trust’s SOL may not become un-staked in a timely enough fashion to satisfy Redemption Orders within two business days without taking additional action.
A circumstance where the Trust was unable to satisfy Redemption Orders could have significant negative consequences for the Trust. Disruptions to the Trust’s creation and redemption mechanism
could widen the bid-ask spreads for the Shares or cause Shares to trade at an increased premium or discount to NAV. If Authorized Participants are unable to reliably redeem Baskets within the expected timeframe, they may decline to provide such
services to the Trust, which would cause additional increases in bid-ask spreads and larger premiums and discounts. Furthermore, the Sponsor and the Trust’s service providers could face reputational and regulatory scrutiny which could ultimately
have a negative impact on the Trust.
Suspension or Rejection of Redemption Orders
The Sponsor may, in its discretion, suspend the right of redemption, or postpone the redemption settlement date, (1) for any period during which the Exchange is closed other than customary weekend
or holiday closings, or trading on the Exchange is suspended or restricted, (2) for any period during which an emergency exists as a result of which delivery, disposal or evaluation of SOL is not reasonably practicable, (3) for such other period as
the Sponsor determines to be necessary for the protection of the Trust or its Shareholders (for example, where acceptance of the total deposit required to create each Creation Basket would have certain adverse tax consequences to the Trust or its
Shareholders), or (4) as agreed upon
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between the Sponsor and Authorized Participant. For example, the Sponsor may determine that it is necessary to suspend redemptions to allow for the orderly liquidation of the Trust’s assets. An
emergency could include situations where the Trust is unable to transact in SOL or where the Trust is unable to value its SOL holdings. Such a situation may arise when trading of SOL is suspended on one or more of the digital asset trading platforms
that are included in the Benchmark (for example, as a result of a significant technical failure, power outage or network error) or the Trust is unable to access the SOL in the Trust’s SOL custody account at the Solana Custodian due to technical or
operating issues at the Trust or the Solana Custodian. Because the Trust’s SOL transactions are expected to be effected by the Execution Agent over-the-counter, it is unlikely that the Trust’s SOL transactions would be directly impacted by a trading
halt on one or more digital asset trading platforms. However, such disruptions may have an effect on overall SOL liquidity or cause price spreads of SOL to widen. None of the Sponsor, the person authorized to take Redemption Orders in the manner
provided in the Authorized Participant Agreement, or the Solana Custodian will be liable to any person or in any way for any loss or damages that may result from any such suspension or postponement.
Redemption Orders must be made in whole Creation Baskets. The Sponsor or its designee has the absolute right, but does not have any obligation, to reject any Redemption Order if the Sponsor
determines that:
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the Redemption Order is not in proper form as described in the Authorized Participant Agreement;
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the acceptance of the Redemption Order would not be in the best interest of the Trust;
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the acceptance of the Redemption Order would have adverse tax consequences to the Trust or its Shareholders;
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the acceptance of the Redemption Order presents a security risk to the Trust, the Sponsor, the Transfer Agent or the Solana Custodian;
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the acceptance of the Redemption Order would, in the opinion of counsel to the Sponsor, be unlawful; or
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circumstances outside the control of the Trust, the Sponsor, or the Solana Custodian make it impractical or not feasible for the Shares to be delivered under the Redemption Order.
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The Sponsor may also reject a Redemption Order if the number of Shares being redeemed would reduce the remaining outstanding Shares to 100,000 Shares (i.e., 20 Creation Baskets) or less.
In the event that the Sponsor intends to suspend or postpone redemptions, it will provide Shareholders with notice in a prospectus supplement and/or through a current report on Form 8-K or in the
Trust’s annual or quarterly reports.
Creation and Redemption Transaction Fee
To compensate the Transfer Agent and/or Solana Custodian for expenses incurred in connection with the creation and redemption of Creation Baskets, an Authorized Participant may be required to
pay a transaction fee to the Transfer Agent and a Custody Transaction Fee to the Solana Custodian to create or redeem Creation Baskets, which are not expected to vary in accordance with the number of Creation Baskets in such order, except to the
extent that the fee in connection with a cash transaction is generally higher than the fee in connection with an in-kind transaction. The transaction fee may be reduced, increased or otherwise changed by the Sponsor and the Trust. The Sponsor will
notify Authorized Participants of any change in the transaction fee and will not implement any increase in the fee for the redemption of Shares until thirty (30) days after the date of notice. Additionally, for any creation or redemption
transaction, to the extent there is a difference (i) in the case of a creation for cash, between the price actually paid by the
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Trust to acquire a Creation Basket worth of SOL in the creation process compared to the cash value of the Creation Basket (i.e., if there is a difference between the amount paid by the Execution
Agent on behalf of the Trust to purchase the requisite amount of SOL and the valuation of SOL as part of the Trust’s NAV calculation); or (ii) in the case of a redemption for cash, between the cash proceeds of selling a Creation Basket worth of SOL
in the redemption value compared to the cash value of the Creation Basket (i.e., if there is a difference between the amount received by the Trust from a Solana Counterparty in selling the requisite amount of SOL and the valuation of SOL as part of
the Trust’s NAV calculation), that difference will also be charged to the creating Authorized Participant in the form of a variable fee.
Tax Responsibility
Authorized Participants are responsible for any transfer tax, sales or use tax, stamp tax, recording tax, value added tax or similar tax or governmental charge applicable to the creation or
redemption of Creation Baskets, regardless of whether or not such tax or charge is imposed directly on the Authorized Participant, and agree to indemnify the Sponsor and the Trust if they are required by law to pay any such tax, together with any
applicable penalties, additions to tax and interest thereon.
Secondary Market Transactions
As noted, the Trust will create and redeem Shares from time to time, but only in one or more Creation Baskets. The creation and redemption of Shares are made in exchange for delivery to the Trust
or the distribution by the Trust of the amount of SOL or cash determined as described above.
As discussed above, Authorized Participants are the only persons that may place orders to create and redeem Creation Baskets. Authorized Participants must be registered broker-dealers or other
securities market participants, such as banks and other financial institutions that are not required to register as broker-dealers to engage in securities transactions. An Authorized Participant is under no obligation to create or redeem Creation
Baskets, and an Authorized Participant is under no obligation to offer to the public any Shares it does create.
Authorized Participants that do offer to the public Shares from the Creation Baskets they create will do so at per-Share offering prices that reflect, among other factors, the value of the Trust’s
assets, supply of and demand for Shares and market conditions at the time of a transaction. Creation Baskets are generally redeemed when the market price per Share is at a discount to the NAV. Shares initially constituting the same Creation Basket
but offered by Authorized Participants to the public at different times may have different offering prices. An order for one or more Creation Baskets may be placed by an Authorized Participant on behalf of multiple clients. Authorized Participants
who make deposits with the Trust in exchange for Creation Baskets receive no fees, commissions or other forms of compensation or inducement of any kind from either the Trust or the Sponsor, and no such person has any obligation or responsibility to
the Sponsor to effect any sale or resale of Shares.
Shares are expected to trade in the secondary market on the Exchange. Shares may trade in the secondary market at prices that are lower or higher relative to their NAV. The amount of the discount
or premium in the trading price relative to the NAV may be influenced by various factors, including the value of the Trust’s assets, supply and demand for the Shares and market conditions at the time of a transaction.
USE OF PROCEEDS
Proceeds received by the Trust from the issuance of Creation Baskets consist of SOL in-kind and cash deposits. SOL deposits are held by the Solana Custodian on behalf of the Trust until (i)
delivered to Authorized Participants or their designated agent or client in connection with an in-kind redemption or sold
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in connection with a cash redemption or (ii) sold to pay the Sponsor’s Fee and Trust expenses of liabilities not assumed by the Sponsor. Cash deposits are held by the Cash Custodian on behalf of
the Trust until (i) transferred in connection with the purchase of SOL, (ii) delivered to Authorized Participants in connection with a redemption of Creation Baskets; or (iii) transferred to pay the Sponsor Fee or for extraordinary expenses and
liabilities not assumed by the Sponsor. If the Staking Condition has been satisfied and subject to any other applicable requirements related to the Staking Condition, proceeds may also be used in staking activities.
OWNERSHIP OR BENEFICIAL INTEREST IN THE TRUST
The beneficial interest in the Trust is divided into Shares. Each Share of the Trust represents an equal beneficial interest in the net assets of the Trust, and each holder of Shares is entitled to
receive such holder’s pro rata share of distributions of income and capital gains, if any.
All Shares are fully paid and non-assessable. No Share will have any priority or preference over any other Share of the Trust. All distributions, if any, will be made ratably among all Shareholders
from the assets of the Trust according to the number of Shares held of record by such Shareholders on the record date for any distribution or on the date of termination of the Trust, as the case may be. Except as otherwise provided by the Sponsor,
Shareholders will have no preemptive or other right to subscribe to any additional Shares or other securities issued by the Trust.
The Sponsor will have full power and authority, in its sole discretion, without seeking the approval of the Trustee or the Shareholders (a) to establish and designate and to change in any manner
and to fix such preferences, voting powers, rights, duties and privileges of the Trust as the Sponsor may from time to time determine, (b) to divide the beneficial interest in the Trust into an unlimited amount of Shares, with or without par value,
as the Sponsor will determine, (c) to issue Shares without limitation as to number (including fractional Shares), to such persons and for such amount of consideration, subject to any restriction set forth in the By-Laws, if any, at such time or times
and on such terms as the Sponsor may deem appropriate, (d) to divide or combine the Shares into a greater or lesser number without thereby materially changing the proportionate beneficial interest of the Shares in the assets held, and (e) to take
such other action with respect to the Shares as the Sponsor may deem desirable. The ownership of Shares will be recorded on the books of the Trust or the Transfer Agent for the Trust. No certificates certifying the ownership of Shares will be issued
except as the Sponsor may otherwise determine from time to time. The Sponsor may make such rules as it considers appropriate for the issuance of Share certificates, transfer of Shares and similar matters. The record books of the Trust as kept by the
Trust, or the Transfer Agent, as the case may be, will be conclusive as to the identity of the Shareholders and as to the number of Shares held from time to time by each.
CONFLICTS OF INTEREST
There are present and potential future conflicts of interest in the Trust’s structure and operation you should consider before you purchase Shares. The Sponsor will use this notice of conflicts as
a defense against any claim or other proceeding made. If the Sponsor is not able to resolve these conflicts of interest adequately, it may impact the Trust’s ability to achieve its investment objective.
The officers, directors and employees of the Sponsor do not devote their time exclusively to the Trust. These persons are directors, officers or employees of other entities which may compete with
the Trust for their services. They could have a conflict between their responsibilities to the Trust and to those other entities.
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The Sponsor has the authority to manage the investments and operations of the Trust, and this may allow it to act in a way that furthers its own interests which may create a conflict with your best
interests. Shareholders have very limited voting rights, which will limit their ability to influence matters such as amendment of the Trust Agreement, change in the Trust’s basic investment policy, dissolution of the Trust, or the sale or
distribution of the Trust’s assets.
The Sponsor serves as the sponsor to the Trust. The Sponsor may have a conflict to the extent that its trading decisions for the Trust may be influenced by the effect they would have on other funds
its affiliates may manage. In addition, the Sponsor may be required to indemnify its officers, directors and key employees with respect to their activities on behalf of other funds, if the need for indemnification arises. This potential
indemnification could cause the Sponsor’s assets to decrease. If the Sponsor’s other sources of income are not sufficient to compensate for the indemnification, it could cease operations, which could in turn result in Trust losses and/or termination
of the Trust.
If the Sponsor acquires knowledge of a potential transaction or arrangement that may be an opportunity for the Trust, it will have no duty to offer such opportunity to the Trust. The Sponsor will
not be liable to the Trust or the Shareholders for breach of any fiduciary or other duty if Sponsor pursues such opportunity or directs it to another person or does not communicate such opportunity to the Trust. Neither the Trust nor any Shareholder
has any rights or obligations by virtue of the Trust Agreement, the trust relationship created thereby, or this Prospectus in such business ventures or the income or profits derived from such business ventures. The pursuit of such business ventures,
even if competitive with the activities of the Trust, will not be deemed wrongful or improper.
The Sponsor, the Prime Broker, the Execution Agent and their respective affiliates and/or employees may hold or participate in transactions related to SOL, either for their own account or for the
account of others, such as clients. Such transactions may occur prior to, during, or after the commencement of this offering. Such transactions may not serve to benefit the Shareholders of the Trust and may have a positive or negative effect on the
value of the SOL held by the Trust and, consequently, on the market value of SOL. Because these parties may trade SOL for their own accounts at the same time as the Trust, prospective Shareholders should be aware that such persons may take positions
in SOL which are opposite, or ahead of, the positions taken for the Trust. There can be no assurance that any of the foregoing will not have an adverse effect on the performance of the Trust.
The Prime Broker and the Execution Agent may be subject to certain conflicts of interest, including: (i) the Trust’s orders may be routed to the Prime Broker’s own execution venue or to the
Execution Agent’s principal market, where the Trust’s orders may be executed against other customers of the Prime Broker or Execution Agent, or with the Prime Broker acting as principal, (ii) the beneficial identity of the counterparty purchaser or
seller with respect to the Trust’s orders may be unknown and therefore may inadvertently be another client of the Prime Broker or the Execution Agent, (iii) neither the Prime Broker nor the Execution Agent engages in front-running, but each is aware
of the Trust’s orders or imminent orders and may execute a trade for its own inventory (or the account of an affiliate) while in possession of that knowledge, and (iv) the Prime Broker or Execution Agent may act in a principal capacity with respect
to certain orders. As a result of these and other conflicts, when acting as principal, the Prime Broker or the Execution Agent may have an incentive to favor its own interests and the interests of its affiliates over the Trust’s interests. While the
Prime Broker and the Execution Agent each have in place procedures to mitigate conflicts of interest when executing the Trust’s orders, trading platforms or counterparties not used by the Prime Broker or Execution Agent may offer better prices and/or
lower costs than the platforms or counterparties used to execute the Trust’s orders.
The Execution Agent has adopted and implemented policies and procedures that are reasonably designed to ensure compliance with applicable law, including among others a Personal Trading Accounts
Policy, a
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Code of Ethics and Business Conduct, and a Global Policy on the Use of Confidential Information and the Prohibition of Insider Trading, which address certain conflicts of interest (together, the
“Policies”). Consistent with the requirements of the Policies, the Execution Agent will implement standard operating protocols under which personnel who have access to information about creation and redemption activity in Shares of the Trust (“Solana
Access Persons”) report and disclose personal trading activity and holdings in SOL. All of the Execution Agent’s employees will be required to preclear personal transactions in the Shares of the Trust. In addition, the Sponsor will adopt a Code of
Ethics that requires Solana Access Persons to report and pre-clear certain transactions in SOL, Shares of the Trust, and certain other digital assets. Finally, trading on behalf of clients in the shares of the Trust will be subject to controls
embedded in the Sponsor’s and the Execution Agent’s respective compliance programs and systems.
Resolution of Conflicts Procedures
The Trust Agreement provides that whenever a conflict of interest exists between the Sponsor or any of its affiliates, on the one hand, and the Trust or any Shareholders or any other person, on the
other hand, the Sponsor will resolve such conflict of interest considering the relative interest of each party (including its own interest) and the benefits and burdens relating to such interests, any customary or accepted industry practices, and any
applicable accepted accounting practices or principles.
DUTIES OF THE SPONSOR
The general fiduciary duties that would otherwise be imposed on the Sponsor (which would make its operation of the Trust as described herein impracticable due to the strict prohibition imposed by
such duties on, for example, conflicts of interest on behalf of a fiduciary in its dealings with its beneficiaries), will be replaced entirely by the terms of the Trust Agreement (to which terms all Shareholders, by subscribing to the Shares, are
deemed to consent). The Trust Agreement provides that the duty and authority to manage the affairs of the Trust is vested in the Sponsor, which duty and authority the Sponsor may further delegate.
Additionally, under the Trust Agreement, the Sponsor will have the power and authority as a sponsor of the Trust to cause the Trust, among other things:
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To own SOL, cash or IR Assets, to store SOL, cash or IR Assets with a Custodian, and to transfer SOL, cash or IR Assets;
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To litigate, compromise, arbitrate, settle or otherwise adjust claims in favor of or against the Trust or any matter in controversy, including claims for taxes;
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To operate as a trust with the purpose for which the Trust was established as described in the Trust Agreement, and exercise all the powers necessary or appropriate to the conduct of such operations;
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To issue, sell, repurchase, redeem, cancel, retire, acquire, hold, resell, reissue, transfer, dispose of and otherwise deal in Shares pursuant to applicable federal law; to establish terms and conditions including any fees or expenses
regarding the issuance, sale, repurchase, redemption, cancellation, retirement, acquisition, holding, resale, reissuance, disposition of or dealing in Shares; and to apply to any such repurchase, redemption, retirement, cancellation or
acquisition of Shares any funds or Trust property;
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In the event of an upcoming modification to the Solana network that could potentially result in a network fork, to cause the Solana Custodian, in consultation with the Sponsor, to either (i) disclaim all rights to the IR Assets so
created, (ii) sell the IR Assets as soon as reasonably practicable and thereafter distribute the cash proceeds to the Shareholders of record as of the date of the hard fork or airdrop that resulted in the Trust’s acquisition of the IR
Assets, or (iii) distribute the IR Assets in-kind as soon as reasonably practicable to the Shareholders of record as of the date of the hard
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fork or airdrop that resulted in the Trust’s acquisition of the IR Assets or to an agent acting on behalf of such Shareholders;
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To make such filings applications, statements, certificates, agreements and other instruments with the SEC, the Financial Industry Regulatory Authority or a national securities exchange as may be required by the federal securities laws or
other applicable regulations or as deemed necessary or desirable in the sole judgment of the Sponsor;
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To execute and deliver letters or documents to, or instruments for filing with, a depository relating to the Shares to be issued by the Trust and also any filing required to be made as determined by the Sponsor and any other filing or
application necessary or desirable as determined by the Sponsor in connection with the registration and/or offering of Shares by the Trust;
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To negotiate the terms of, and execute on behalf of the Trust, any agreement, including, but not limited to, any underwriting agreement or purchase agreement relating to the Shares to be issued by the Trust as determined by the Sponsor;
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To do all other acts which, in the Sponsor’s judgment, are reasonably necessary or desirable for the registration and/or offering of Shares by the Trust;
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To stake or delegate to an affiliate of the Sponsor, a Custodian, an affiliate of the Custodian, or another third-party to Stake SOL on the Solana network or other digital assets on another digital asset network, as applicable;
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To borrow money, SOL or other digital assets and in this connection issue notes or other evidence of indebtedness; to secure such borrowings by mortgaging, pledging or otherwise subjecting as security the Trust property; and to endorse,
guarantee, or undertake the performance of an obligation or engagement of any other Person and to lend Trust property;
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To retain independent public accountants to audit the accounts of the Trust and employ attorneys to represent the Trust; and
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To enter into contracts and carry on any other activities in connection with or incidental to any of the foregoing powers or with the furtherance of the Trust’s purpose.
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The Sponsor will perform its duties in its subjective good faith belief as to what is in or not opposed to the best interests of the Trust, but only consistent with the terms of the Trust
Agreement.
LIABILITY AND INDEMNIFICATION
Trustee
The Trustee shall not be liable for any action reasonably taken, suffered or omitted by it in good faith and believed by it to be authorized or within the discretion or rights or powers conferred
upon it by the Trust Agreement. The Trustee shall not have any obligation or duty to supervise or monitor the performance of any other person, including the Trust or the Sponsor, and shall have no liability for the failure of any other person to
perform its obligations or duties under the agreements to which the Trust or the Trustee is a party or otherwise. The Trustee will not be personally liable under any circumstances, except for its own willful misconduct, bad faith or gross negligence.
In particular, but not by way of limitation:
(a) the duties and obligations of the Trustee shall be determined solely by the express provisions of the Trust Agreement;
(b) the Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in the Trust Agreement;
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(c) no implied covenants, duties (including fiduciary duties and duties existing at law or in equity) or obligations shall be read into the Trust
Agreement against the Trustee;
(d) in the absence of willful misconduct on the part of the Trustee, the Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Trustee and conforming to the requirements of the Trust Agreement;
(e) the Trustee shall not be liable for an error of judgment made in good faith by an officer or employee of the Trustee except to the extent such
error of judgment constituted gross negligence;
(f) the Trustee shall not be liable with respect to any action taken, suffered or omitted to be taken by it in good faith in accordance with the
direction of the Sponsor or any other person with the right to direct the Trustee;
(g) no provision of the Trust Agreement shall require the Trustee to expend or risk its personal funds or otherwise incur any financial liability in
the performance of its rights or duties under the Trust Agreement, if the Trustee shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured or provided to
it;
(h) under no circumstance shall the Trustee be personally liable for any representation, warranty, covenant, agreement or indebtedness of the Trust;
(i) the Trustee shall not be personally responsible for or in respect of the genuineness, form or value of the Trust property, the validity or
sufficiency of the Trust Agreement or for the due execution hereof by the Sponsor; and
(j) in the event that the Trustee is unsure of the course of action to be taken by it hereunder, the Trustee may request instructions from the Sponsor
and to the extent the Trustee follows such instructions in good faith it shall not be liable to any person. In the event that no instructions are provided within the time requested by the Trustee, it shall have no duty or liability for its failure to
take any action or for any action it takes in good faith.
The Trustee will have no liability for the failure to respond to any instructions or directions that it has not actually received. The Trustee also will not be liable for any losses, costs or expenses arising
directly or indirectly from the Trustee's reliance upon and compliance with such instructions notwithstanding that such instructions conflict, or are inconsistent, with a subsequent written instruction.
The Trustee is under no obligation to exercise any of the duties or powers vested in it by the Trust Agreement; or to make any investigation of matters arising under the Trust Agreement; or to institute, conduct or
defend any litigation under the Trust Agreement or in relation thereto; or (except in certain limited circumstances) to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, approval, bond or other paper or document, unless requested in writing to do so by the Sponsor.
The Trustee may execute any of the trusts or powers vested in it by the Trust Agreement or perform any of its duties under the Trust Agreement either directly or by or through agents, nominees,
or attorney-in-fact appointed with due care and shall not be responsible for any willful misconduct or negligence on the part of any agent, custodian, nominee or attorney-in-fact so appointed, provided that the appointment of any
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agent, custodian, nominee or attorney-in-fact shall not relieve the Trustee of any of its obligations or liabilities under the Trust Agreement.
Except as otherwise provided in Section 2.2 of the Trust Agreement, in accepting the trust created by the Trust Agreement, the Trustee acts solely as a trustee under the Trust Agreement and not
in its individual capacity, and all persons having any claim against the Trustee by reason of the transactions contemplated by the Trust Agreement will look only to the Trust’s property for payment or satisfaction thereof.
The Trustee will not be liable for special, indirect, punitive or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Trustee has been
advised of the likelihood of such loss or damage and regardless of the form of action. In no event shall the Trustee hereto be liable for any failure or delay in the performance of its obligations under the Trust Agreement or any related documents
because of circumstances beyond its control.
Under the Trust Agreement, the Trust has agreed to be primary obligor and to indemnify, defend and hold harmless the Trustee, in its individual capacity and in its capacity as Trustee and any of
the officers, directors, employees, affiliates and agents of the Trustee (the “Indemnified Persons”) from and against any and all losses, damages, liabilities, claims, actions, suits, costs, expenses, disbursements (including reasonable legal fees
and expenses in connection with enforcement of its rights to indemnity under the Trust Agreement and including the reasonable fees and expenses of counsel), taxes and penalties of any kind and nature whatsoever (collectively, “Expenses”), to the
extent that such Expenses arise out of or are imposed upon or asserted at any time against such Indemnified Persons with respect to the performance of the Trust Agreement, the creation, operation or termination of the Trust or the transactions
contemplated by the Trust Agreement; provided, however, that the Trust shall not be required to indemnify any Indemnified Person for any Expenses which are a result of the willful misconduct, bad faith or gross negligence of an Indemnified Person.
As security for any amounts owing to the Trustee under the indemnification provisions of the Trust Agreement described above, the Trustee shall have a lien against the Trust’s property, which lien
shall be prior to the rights of the Sponsor or any other Shareholder of the Trust. The obligations of the Sponsor and the Trust to indemnify the Indemnified Persons will survive the termination of the Trust Agreement.
Sponsor
The Trust Agreement provides that the Trust will indemnify, defend and hold harmless the Sponsor, in its capacity as Sponsor, and any of the officers, directors, employees, affiliates and agents of
the Sponsor (the “Sponsor Indemnified Persons”) from and against any and all Expenses, to the extent that such Expenses arise out of or are imposed upon or asserted at any time against such Sponsor Indemnified Persons with respect to the performance
of the Trust Agreement, the creation, operation or termination of the Trust or the transactions contemplated by the Trust Agreement; provided, however, that the Trust shall not be required to indemnify any Sponsor Indemnified Person for any Expenses
which are a result of the willful misconduct, bad faith or gross negligence of a Sponsor Indemnified Person. To the fullest extent permitted by law, Expenses to be incurred by a Sponsor Indemnified Person shall, from time to time, be advanced by, or
on behalf of, the Trust prior to the final disposition of any matter upon receipt by the Trust of an undertaking by, or on behalf of, such Sponsor Indemnified Person to repay such amount if it shall be determined that the Sponsor Indemnified Person
is not entitled to be indemnified under the Trust Agreement. The obligations of the Trust to indemnify the Sponsor Indemnified Parties will survive the termination of the Trust Agreement.
The Trust Agreement provides that (i) whenever a conflict of interest exists or arises between the Sponsor, on the one hand, and the Trust, on the other hand; or (ii) whenever the Trust Agreement
or any other
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agreement contemplated in the Trust Agreement provides that the Sponsor will act in a manner that is, or provides terms that are, fair and reasonable to the Trust, any Shareholder or any other
person, the Sponsor will use its good faith efforts to resolve such conflict of interest, take such action or provide such terms, considering in each case the relative interest of each party (including its own interest) to such conflict, agreement,
transaction or situation and the benefits and burdens relating to such interests, any customary or accepted industry practices, and any applicable generally accepted accounting practices or principles. In the absence of bad faith by the Sponsor,
the resolution, action or terms so made, taken or provided by the Sponsor will not constitute a breach of the Trust Agreement or any other agreement contemplated therein or of any duty or obligation of the Sponsor at law or in equity or otherwise.
VOTING BY SHAREHOLDERS; MANAGEMENT
The Shareholders of the Trust take no part in the management or control of, and have no voice in, the Trust’s operations or business. Shareholders will have no voting rights under the Trust
Agreement, except as authorized in the Sponsor's sole discretion. It is currently anticipated that Shareholders will possess no voting rights except as required by the listing rules of the Exchange or applicable law to which the Trust is subject.
The Sponsor, in its sole discretion, will generally have the right to amend the Trust Agreement without the consent of any Shareholders as it applies to the Trust provided that any amendment
that imposes or increases any fees or charges or prejudices a substantial existing right of the Shareholders will not become effective until thirty (30) days after notice of such amendment is given to the Shareholders. Any amendment shall be
effective on such date as designated by the Sponsor in its sole discretion. No amendment affecting the Trustee will be binding upon or effective against the Trustee unless consented to by the Trustee.
Liquidation and Voting Rights. The Sponsor will act to terminate the Trust upon the agreement of Shareholders owning at least seventy-five (75) percent of the outstanding Shares. Consistent with
the Trust Agreement, upon dissolution of the Trust, the Trustee will wind up the business and affairs of the Trust and direct the Execution Agent to sell all the SOL remaining in the Trust in an orderly manner. Following the liquidation of the
Trust’s SOL, any remaining outstanding Shares will be redeemed for cash and distributed to Shareholders in accordance with the provisions of the Trust Agreement.
The Trust does not have any directors, officers or employees. The creation and operation of the Trust has been arranged by the Sponsor. Under the Trust Agreement, all management functions of the
Trust will be delegated to and will be conducted by the Sponsor, its agents and its affiliates, including the Solana Custodian. The following persons, in their respective capacities as officers of the Sponsor perform certain functions with respect to
the Trust that, if the Trust had officers, would typically be performed by them.
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Name
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Capacity
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Brian Hartigan*
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Chief Executive Officer, Board of Managers
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Peter Hubbard
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Vice President and Director of Portfolio Management
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Jordan Krugman*
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Board of Managers
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Terry Gibson Vacheron
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Chief Financial Officer
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Kelli Gallegos*
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Principal Financial and Accounting Officer, Investment Pools
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Melanie Zimdars
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Chief Compliance Officer
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Melanie Ringold*
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Board of Managers
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* Executive officer of the Trust, within the meaning of Rule 3b-7 under the Exchange Act.
The Sponsor is managed by a Board of Managers. The Board of Managers is composed of Messrs. Hartigan and Krugman and Ms. Ringold.
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Brian Hartigan (45) has been Chief Executive Officer of the Sponsor since November 2023. In this role, he has general oversight responsibilities for all of
the Sponsor’s business. Mr. Hartigan has been a Member of the Board of Managers of the Sponsor since November 2023. Previously, Mr. Hartigan was Global Head of ETF Investments and Indexed Strategies at Invesco Ltd., a global investment management
company and affiliate of the Sponsor, since 2015. In that role, he was responsible for oversight of all portfolio management activities of exchange-traded funds (ETFs), as well as providing support to the US ETF Board, serving as a global ETF
expert/resource and providing day-to-day support. In addition, he was a team leader for Invesco’s unit investment trusts. Mr. Hartigan earned a BA degree from the University of St. Thomas in Minnesota and an MBA in finance from DePaul University. He
is a Chartered Financial Analyst® (CFA) charterholder and a member of the CFA Society of Chicago.
Peter Hubbard (43) joined the Sponsor in May 2005 as a portfolio manager and has been Vice President, Director of Portfolio Management since September
2012. In his role, Mr. Hubbard manages a team of eight portfolio managers. His responsibilities include facilitating all portfolio management processes associated with more than 200 equity and fixed income Invesco Funds listed in the United States,
Canada and Europe. He is a graduate of Wheaton College with a B.A. degree in Business & Economics.
Jordan Krugman (46) is Chief Financial Officer of the Americas for Invesco Ltd., a global investment management company affiliated with the Sponsor. He
was appointed to this position in October 2020. In this capacity, Mr. Krugman is responsible for general management support, in addition to executing on various strategic initiatives and overseeing the financial framework for the business units
operating within the Americas division of Invesco Ltd. He has also served as a Member of the Board of Managers of the Sponsor since October 2020. From March 2019 to October 2020, Mr. Krugman served as the Global Head of Financial Planning and
Analysis at Invesco Ltd. In this role, he was responsible for overseeing Invesco’s forecasting, budgeting strategic planning and financial target setting processes, including analytics and decision support for Invesco Ltd.’s executive team. From
March 2017 to March 2019, Mr. Krugman served as Invesco Ltd.’s Head of Finance & Corporate Strategy, North America. In this role, Mr. Krugman was responsible for strategic and financial planning for Invesco Ltd.’s global investments
organization including global real estate, private equity and global fixed income. Prior to that, Mr. Krugman was Invesco Ltd.’s Treasurer and Head of Investor Relations from May 2011 to March 2017. In this role, he was responsible for management
of Invesco Ltd.’s liquidity and capital management programs. Additionally, Mr. Krugman managed the communication with Invesco Ltd.’s external stakeholders including equity shareholders, debt investors, rating agencies, and research analysts. Mr.
Krugman earned a BA degree in American civilizations, with a U.S. history concentration, from Middlebury College in Vermont in 1999, and earned an MBA from Santa Clara University in California in 2007. He is a Certified Treasury Professional (CTP).
Terry Vacheron CPA (59) is the Chief Accounting Officer (since April
2022) and Head of Global Tax (since November 2020) at Invesco Ltd. In this role, she leads the company’s financial reporting, accounting, corporate tax, payroll, and SOX functions. Ms. Vacheron also serves as the Chief Financial Officer (since June
2022) of the Sponsor and Invesco Advisers Inc. where she is responsible for overseeing all aspect of the companies’ financial operations, including financial reporting and accounting. Ms. Vacheron joined Invesco in November 2020 following a brief
break while between roles in October 2020. Prior to joining the firm, she was with SunTrust Bank (and later Truist Bank, which was formed in 2019 following the merger of BB&T and SunTrust) from October 2009 until September 2020, where she
served as the Chief Tax Officer. Ms. Vacheron directed the full spectrum of corporate tax matters and led the tax merger integration effort for the BBT and SunTrust merger. In an overlapping role as the Corporate Functions Risk Officer at SunTrust Bank from March 2013 to December 2019, she built and led multiple corporate risk programs to identify and manage risk while maintaining her Chief Tax Officer responsibilities. During her
tenure, she oversaw the implementation of stronger guidelines and accountability for risk programs, including SOX, third-party risk management, and operational risk oversight. Ms. Vacheron earned a BS degree in accounting from the University of
Tennessee. She is a Certified Public Accountant (CPA). Ms.
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Vacheron served on the board of the United Way of Greater Atlanta from 2013 to 2020. She served as a member of the United Way’s Community Engagement Council and is currently on the United Way’s
Finance Committee.
Kelli Gallegos (53) has been Principal Financial and Accounting Officer—Investment Pools for the Sponsor since September 2018. Additionally, since
September 2018, Ms. Gallegos has been Principal Financial and Accounting Officer – Investment Pools of Invesco Specialized Products, LLC (sponsor to a suite of currency exchange-traded funds, “ISP”), Head of North America Fund Reporting of Invesco,
Ltd. (“Invesco”, a global investment management company), and Vice President and Treasurer of Invesco Exchange Traded Fund Trust, Invesco Exchange-Traded Fund Trust II, Invesco India Exchange-Traded Fund Trust, Invesco Actively Managed
Exchange-Traded Fund Trust, Invesco Actively Managed Exchange-Traded Commodity Fund Trust, and Invesco Exchange-Traded Self-Indexed Fund Trusts (each a registered investment company offering series of exchange-traded funds, the “Invesco ETFs”). She
also serves as Vice President (since March 2016), Principal Financial Officer (since March 2016) and Assistant Treasurer (since December 2008) for a suite of mutual funds advised by Invesco Advisers, Inc., a registered investment adviser (the
“Invesco Funds”). In her roles with the Sponsor, ISP, Invesco, the Invesco ETFs, and the Invesco Funds, Ms. Gallegos has financial and administrative oversight responsibilities for, and serves as Principal Financial Officer of the Invesco ETFs, the
Trust and the exchange-traded funds for which ISP serves as sponsor (the “CurrencyShares Trusts”). Previously, she was Director of Fund Financial Services from December 2008 to September 2018, Assistant Treasurer for the Sponsor from January 2013
to September 2018, Assistant Treasurer of ISP from April 2018 to September 2018, Assistant Treasurer for the Invesco ETFs from September 2014 to September 2018 and Assistant Vice President for the Invesco Funds from December 2008 to March 2016. In
such roles, Ms. Gallegos managed the group of personnel responsible for the preparation of fund financial statements and other information necessary for shareholder reports, fund prospectuses, regulatory filings, and for the coordination and
oversight of third-party service providers of the Trust, the Invesco ETFs, the Invesco Funds, and the CurrencyShares Trusts. Ms. Gallegos earned a BBA in accounting from Harding University in Searcy, AR.
Melanie H. Zimdars (47) has been Chief Compliance Officer of the Sponsor since November 2017. In this role she is responsible for all aspects of
regulatory compliance for the Sponsor. Ms. Zimdars has also served as Chief Compliance Officer of Invesco Exchange-Traded Fund Trust, Invesco Exchange-Traded Fund Trust II, Invesco India Exchange-Traded Fund Trust, Invesco Actively Managed
Exchange-Traded Fund Trust and Invesco Actively Managed Exchange-Traded Commodity Fund Trust since November 2017. From September 2009 to October 2017, she served as Vice President and Deputy Chief Compliance Officer at ALPS Holdings, Inc. where she
was Chief Compliance Officer for six different mutual fund complexes, including active and passive ETFs and open-end and closed-end funds. Through its subsidiary companies, ALPS Holdings, Inc. is a provider of investment products and customized
servicing solutions to the financial services industry. Ms. Zimdars received a BS degree from the University of Wisconsin-La Crosse.
Melanie Ringold (48) has been a Member of the Board of Managers of the Sponsor since July 2024. Ms. Ringold has also served as Head of Legal for the Americas
at Invesco Ltd., a global investment management company and affiliate of the Sponsor, since January 2023. In this role, she is responsible for overseeing legal support for all of Invesco’s Americas business. Prior to her current position, Ms. Ringold
served as Assistant General Counsel from March 2011 until January 2023, where she was responsible for overseeing legal support for the investments organization and co-chairing the firm’s US Regulatory Change Committee. Ms. Ringold earned a JD from
the University of Houston Law Center and a BA degree in political science from the University of Michigan.
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BOOKS AND RECORDS
The Trust keeps its books of record and account at the office of the Sponsor or at the offices of the Administrator, or such office, including of an administrative agent, as it may subsequently
designate upon notice. The books and records are open to inspection by any person who establishes to the Trust’s satisfaction that such person is a Shareholder upon reasonable advance notice at all reasonable times during usual business hours of the
Trust.
The Trust will keep a copy of the Trust Agreement on file in the Sponsor’s office, which will be available for inspection by any Shareholder at all times during its usual business hours upon
reasonable advance notice.
STATEMENTS, FILINGS, AND REPORTS TO SHAREHOLDERS
After the end of each fiscal year, the Sponsor will cause to be prepared an annual report for the Trust containing audited financial statements. The annual report will be in such form and contain
such information as will be required by applicable laws, rules and regulations and may contain such additional information that the Sponsor determines shall be included. The annual report will be filed with the SEC and the Exchange and will be
distributed to such persons and in such manner, as is required by applicable laws, rules and regulations.
The Sponsor is responsible for the registration and qualification of the Shares under the federal securities laws. The Sponsor will also prepare, or cause to be prepared, and file any periodic
reports or updates required under the Exchange Act. The Administrator will assist and support the Sponsor in the preparation of such reports.
The Administrator will make such elections, file such tax returns, and prepare, disseminate and file such tax reports, as it is advised to by its counsel or accountants or as required from time to
time by any applicable statute, rule or regulation.
FISCAL YEAR
The fiscal year of the Trust is the period ending December 31 of each year. The Sponsor may select an alternate fiscal year.
GOVERNING LAW; CONSENT TO DELAWARE JURISDICTION
The rights of the Sponsor, the Trust, DTC (as registered owner of the Trust’s global certificate for Shares) and the Shareholders are governed by the laws of the State of Delaware. The Sponsor, the
Trust, and, by accepting Shares, each DTC Participant and each Shareholder, consent to the exclusive jurisdiction of the Court of Chancery of the State of Delaware or, if such court does not have subject matter jurisdiction, any other courts located
in Delaware for any claims, suits, actions or proceedings, provided that (i) the forum selection provisions do not apply to suits brough to enforce a duty or liability created by the Exchange Act or any other claim for which the federal courts have
exclusive jurisdiction and (ii) the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under any federal securities law. By purchasing Shares in
the Trust, Shareholders waive certain claims that the courts of the State of Delaware and any other courts located in Delaware is an inconvenient venue or is otherwise inappropriate.
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LEGAL MATTERS
Litigation and Claims
Within the past five years of the date of this Prospectus, there have been no material administrative, civil or criminal actions against the Sponsor, the Trust or any principal or affiliate of any
of them. This includes any actions pending, on appeal, concluded, threatened, or otherwise known to them.
Legal Opinions
The validity of the Shares will be passed upon for the Sponsor by [Stradley Ronon Stevens & Young, LLP]. Certain opinions of counsel have been filed with the SEC as exhibits to the Registration
Statement of which this Prospectus is a part.
EXPERTS
The financial statement as of October 16, 2025 included in this Prospectus has been so included in reliance on the report of PricewaterhouseCoopers LLP, an independent registered public
accounting firm, given on the authority of said firm as experts in auditing and accounting.
MATERIAL CONTRACTS
Trust Agreement
The following is a description of the material terms of the Trust Agreement.
Appointment and Duties of Trustee
The Trust Agreement provides that the Trustee is appointed to serve as the trustee of the Trust in the State of Delaware for the sole purpose of satisfying the requirement of Section 3807(a) of the
Delaware Act that the Trust have at least one trustee with a principal place of business in Delaware. The Sponsor shall have the exclusive authority to manage the affairs of the Trust as an agent of the Trust pursuant to Section 3806(b)(7) of the
Delaware Act.
Under the Trust Agreement, the Trustee has no obligation to supervise or monitor the Trust’s service providers or otherwise manage the Trust. The duties of the Trustee shall be limited to (i)
accepting legal process served on the Trust in the State of Delaware and (ii) at the direction of the Sponsor, the execution of any certificates required to be filed with the Secretary of State of the State of Delaware which the Trustee is required
to execute under Section 3811 of the Delaware Act.
The Trust Agreement provides that the Trustee shall serve for the duration of the Trust and until the effective date of the Trustee’s resignation. The Trustee may resign upon sixty (60) days’ prior
notice to the Sponsor, which shall promptly appoint a successor. If no successor has been appointed by the Sponsor within such sixty (60) day period, the Trustee may, at the expense of the Trust, petition a court to appoint a successor trustee.
Jurisdiction and Waiver of Jury Trial
The Trust Agreement provides that the Court of Chancery of the State of Delaware or, if such court does not have subject matter jurisdiction, any other courts located in Delaware will be the
exclusive jurisdiction for any claims, suits, actions or proceedings, provided that the federal district courts of the United States of
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America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under any federal securities law. By purchasing Shares in the Trust, Shareholders waive
certain claims that the courts of the State of Delaware and any other courts located in Delaware is an inconvenient venue or is otherwise inappropriate. As such, Shareholder could be required to litigate a matter relating to the Trust in a Delaware
court, even if that court may otherwise be inconvenient for the Shareholder.
Matters Pertaining to Shares and Shareholders of the Trust
The Trust Agreement authorizes the Trust to issue an unlimited number of shares unless otherwise determined and subject to any conditions set forth by the Sponsor. The Trust will issue and redeem
the Shares in Creation Baskets only to certain Authorized Participants on an ongoing basis, or to such other purchaser or purchasers, including the Seed Capital Investor, as otherwise determined by the Sponsor in its sole discretion, and only in
exchange for SOL and/or cash. The creation and redemption mechanics are further described above under “Creation and Redemption of Shares.”
The Trust Agreement provides that all of the Shares are of the same class with equal rights and privileges. Each of the Shares is transferable, is fully paid and nonassessable and entitles the
holder to vote on the limited matters upon which Shareholders may vote under the Trust Agreement. The Shares do not entitle their holders to any conversion or pre-emptive rights or, except as provided below, any redemption rights or rights to
distributions. Shareholders have no voting rights, except as authorized in the Sponsor's sole discretion. It is currently anticipated that Shareholders will possess no voting rights except as required by the listing rules of the Exchange or
applicable law to which the Trust is subject. Shareholder voting rights are further described above under “Voting by Shareholders; Management—Liquidation and Voting Rights.”
Powers and Duties of the Sponsor
The Trust Agreement provides that the duty and authority to manage the affairs of the Trust is vested in the Sponsor, which duty and authority the Sponsor may further delegate, all pursuant to
Section 3806(b)(7) of the Delaware Act. The duties of the Sponsor under the Trust Agreement are further described above under “Duties of the Sponsor.”
Indemnification
Under the Trust Agreement, the Trustee and the Sponsor will have a right to be indemnified by the Trust for certain liabilities or expenses that each incurs without gross negligence, bad faith or
willful misconduct on its part.
Amendments
The Trust Agreement provides that it may be amended by the Sponsor in its sole discretion and without the Shareholders’ consent. Any such amendment to the Trust Agreement will be effective on such
date as designated by the Sponsor in its sole discretion, except that any amendment that imposes or increases any fees or charges or prejudices a substantial existing right of the Shareholders will not become effective until thirty (30) days after
notice of such amendment is given to the Shareholders. However, any amendment to the Trust Agreement that affects the rights or duties of the Trustee will require the Trustee’s prior written consent. Every Shareholder, at the time any amendment so
becomes effective, will be deemed, by continuing to hold any Shares or an interest therein, to consent and agree to such amendment and to be bound by the Trust Agreement as amended thereby.
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Tax Matters
The Trust Agreement provides that the Sponsor intends that the Trust shall be treated, for federal, state and local income tax purposes, as a grantor trust, and that, notwithstanding anything
contained in the Trust Agreement to the contrary, neither the Sponsor nor the Trustee, nor any other person acting for or on behalf of the Trust, shall take any action that is inconsistent with such treatment.
Governing Law
The validity and construction of the Trust Agreement and all amendments thereto shall be governed by the laws of the State of Delaware, and the rights of all parties hereto and the effect of
every provision thereof shall be subject to and construed according to the laws of the State of Delaware without regard to the conflicts of law provisions thereof; provided, however, that causes of action for violations of U.S. federal or state
securities laws are not governed by this limitation.
Derivative Actions
Under the Trust Agreement, no person who is not a Shareholder shall be entitled to bring any derivative action, suit or other proceeding on behalf of the Trust. The Trust Agreement provides that no
Shareholder may maintain a derivative action on behalf of the Trust unless holders of at least ten percent (10%) of the outstanding Shares join in the bringing of such action. In addition to the requirements set forth in Section 3816 of the Delaware
Act, a Shareholder may bring a derivative action on behalf of the Trust only if it meets additional conditions described in the Trust Agreement.
Merger and Consolidation
Under the Trust Agreement, the Sponsor may cause (i) the Trust to be merged into or consolidated with, converted to or to sell all or substantially all of its assets to, another trust or entity;
(ii) the Shares of the Trust to be converted into beneficial interests in another statutory trust (or series thereof); or (iii) the Shares of the Trust to be exchanged for units in another trust or company under or pursuant to any U.S. state or
federal statute to the extent permitted by law. Under the Trust Agreement, the Sponsor, with written notice to the Shareholders, may approve and effect any such transactions without any vote or other action of the Shareholders, but will not do so if
doing so would cause the Trust, its successor or other trust or company in which the Shareholders hold beneficial interests as a result of such transaction to fail or cease to qualify as a grantor trust for U.S. federal income tax purposes and any
purported approval or effecting of such a transaction shall be null and void ab initio and without legal effect.
Term and Termination
The Trust has no fixed termination date. The Trust may dissolve at the written direction of the Sponsor under the circumstances described in the section titled “Additional Information About the
Trust—Dissolution of the Trust,” above. On and after the date of dissolution of the Trust, the Sponsor shall wind up the Trust’s business and affairs in its sole discretion in accordance with the Delaware Act and upon completion of the winding up of
the Trust’s business and affairs by the Sponsor in accordance with the Delaware Act, including the payment of the expenses of liquidation and termination and any fee to the Transfer Agent in connection therewith and payment of any applicable taxes or
other governmental charges, Shareholders will be entitled to the distribution of the amount of trust property (paid in cash) represented by those Shares upon surrender or termination of the Shares then held. Upon completion of the winding up of the
Trust’s business and affairs by the Sponsor, the Trustee shall, at the written direction and expense of the Sponsor, file a certificate of cancellation in accordance with the Delaware Act and thereafter shall be
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released from any further duties or liabilities. Any remaining expenses of the Trust shall be paid by the Sponsor.
The Sponsor will act to terminate the Trust upon the agreement of Shareholders owning at least seventy-five (75) percent of the outstanding Shares.
Trust Administration and Accounting Agreement
Pursuant to the Trust Administration and Accounting Agreement, the Administrator is generally responsible for the day-to-day administration of the Trust. The responsibilities of the Administrator
include (i) establishing appropriate expense accruals and compute expense ratios, maintaining expense files and coordinating the payment of Trust approved invoices; (ii) calculating Trust approved income and per Share amounts required for periodic
distributions to be made by the Trust; (iii) calculating total return information; (iv) coordinating the Trust’s annual audit; (v) supplying various normal and customary portfolio and Trust statistical data as requested on an ongoing basis; and (vi)
preparing financial statements for the Trust.
The responsibilities of the Administrator also include providing various valuation and computation accounting services for the Trust, including (i) maintaining certain financial books and records
for the Trust, including creation and redemptions books and records, and Trust accounting records; (ii) computing the Trust’s NAV; (iii) obtaining quotes from pricing services as directed and approved by the Sponsor, or if such quotes are
unavailable, then obtaining such prices from the Sponsor, and in either case, calculating the market value of the Trust’s assets in accordance with the Trust’s valuation policies or guidelines; and (iv) transmitting or making available a copy of the
daily portfolio valuation to the Sponsor.
The Trust will indemnify the Administrator and any affiliate of the Administrator (“Administrator Indemnitees”), and the Administrator Indemnitees will incur no liability for its reliance upon (i)
any law, act, regulation or interpretation of the same even though the same may thereafter have been altered, changed, amended or repealed, (ii) the Trust’s offering materials or documents (excluding information provided by the Administrator), (iii)
any instructions or (iv) any written opinion of legal counsel for the Trust or the Administrator, or arising out of transactions or other activities of the Trust which occurred prior to the commencement of the Trust Administration and Accounting
Agreement; provided however, that the Trust shall not indemnify any Indemnitee for any losses arising out of the Administrator Indemnitees’ own bad faith, gross negligence or willful misconduct in the performance of the Trust Administration and
Accounting Agreement.
The Trust Administration and Accounting Agreement will have a three-year initial term and will automatically be renewed for successive one-year periods, unless terminated pursuant to the terms of
the agreement. The Trust may terminate the Trust Administration and Accounting Agreement at any time upon ninety days’ prior written notice in the event that the Sponsor determines to liquidate the Trust. The Administrator may terminate the Trust
Administration and Accounting Agreement at any time upon ninety days’ written notice for any reason and upon thirty (30) days’ written notice in the event of a breach of certain of the Trust’s representations contained in the Trust Administration and
Accounting Agreement.
Transfer Agency and Services Agreement
Pursuant to the Transfer Agency and Services Agreement, the Transfer Agent is generally responsible for the day-to-day administration of the Trust. The responsibilities of the Transfer Agent
include: (i) performing and facilitating the performance of purchases and redemption of Baskets in connection with creation and redemption transactions; (ii) preparing and transmitting by means of DTC’s book entry system payments for dividends and
distributions on or with respect to the Shares, if any, declared by the Trust; (iii) maintaining the record of the name and address of the Shareholder and the number of Shares issued by the
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Trust and held by the Shareholder; and (iv) recording the issuance of Shares of the Trust and maintain a record of the total number of Shares of the Trust which are outstanding and authorized,
based upon data provided to it by the Trust.
The Transfer Agency and Services Agreement will have a three-year initial term and will automatically be renewed for successive one-year periods, unless terminated pursuant to the terms of the
agreement. The Trust may terminate the Transfer Agency and Services Agreement at any time upon ninety days’ written notice in the event that the Trust’s sponsor determines to liquidate the Trust. The Transfer Agent may terminate the Transfer Agency
and Services Agreement at any time upon ninety days’ written notice for any reason.
Solana Custody Agreement
Pursuant to the Solana Custody Agreement, the Solana Custodian is responsible for providing the Trust with segregated cold wallet digital asset custody. The Trust’s assets with the Solana Custodian
are held in segregated wallets and are therefore not commingled with corporate or other customer assets. The Solana Custodian also segregates each of the accounts (comprising multiple wallets in some cases) that a client (such as the Trust) may hold
with the Solana Custodian, and each such account’s balance represents the account’s on-chain balance, which can be independently verified by the client or third-party auditors as needed. This approach applies to each asset supported by the Solana
Custodian.
Private key materials are generated and subsequently stored in a form whereby no private key is stored in a decrypted format. The private key materials are stored within the Solana Custodian’s
secure storage facilities within the U.S. and Europe. For security reasons, these exact locations are never disclosed.
Personnel supporting key operations are very limited and the Solana Custodian requires a background check prior to onboarding, and where required, annually thereafter. No single individual
associated with the Solana Custodian has access to full private keys. Private key use and subsequent transaction signing instead require access to multiple systems and human operators in order to access a key and perform an on-chain transaction. For
security purposes, the Solana Custodian does not disclose specifics around the roles and numbers of individuals involved in these processes.
The Solana Custodian maintains an annually renewed insurance policy with comprehensive coverage terms and conditions. This insurance policy covers the loss of client assets held in cold storage at
the Solana Custodian. This insurance program, which has continuously run since 2013, provides the Solana Custodian and its clients with some of the broadest and deepest insurance coverage in the digital asset industry, with coverage designed to be
comprehensive, including losses from employee collusion or fraud, physical loss (including theft), or damage of key material, security breach or hack, and fraudulent transfer. Furthermore, Coinbase also maintains a Cyber insurance program covering
security failures.
The Solana Custodian maintains an Internal Audit team that performs periodic internal audits over custody operations. SOC attestations are also performed on the Solana Custodian’s services. The SOC
1 Type 2 and SOC 2 Type 2 reports produced cover private key management controls as well as ensure controls are designed and operating effectively, providing reasonable assurance that customer digital asset positions held in custody and prime
brokerage accounts are authorized, executed and accurately and completely recorded. A SOC 1 Type 2 report addresses the controls at a service organization that are likely to be relevant to user entities’ internal control over financial reporting. A
SOC 2 Type 2 report addresses controls at a service organization relevant to security, availability, processing integrity, confidentiality, or privacy in order to support users’ evaluations of their own systems of internal control.
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The Solana Custodian will not be liable for any amount greater than the greater of (i) the aggregate amount of custodial fees paid in a 12-month period from the Trust to the Solana Custodian or
(ii) the value of the supported digital assets on deposit in the Trust’s custodial account(s) at the time of the event giving rise to the liability, subject further to the maximum liability limit of $100 million for each cold storage address.
Additionally, in respect of any incidental, indirect, special, punitive, consequential or similar losses, the Solana Custodian is not liable, even if the Solana Custodian has been advised of or knew or should have known of the possibility thereof.
The Solana Custodian is not liable for delays, suspension of operations, failure in performance, or interruption of service to the extent it is directly due to a cause or condition beyond the reasonable control of the Solana Custodian.
The Solana Custody Agreement became effective on [ ], 2025, and has no fixed termination date. Either party may terminate the Solana Custody Agreement in its entirety for any reason and without
cause by providing at least ninety days’ prior written notice to the other party.
Cash Custody Agreement
The Sponsor has entered into a Cash Custody Agreement with the Cash Custodian (the “Cash Custody Agreement”). Under the Cash Custody Agreement, the Cash Custodian will keep safely all cash and
other non-SOL assets of the Trust delivered to the Cash Custodian and, on behalf of the Trust, the Cash Custodian shall, from time to time, accept delivery of cash and other non-SOL assets for safekeeping.
In performing its duties under the Cash Custody Agreement, the Cash Custodian will exercise the standard of care and diligence that a professional custodian would observe in these affairs taking
into account the prevailing rules, practices, procedures and circumstances in the relevant market and shall perform its duties without negligence, fraud, bad faith or willful misconduct. The Cash Custodian’s liability arising out of or relating to
the Cash Custody Agreement will be limited solely to those direct damages that are caused by the Cash Custodian’s failure to perform its obligations under the Cash Custody Agreement in accordance with this standard of care.
The Cash Custody Agreement has no fixed termination date. Each party may terminate the Cash Custody Agreement by giving to the counterparty a notice in writing specifying the date of such
termination, which will be not less than ninety days after the date of such notice.
Marketing Agent Agreement
Pursuant to the Marketing Agent Agreement, the Marketing Agent is generally responsible for certain aspects of the day-to-day administration of the Trust. The responsibilities of the Marketing
Agent include (i) at the request of the Trust, assisting the Trust with facilitating Authorized Participant Agreements between and among Authorized Participants, the Trust, and the applicable Transfer Agent, for the creation and redemption of
Creation Baskets of the Trust; (ii) maintaining copies of confirmations of Creation Basket creation and redemption order acceptances and producing such copies upon reasonable request from the Trust or Sponsor; (iii) making available copies of the
Prospectus to Authorized Participants who have purchased Baskets in accordance with the Authorized Participant Agreements; (iv) maintaining telephonic, facsimile and/or access to direct computer communications links with the Transfer Agent; (v)
reviewing and approving, prior to use, certain Trust marketing materials submitted by the Trust for review (“Marketing Materials”) for compliance with applicable SEC and FINRA advertising rules, and filing all such Marketing Materials required to be
filed with FINRA; (vi) ensuring that all direct requests by Authorized Participants for Prospectuses are fulfilled; and (vii) working with the Transfer Agent to review and approve orders placed by Authorized Participants and transmitted to the
Transfer Agent.
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The Trust shall indemnify, defend and hold the Marketing Agent, its affiliates and each of their respective members, managers, directors, officers, employees, representatives and any person who
controls or previously controlled the Marketing Agent within the meaning of Section 15 of the Securities Act (collectively, the “Marketing Agent Indemnitees”), free and harmless from and against any and all losses, claims, demands, liabilities,
damages and expenses (including the costs of investigating or defending any alleged losses, claims, demands, liabilities, damages or expenses and any reasonable counsel fees incurred in connection therewith) (collectively, “Losses”) that any
Marketing Agent Indemnitee may incur arising out of or relating to (i) the Trust’s breach of any of its obligations, representations, warranties or covenants contained in the Marketing Agent Agreement; (ii) the Trust’s failure to comply in all
material respects with any applicable laws, rules or regulations; or (iii) any claim that the Prospectus, sales literature and advertising materials or other information filed or made public by the Trust (as from time to time amended) includes or
included an untrue statement of a material fact or omits or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading provided, however, that the Trust’s obligation to indemnify
any of the Marketing Agent Indemnitees shall not be deemed to cover any Losses arising out of any untrue statement or alleged untrue statement or omission or alleged omission made in the Prospectus or any such advertising materials or sales
literature or other information filed or made public by the Trust in reliance upon and in conformity with information provided by the Marketing Agent to the Trust, in writing, for use in such Prospectus or any such advertising materials or sales
literature.
The Marketing Agent Agreement will have a one-year initial term and will automatically be renewed for successive one-year periods, unless terminated on sixty days’ written notice by the Sponsor,
the Trust or the Marketing Agent.
Execution Agent Agreement
The Sponsor and the Execution Agent have entered into an agreement pursuant to which the Execution Agent will provide certain execution services on behalf of the Trust. Pursuant to the Execution
Agent Agreement, and subject to specific instructions from the Sponsor, the Execution Agent in its discretion is responsible for selecting the method of transacting, the price, the Solana Counterparty or Counterparties and the trading platform or
venue (if any) for the execution of each purchase and sale of SOL on behalf of the Trust. The Execution Agent has established policies and procedures for identifying, monitoring and performing due diligence on potential Solana Counterparties and
trading platforms or venues, with entities being added or removed from consideration on an ongoing basis. In addition, the Execution Agent evaluates Solana Counterparties and trading platforms or venues on a per-transaction basis. At the time it
selects a Solana Counterparty for any specific transaction, the Execution Agent may consider a number of factors in an effort to seek to achieve “best execution,” including price, transaction costs, speed, and likelihood of execution and settlement,
taking into account the size of the transaction and the experience and capabilities of the Solana Counterparty or any other consideration relevant to the execution of the relevant transaction, giving priority to transacting at a price that is the
same or similar to the Benchmark Price.
The Execution Agent shall designate, validate and maintain the Trust’s digital asset wallets in accordance with instructions received from the Sponsor. The Execution Agent shall cooperate with the
Trust’s administrator and custodian(s) as necessary and in accordance with agreed upon procedures.
In addition to the duty of care provisions contained in the Agreement, the Execution Agent is expressly prohibited from using any information that it has gained about the Trust’s trading activities
in SOL pursuant to instructions to inform (in whole or in part) any decision to purchase or sell SOL that it makes either for its own account or on behalf of any other person. The Execution Agent shall not aggregate any purchases or sales of SOL it
makes on behalf of the Trust with any purchases or sales of SOL it makes either for its
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own account or on behalf of any other person unless it does so in a manner that is not reasonably expected to operate to the disadvantage of the Trust.
The Execution Agent Agreement’s initial term will continue until [ ], 2025, and will automatically be renewed for successive two-year periods, unless terminated on one hundred eighty days’
written notice by either party.
Master Services Agreement
The Sponsor has entered into a Master Services Agreement with the Benchmark Provider (the “Master Services Agreement”). Under the Master Services Agreement, the Benchmark Provider grants to Fund a
license to access and use the Benchmark in addition to other services of the Benchmark Provider. The Master Services Agreement limits the Benchmark Provider’s liability to exclude, among others, (i) loss of profits and any indirect damages arising
out of the Master Services Agreement and (ii) any breach of the Benchmark Provider’s servers or systems, including any hacking or unauthorized access to customer data. The Master Services Agreement also includes master terms that apply to other
agreements between the Trust and the Benchmark Provider, including the Benchmark Provider Agreement, discussed below.
The term of the Master Services Agreement commenced on [___], 2025 and will continue until the termination of the Sponsor’s last outstanding subscription agreement with the Benchmark Provider for
services and proprietary data products. Each underlying subscription agreement automatically renews after its initial period for successive one-year periods until either party provides the other party with a written notice to terminate that
subscription agreement no less than ninety days prior to the close of the then-current subscription period, unless otherwise specified in such subscription agreement.
Calculation Services Subscription Agreement
The Sponsor has entered into a Calculation Services Subscription Agreement with the Benchmark Provider (the “Benchmark Provider Agreement”). Under the Benchmark Provider Agreement, the Benchmark
Provider agrees to provide and update the Sponsor and other identified parties with the value of SOL as calculated according to the methodology described in the “Description of Lukka Prime” section above, at agreed upon time frames, in exchange for a
fixed annual fee payable by the Sponsor.
The Calculation Services Subscription Agreement has an initial period of one year commencing on its effective date. The Calculation Services Subscription Agreement then automatically renews as
discussed above at “Material Contracts—Master Services Agreement.”
U.S. FEDERAL INCOME TAX CONSEQUENCES
The following is a discussion of certain material U.S. federal income tax consequences that generally will apply to the purchase, ownership and disposition of Shares by Shareholders and U.S.
federal income tax treatment of the Trust, and constitutes, insofar as it describes matters of U.S. federal income tax or legal conclusions relating thereto and subject to the limitations and qualifications described therein, the opinion of [Stradley
Ronon Stevens & Young, LLP]. The discussion below is based on the Code, Treasury Regulations promulgated thereunder and judicial and administrative interpretations of the Code, all as in effect on the date of this Prospectus and all of which are
subject to change either prospectively or retroactively. The tax treatment of Shareholders may vary depending upon their own particular circumstances. Certain Shareholders (including but not limited to banks, financial institutions, insurance
companies, regulated investment companies, real estate investment trusts, tax-exempt organizations, tax-exempt or tax-advantaged retirement plans or accounts, brokers or dealers, traders, partnerships for U.S. federal income tax purposes, persons
holding Shares as a position in a “hedging,” “straddle,” “conversion,”
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“constructive sale” or other integrated transaction for U.S. federal income tax purposes, persons whose “functional currency” is not the U.S. dollar, persons required for U.S. federal income tax
purposes to accelerate the recognition of any item of gross income with respect to the Shares as a result of such income being recognized on an applicable financial statement, or other investors with special circumstances) may be subject to special
rules not discussed below. In addition, the following discussion applies only to investors who will hold Shares as “capital assets” (generally, property held for investment). Moreover, the discussion below does not address the effect of any state,
local or foreign tax law consequences that may apply to an investment in Shares. Purchasers of Shares are urged to consult their own tax advisers with respect to all U.S. federal, state, local and foreign tax law considerations potentially applicable
to their investment in Shares.
For purposes of this discussion, a “U.S. Shareholder” is a Shareholder that is:
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an individual who is treated as a citizen or resident of the U.S. for U.S. federal income tax purposes;
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a corporation (or entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the U.S., any state thereof or the District of Columbia;
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an estate, the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source; or
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a trust, if a court within the U.S. is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust.
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For purposes of this discussion, a “U.S. Tax-Exempt Shareholder” is a U.S. Shareholder that is exempt from tax under Section 501(a) of the Code.
For purposes of this discussion, a “Non-U.S. Shareholder” is a Shareholder that is (or is treated as), for U.S. federal income tax purposes:
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a nonresident alien individual;
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a foreign corporation; or
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an estate or trust whose income is not subject to U.S. federal income tax on a net income basis.
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If a partnership or other entity or arrangement treated as a partnership for U.S. federal income tax purposes holds Shares, the tax treatment of a partner generally depends upon the status of the
partner and the activities of the partnership. If you are a partner of a partnership holding Shares, the discussion below may not be applicable, and the Trust urges you to consult your own tax adviser for the U.S. federal income tax implications of
the purchase, ownership and disposition of such Shares.
Taxation of the Trust
The Sponsor and the Trustee will treat the Trust as a “grantor trust” for U.S. federal income tax purposes. As a result, the Trust itself should not be subject to U.S. federal income tax. Instead,
the Trust’s income and expenses should “flow through” to the Shareholders, and the Trustee intends to report the Trust’s income, gains, losses and deductions to the IRS on that basis. There can be no assurance that the IRS will agree with the
conclusions of counsel’s opinion and it is possible that the IRS or another tax authority could assert a position contrary to one or all of those conclusions and that a court could sustain that contrary position.
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The treatment of staking in a grantor trust for U.S. federal income tax purposes is still developing.
As a grantor trust, the Trust can undertake only certain types of activities. For example, generally, the Trust cannot vary its investment portfolio to take advantage of market fluctuations. The
Trust may receive income from investment activities that do not require such decision-making. If staking is treated for U.S. federal income tax purposes as a passive ministerial and administrative activity, it should be permissible for the Trust. If
the Trust were viewed as undertaking the types of activities that would not be allowable for U.S. federal income tax purposes, then the Trust could lose its income tax status as a grantor trust, and the Trust could be reclassified as a partnership.
If the Trust were reclassified as a partnership, a more complex reporting regime would apply, and Shareholders would receive a Form K-1. If the Trust were reclassified as a partnership but did not satisfy a safe harbor or exception to the publicly
traded partnership rules, it could be reclassified as a corporation, which would subject the Trust to corporate level tax, and the Shareholder’s return on investment would likely be affected.
As discussed below in “Taxation of U.S. Shareholders,” if a hard fork, airdrop, staking or similar event occurs in the Solana blockchain, the Sponsor will instruct the Trust to immediately and
irrevocably disclaim all rights to the IR Assets so created. Although the Sponsor will instruct the Trust to immediately and irrevocably disclaim all rights to the IR Assets so created, it is possible that Shareholders may incur a federal income tax
liability if, for example, the IRS does not recognize such a disclaimer. The occurrence of a hard fork, airdrop, staking or the Trust’s or Sponsor’s actions with respect thereto or with respect to any alternative digital asset the Trust receives may
affect the Trust’s ability to qualify as a “grantor trust” for U.S. federal income tax purposes.
Neither the Sponsor nor the Trustee will request a ruling from the IRS with respect to the classification of the Trust for U.S. federal income tax purposes or with respect to any other matter. If
the IRS were to assert successfully that the Trust is not classified as a “grantor trust,” the Trust would likely be classified as a partnership for U.S. federal income tax purposes, which may affect the timing and other tax consequences to the
Shareholders, and might be classified as a publicly traded partnership that would be taxable as a corporation for U.S. federal income tax purposes, in which case the Trust would be taxed in the same manner as a corporation on its taxable income and
distributions to Shareholders out of the earnings and profits of the Trust would be taxed to Shareholders as ordinary dividend income (which may be eligible for preferential rates, in the case of non-corporate taxpayers, or a dividends received
deduction, in the case of corporate taxpayers). However, due to the uncertain treatment of digital currency for U.S. federal income tax purposes, there can be no assurance in this regard. Except as otherwise indicated, the remainder of this
discussion assumes that the Trust is classified as a grantor trust for U.S. federal income tax purposes.
Taxation of U.S. Shareholders
A Shareholder will be treated, for U.S. federal income tax purposes, as if he or she directly owned a pro rata share of the underlying assets held in the
Trust. A Shareholder will also be treated as if he or she directly received their respective pro rata share of the Trust’s income, if any, (including staking income, as applicable) and as if they directly incurred their respective pro rata share of
the Trust’s expenses. For purposes of this discussion, and unless stated otherwise, it is assumed that all of a Shareholder’s Shares are acquired on the same date and at the same price per Share. A Shareholder that holds multiple lots of Shares, or
that is contemplating acquiring multiple lots of Shares, should consult his or her tax advisers as to the determination of the tax basis and holding period for the underlying SOL related to such Shares.
Current IRS guidance on the treatment of convertible virtual currencies classifies SOL as “property” that is not currency for U.S. federal income tax purposes and clarifies that SOL could be held
as a capital asset, but it does not address several other aspects of the U.S. federal income tax treatment of SOL. Because SOL is a new technological innovation, the U.S. federal income tax treatment of SOL or transactions relating to
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investments in SOL may evolve and change from those discussed below, possibly with retroactive effect. In this regard, the IRS indicated that it has made it a priority to issue additional guidance
related to the taxation of virtual currency transactions, such as transactions involving SOL. While it has started to issue such additional guidance, whether any future guidance will adversely affect the U.S. federal income tax treatment of an
investment in SOL or in transactions relating to investments in SOL is unknown. Moreover, future developments that may arise with respect to digital currencies may increase the uncertainty with respect to the treatment of digital currencies for U.S.
federal income tax purposes. This discussion assumes that any SOL the Trust may hold is properly treated for U.S. federal income tax purposes as property that may be held as a capital asset and is not currency for purposes of the provisions of the
Code relating to foreign currency gain and loss.
The Trust may use SOL to pay the Sponsor Fee, which under current IRS guidance would be treated as a sale of such SOL. Although the Trust generally does not intend to sell SOL for other purposes,
it may do so in connection with cash redemption transactions, or if necessary to pay certain expenses that must be paid in cash. As and when the Trust sells SOL (for example to pay any such expenses) or is treated as selling SOL (for example, by
using SOL to pay the Sponsor Fee), a Shareholder will generally recognize a gain or loss in an amount equal to the difference between (a) the Shareholder’s pro rata share of the amount realized by the Trust upon the sale and (b) the Shareholder’s tax
basis for its pro rata share of the SOL that was sold. A Shareholder’s tax basis for its share of any SOL sold by the Trust should generally be determined by multiplying the Shareholder’s total basis for its share of all of the SOL held in the Trust
immediately prior to the sale, by a fraction the numerator of which is the amount of SOL sold, and the denominator of which is the total amount of the SOL held in the Trust immediately prior to the sale. After any such sale, a Shareholder’s tax basis
for its pro rata share of the SOL remaining in the Trust should be equal to its tax basis for its share of the total amount of the SOL held in the Trust immediately prior to the sale, less the portion of such basis allocable to its share of the SOL
that was sold or treated as sold.
Upon a Shareholder’s sale of some or all of its Shares (other than a redemption), the Shareholder will be treated as having sold the portion or all, respectively, of its pro rata share of the SOL
held in the Trust at the time of the sale that is attributable to the Shares sold. Accordingly, the Shareholder generally will recognize a gain or loss on the sale in an amount equal to the difference between (a) the amount realized pursuant to the
sale of the Shares, and (b) the Shareholder’s tax basis for the portion of its pro rata share of the SOL held in the Trust at the time of sale that is attributable to the Shares sold, as determined in the manner described in the preceding paragraph.
Based on current IRS guidance, such gain or loss (as well as any gain or loss realized by a Shareholder on account of the Trust selling SOL) will generally be long-term or short-term capital gain or loss, depending upon whether the Shareholder has a
holding period of greater than one year in its pro rata share of the SOL that was sold.
Gains or losses from the sale of SOL to fund cash redemptions are expected to be treated as incurred by the Shareholder that is being redeemed, and the amount of such gain or loss will generally
equal the difference between (a) the amount realized pursuant to the sale of the SOL, and (b) the Shareholder’s tax basis for the portion of its pro rata share of the SOL held in the Trust that is sold to fund the redemption, as determined in the
manner described in the paragraph that is two paragraphs above this one. A redemption of some or all of a Shareholder’s Shares in exchange for the cash received from such sale is not expected to be treated as a separate taxable event to the
Shareholder.
An in-kind redemption of some or all of a Shareholder’s Shares in exchange for the underlying SOL represented by the Shares redeemed generally will not be a taxable event to the Shareholder. The
Shareholder’s tax basis for the SOL received in the redemption generally will be the same as the Shareholder’s tax basis for the portion of its pro rata share of the SOL held in the Trust immediately prior to the in-kind redemption that is
attributable to the Shares redeemed. The Shareholder’s holding period with respect to the SOL received generally should include the period during which the Shareholder held the
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Shares redeemed in-kind. A subsequent sale of the SOL received by the Shareholder generally will be a taxable event, unless a nonrecognition provision of the Code or Treasury Regulations applies to
such sale.
After any sale or redemption of less than all of a Shareholder’s Shares, the Shareholder’s tax basis for its pro rata share of the SOL held in the Trust immediately after such sale or redemption
generally will be equal to its tax basis for its share of the total amount of the SOL held in the Trust immediately prior to the sale or redemption, less the portion of such basis that is taken into account in determining the amount of gain or loss
recognized by the Shareholder upon such sale or redemption for cash or, in the case of an in-kind redemption, that is treated as the basis of the SOL received by the Shareholder in the redemption.
If a hard fork, airdrop or similar event occurs in the Solana blockchain, the Sponsor will instruct the Trust to immediately and irrevocably disclaim all rights to the IR Assets, as discussed
above. Although the Sponsor will instruct the Trust to immediately and irrevocably disclaim all rights to the IR Assets so created, it is possible that Shareholders may still incur a federal income tax liability as a result of a hard fork, airdrop or
similar event if, for example, the IRS does not recognize such a disclaimer. Under current guidance, the IRS has held that a hard fork resulting in the receipt of new units of a digital asset is a taxable event giving rise to ordinary income. While
the IRS has not addressed all situations in which airdrops occur, it is clear from the reasoning of the IRS’s current guidance that it generally would treat an airdrop as a taxable event giving rise to ordinary income, and it is anticipated that any
gain or loss from disposition of any assets received in the airdrop would generally be treated as giving rise to capital gain or loss that generally would be short-term capital gain or loss, unless the holding period of those assets were treated as
being greater than one year as of the time they are sold.
If the Trust were to receive staking awards, likely in the form of new SOL tokens, any such staking rewards received by the Trust would be reportable to Shareholders as taxable income under current
IRS guidance. In 2023, the IRS released a revenue ruling that provided guidance on digital asset staking, including guidance to the effect that staking rewards will, under certain circumstances, be treated as giving rise to taxable income (the
“Staking Guidance”). Assuming that the Trust is treated as a grantor trust for U.S. federal income tax purposes, any staking income received will be a taxable event to beneficial owners of Shares. The Trust receiving staking rewards could result in
beneficial owners of Shares incurring tax liability without an associated distribution from the Trust.
3.8% Tax on Net Investment Income
The Code generally imposes an additional 3.8% Medicare contribution tax on the net investment income of certain individuals, trusts, and estates to the extent their income exceeds certain threshold
amounts. Shareholders are advised to consult their tax advisors regarding the possible implications of this additional tax on their investment in the Shares.
Brokerage Fees and Trust Expenses
Any brokerage or other transaction fee incurred by a Shareholder in purchasing Shares will be treated as part of the Shareholder’s tax basis in the underlying assets of the Trust. Similarly, any
brokerage fee incurred by a Shareholder in selling Shares will reduce the amount realized by the Shareholder with respect to the sale.
Shareholders will be required to recognize the full amount of gain or loss upon a sale or deemed sale of SOL by the Trust (as discussed above), even though some or all of the proceeds of such sale
are used by the Trustee to pay Trust expenses. Shareholders may deduct their respective pro rata shares of each expense incurred by the Trust to the same extent as if they directly incurred the expense. Shareholders who are individuals, estates or
trusts, however, may be required to treat some or all of the expenses of the Trust as
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miscellaneous itemized deductions. An individual may not deduct miscellaneous itemized deductions for tax years beginning after December 31, 2017, and before January 1, 2026. For tax years
beginning after December 31, 2025, individuals may deduct certain miscellaneous itemized deductions only to the extent they exceed in the aggregate 2% of the individual’s adjusted gross income. Similar rules apply to certain miscellaneous itemized
deductions of estates and trusts. In addition, such deductions may be subject to phase outs and other limitations under applicable provisions of the Code.
Investment by Certain Retirement Plans
Individual retirement accounts (“IRAs”) and participant-directed accounts under tax-qualified retirement plans are limited in the types of investments they may make under the Code. Potential
purchasers of Shares that are IRAs or participant-directed accounts under a Code section 401(a) plan should consult with their own tax advisors as to the potential tax consequences of a purchase of Shares.
U.S. Information Reporting and Backup Withholding
The Trustee will file certain information returns with the IRS, and provide certain tax-related information to Shareholders, in connection with the Trust. To the extent required by applicable
regulations, each Shareholder will be provided with information regarding its allocable portion of the Trust’s annual income, expenses, gains and losses (if any). A U.S. Shareholder may be subject to U.S. backup withholding tax in certain
circumstances unless it provides its taxpayer identification number and complies with certain certification procedures. Non-U.S. Shareholders may have to comply with certification procedures to establish that they are not a U.S. person, and some
Non-U.S. Shareholders may be required to meet certain information reporting or certification requirements imposed by the Foreign Account Tax Compliance Act, in order to avoid certain information reporting and withholding tax requirements.
The amount of any backup withholding will be allowed as a credit against a Shareholder’s U.S. federal income tax liability and may entitle the Shareholder to a refund, provided that the required
information is furnished to the IRS in a timely manner.
U.S. Federal Income Taxation of U.S. Tax-Exempt Shareholders
The Trust’s investments and activities relating thereto may cause a U.S. Tax-Exempt Shareholder to realize UBTI. In the absence of any guidance on the matter, a U.S. Tax-Exempt Shareholder’s share
of income from a hard fork, airdrop, or similar event with respect to digital currencies may be treated as UBTI. If the Trust were to incur liabilities, and thus, be treated as holding property constituting debt-financed property (generally, assets
purchased with borrowed funds), income attributable to such property generally would constitute UBTI.
Tax-Exempt Shareholders should consult their tax advisors with respect to the U.S. federal income tax consequences of an investment in the Shares.
U.S. Federal Income Taxation of Non-U.S. Shareholders
The Trust generally does not expect to generate taxable income except for gain (if any) upon the sale or transfer of SOL. A Non-U.S. Shareholder generally will not be subject to U.S. federal income
tax with respect to gain recognized upon the sale or other disposition of the Shares, or upon the sale or transfer of SOL by the Trust, unless (i) the Non-U.S. Shareholder is an individual and is present in the U.S. for one hundred and eighty-three
(183) days or more during the taxable year of the sale, transfer or other disposition, and the gain is treated as being from U.S. sources; or (ii) the gain is (or is treated as) effectively connected with the conduct by the Non-U.S. Shareholder of a
trade or business in the United States (“ECI”).
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A Non-U.S. Shareholder’s allocable share of U.S. source dividend, interest, rental and other FDAP income that is not ECI generally will be subject to U.S. federal withholding tax at a rate of 30%
(unless reduced or eliminated by an applicable income tax treaty or statutory exemption). There is currently no guidance as to whether income recognized by the Trust as a result of a fork, airdrop or similar event would constitute U.S. source FDAP.
Non-U.S. Shareholders should consult their tax advisors with respect to the U.S. federal income tax consequences of an investment in the Shares.
Taxation in Jurisdictions Other Than the U.S.
Prospective purchasers of Shares that are based in or acting out of a jurisdiction other than the U.S. are advised to consult their own tax advisers as to the tax consequences under the laws of
such jurisdiction (or any other jurisdiction to which they are subject) of their purchase, holding, sale and redemption of or any other dealing in Shares and, in particular, as to whether any value added tax, other consumption tax or transfer tax is
payable in relation to such purchase, holding, sale, redemption or other dealing.
PROSPECTIVE SHAREHOLDERS ARE URGED TO CONSULT THEIR TAX ADVISERS BEFORE DECIDING WHETHER TO INVEST IN THE SHARES OF THE TRUST.
PURCHASES BY EMPLOYEE BENEFIT PLANS
The Employee Retirement Income Security Act of 1974 (“ERISA”) and/or Section 4975 of the Code impose certain requirements on: (i) employee benefit plans and certain other plans and arrangements,
including individual retirement accounts and annuities, Keogh plans and certain collective investment funds or insurance company general or separate accounts in which such plans or arrangements are invested, that are subject to Title I of ERISA
and/or Section 4975 of the Code (collectively, “Plans”); and (ii) persons who are fiduciaries with respect to the investment of assets treated as “plan assets” within the meaning of U.S. Department of Labor regulation 29 C.F.R. § 2510.3-101, as
modified by Section 3(42) of ERISA (the “Plan Assets Regulation”), of a Plan. Investments by Plans are subject to the fiduciary requirements and the applicability of prohibited transaction restrictions under ERISA and the Code.
“Governmental plans” within the meaning of Section 3(32) of ERISA, certain “church plans” within the meaning of Section 3(33) of ERISA and “non-U.S. plans” described in Section 4(b)(4) of ERISA,
while not subject to the fiduciary responsibility and prohibited transaction provisions of Title I of ERISA or Section 4975 of the Code, may be subject to federal, state, local, non-U.S. or other law or regulation that are substantially similar to
the foregoing provisions of ERISA and the Code. Fiduciaries of any such plans are advised to consult with their counsel prior to an investment in the Shares.
In considering an investment of a portion of Plan assets in the Shares, the Plan fiduciary responsible for making such investment should carefully consider, taking into account the facts and
circumstances of the Plan, the “Risk Factors” discussed above and whether such investment is consistent with its fiduciary responsibilities. The Plan fiduciary should consider, among other issues, whether: (1) the fiduciary has the authority to make
the investment under the appropriate governing plan instrument; (2) the investment could constitute a direct or indirect non-exempt prohibited transaction with a “party in interest” or “disqualified person” within the meaning of ERISA and Section
4975 of the Code respectively; (3) the investment is in accordance with the Plan’s funding objectives; and (4) such investment is appropriate for the Plan under the fiduciary standards under ERISA including investment prudence and diversification,
taking into account the overall investment policy of the Plan, the composition of the Plan’s investment portfolio and the Plan’s need for sufficient liquidity to pay benefits when due.
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By investing, each Plan shall be deemed to acknowledge and agree that: (a) none of the Sponsor, the Trustee, the Solana Custodian or any of their respective employees, representatives, agents or
affiliates (the “Transaction Parties”) has, through this report and related materials, provided any investment advice within the meaning of Section 3(21) of ERISA to the Plan in connection with the decision to purchase, acquire, hold or dispose of
such Shares; (b) no Transaction Party is intended to be treated as fiduciary to the Plan with respect to any decision by the Plan to purchase, acquire, hold or dispose of the Shares; and (c) no Transaction Party is expected to serve in a trusted
advisor role with respect to the Plan’s investment in the Shares.
INFORMATION YOU SHOULD KNOW
This Prospectus contains information you should consider when making an investment decision about the Shares. You should rely only on the information contained in this Prospectus. None of the Trust
or the Sponsor has authorized any person to provide you with different information and, if anyone provides you with different or inconsistent information, you should not rely on it. This Prospectus is not an offer to sell the Shares in any
jurisdiction where the offer or sale of the Shares is not permitted.
The information contained in this Prospectus was obtained from the Trust, the Sponsor, the Solana Custodian, the Execution Agent and other sources the Trust believes to be reliable.
You should disregard anything the Trust or the Sponsor said in an earlier document that is inconsistent with what is included in this Prospectus.
You should not assume that the information in this Prospectus is current as of any date other than the date on the front page of this Prospectus.
Cross references are included in this Prospectus to captions in these materials where you can find further related discussions. The table of contents tells you where to find these captions.
WHERE YOU CAN FIND MORE INFORMATION
The Trust has filed a registration statement on Form S-1 with the SEC under the Securities Act. This Prospectus does not contain all of the information set forth in the registration statement
(including the exhibits to the registration statement), parts of which have been omitted in accordance with the rules and regulations of the SEC. For further information about the Trust or the Shares, please refer to the registration statement, which
is available online at www.sec.gov.
Information about the Trust and the Shares can also be obtained from the Trust’s website, which is www.invesco.com/QSOL. The Trust’s website address is only provided here as a convenience to you
and the information contained on or connected to the website is not part of this Prospectus or the registration statement of which this Prospectus is part. The Trust is subject to the informational requirements of the Exchange Act and will file
certain reports and other information with the SEC under the Exchange Act.
The reports and other information are available online at www.sec.gov.
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INVESCO CAPITAL MANAGEMENT LLC PRIVACY NOTICE
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Rev. March 5, 2020
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FACTS
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WHAT DOES INVESCO DO WITH YOUR PERSONAL INFORMATION?*
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Why?
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Financial companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing. Federal law also requires us to tell you how we
collect, share, and protect your personal information. Please read this notice carefully to understand what we do.
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What?
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The types of personal information we collect and share depend on the product or service you have with us. This information can include:
• Social Security number and income
• Transaction history and investment experience
• Investment experience and assets
When you are no longer our customer, we continue to share information about you according to our policies.
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How?
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All financial companies need to share customers’ personal information to run their everyday business. In the section below, we list the reasons financial companies can share their customers’
personal information; the reasons Invesco chooses to share; and whether you can limit this sharing.
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Reasons we can share your personal information
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Does Invesco share?
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Can you limit this sharing?
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For our everyday business purposes—
such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus
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Yes
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No
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For our marketing purposes—
to offer our products and services to you
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No
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We do not share
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For joint marketing with other financial companies
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No
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We do not share
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For our affiliates’ everyday business purposes—
information about your transactions and experiences
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No
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We do not share
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For our affiliates’ everyday business purposes—
information about your credit worthiness
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No
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We do not share
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For our affiliates to market to you
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No
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We do not share
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For non-affiliates to market to you
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No
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We do not share
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Questions?
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Call 1-800-959-4246 (toll free).
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This privacy notice applies to individuals who obtain or have obtained a financial product or service from the Invesco family of companies. For a complete list of Invesco entities, please see
the section titled “Who is providing this notice” on page 2.
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Page 2
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Who we are
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Who is providing this notice?
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Invesco Advisers, Inc., Invesco Private Capital, Inc., Invesco Senior Secured Management, Inc., WL Ross & Co. LLC, Invesco Distributors, Inc., Invesco Managed Accounts, LLC, and the Invesco
family of mutual funds.
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What we do
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How does Invesco protect my personal information?
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To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and
buildings.
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How does Invesco collect my personal information?
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We collect your personal information, for example, when you
• Open an account or give us your contact information
• Make deposits or withdrawals from your account or give us your income information
• Make a wire transfer
We also collect your personal information from others, such as credit bureaus, affiliates or other companies.
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Why can’t I limit all sharing?
|
|
Federal law gives you the right to limit only
• Sharing for affiliates’ everyday business purposes—information about your creditworthiness
• Affiliates from using your information to market to you
• Sharing for nonaffiliates to market to you
|
|
Definitions
|
||
|
Affiliates
|
|
Companies related by common ownership or control. They can be financial and nonfinancial companies.
Invesco does not share with our affiliates so that they can market to you.
|
|
Nonaffiliates
|
|
Companies not related by common ownership or control. They can be financial and nonfinancial companies.
Invesco does not share with non-affiliates so that they can market to you.
|
|
Joint marketing
|
|
A formal agreement between nonaffiliated financial companies that together market financial products or services to you.
Invesco doesn’t jointly market.
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-143-
Report of Independent Registered Public Accounting Firm
To the Board of Managers of Invesco Capital Management LLC (as Sponsor of Invesco Galaxy Solana ETF) and Shareholder of Invesco Galaxy Solana ETF
Opinion on the Financial Statement
We have audited the accompanying statement of assets and liabilities of Invesco Galaxy Solana ETF (the "Trust") as of October 16, 2025, including the related notes (collectively referred to as the “financial statement”). In our opinion, the
financial statement presents fairly, in all material respects, the financial position of the Trust as of October 16, 2025 in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
This financial statement is the responsibility of the Trust’s management. Our responsibility is to express an opinion on the Trust’s financial statement based on our audit. We are a public accounting firm registered with the Public Company
Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Trust in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission
and the PCAOB.
We conducted our audit of this financial statement in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of
material misstatement, whether due to error or fraud.
Our audit included performing procedures to assess the risks of material misstatement of the financial statement, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a
test basis, evidence regarding the amounts and disclosures in the financial statement. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of
the financial statement. We believe that our audit provides a reasonable basis for our opinion.
/s/ PricewaterhouseCoopers LLP
Chicago, Illinois
October 31, 2025
We have served as the Trust’s auditor since 2025.
144
Invesco Galaxy Solana ETF
Statement of Assets and Liabilities
October 16, 2025
|
Assets
|
|
||||
|
|
Cash held by custodian |
$
|
100,000 | ||
|
|
Total assets |
$
|
100,000 |
||
|
Liabilities
|
|
||||
|
|
Total liabilities |
$
|
— |
||
|
|
|
||||
|
Commitments and Contingencies (Note 6)
|
|
||||
|
Net Assets
|
$
|
100,000 |
|||
|
|
Shares outstanding |
|
4,000 | ||
|
|
Net asset value per share |
$ |
25.00 | ||
See accompanying Notes to Financial Statement which are an integral part of the financial statement.
145
Invesco Galaxy Solana ETF
Notes to Financial Statement
October 16, 2025
Note 1 – Organization
Invesco Galaxy Solana ETF (the “Trust”) is a Delaware
statutory trust, formed on June 12, 2025, pursuant to the Delaware Statutory Trust Act (“DSTA”). The Trust continuously issues common shares representing fractional undivided
beneficial interest in and ownership of the Trust. The Trust operates pursuant to its Declaration of Trust and Trust Agreement, dated as of June 12, 2025 (the “Trust Agreement”). CSC Delaware Trust Company, a Delaware trust company, is the
Delaware trustee of the Trust (the “Trustee”). The Trust is managed and controlled by Invesco Capital Management LLC (the “Sponsor”).
On October 16, 2025, Invesco Ltd., the Seed Capital Investor, subject
to certain conditions, purchased 4,000 Shares in exchange for $100,000, which comprise the initial purchase of the Trust’s Shares. Delivery of the Shares was made on October 16, 2025. Through October 16, 2025, the Trust had no operations
other than those related to its organization and registration and the sale of Shares to the Seed Capital Investor. As of October 16, 2025, the Seed Capital Investor owns one hundred percent of the outstanding Shares. The Trust has an
unlimited number of shares authorized for issuance.
The Trust’s investment objective is to reflect the performance of the
spot price of Solana (“SOL”) as measured using Lukka Prime Solana Reference Rate (the “Benchmark”), as adjusted to reflect the SOL staking rewards earned by the Trust and the Trust’s expenses and other liabilities. The Trust expects to
outperform the Benchmark before taking its expenses and liabilities into account due to its plans to receive SOL staking rewards. In seeking to achieve its investment objective, the Trust will hold SOL and will seek to stake substantially all
of its SOL to earn staking rewards to the extent the Trust, in the Sponsor’s sole discretion, can engage in staking without undue legal or regulatory risk, including jeopardizing its status as a grantor trust for U.S. federal income tax
purposes (the “Staking Condition”). The Trust will value its Shares each day when the Exchange is open for regular trading (a “Business Day”) as of 4:00 p.m. ET. Coinbase Custody Trust Company, LLC (the “Solana Custodian”) will hold all of
the Trust’s SOL on the Trust’s behalf as Solana Custodian.
Note 2 – Summary of Significant Accounting Policies
|
A.
|
Basis of Presentation
|
The financial statements of the Trust have been prepared using
accounting principles generally accepted in the United States of America (“U.S. GAAP”). The Trust is considered an investment company under U.S. GAAP for financial statement purposes and follows the
146
accounting and reporting guidance applicable to investment companies in the Financial
Accounting Standards Board Accounting Standards Codification Topic 946, Financial Services— Investment Companies, but is not registered, and is not required to be registered, under the Investment Company Act of 1940, as amended.
|
B.
|
Accounting Estimates
|
The preparation of financial statements in conformity with U.S. GAAP
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statement. Actual results could differ from those estimates. In addition, the Trust monitors for
material events or transactions that may occur or become known after the period-end date and before the date the financial statements are issued.
|
C.
|
Segment Reporting
|
The Trust represents a single operating segment. Subject to the
oversight and, when applicable, approval of the Board of Managers, the Trust's Sponsor acts as the Trust's chief operating decision maker (“CODM”), assessing performance and making decisions about resource allocation within the Trust. The
CODM monitors the operating results of the Trust as a whole in view of the Trust’s operations in accordance with the terms of its prospectus based on a single, defined investment strategy. The financial information provided to and reviewed by
the CODM is consistent with that presented in the Trust's financial statements.
|
D.
|
Cash and Cash Equivalents
|
The Trust defines cash as cash held by the Cash Custodian (as defined
below). There were no cash equivalents held by the Trust as of October 16, 2025.
|
E.
|
Trust Expenses
|
The Sponsor is responsible for all
routine operational, administrative and other ordinary expenses of the Trust, including, but not limited to, the Trustee’s fees, the fees of the Bank of New York Mellon (the
“Administrator,” “Transfer Agent,” and “Cash Custodian”), the fees of the Solana Custodian, the fees of Galaxy Digital Funds LLC (the “Execution Agent”), fees associated with listing Shares on Cboe BZX (the “Exchange”), Securities and
Exchange Commission registration fees, printing and mailing costs, legal costs and audit fees.
The Trust will pay the Sponsor a unified fee of
0.25% per annum (the “Sponsor Fee”) as compensation for services performed under the Trust Agreement. The Trust’s only ordinary recurring expense is the Sponsor Fee.
147
The Sponsor Fee will be accrued daily and paid monthly in arrears in
U.S dollars on the first Business Day of the month and will be calculated by the Administrator. The Sponsor paid the costs of the Trust’s organization.
In certain cases, the Trust will pay for some expenses
in addition to the Sponsor’s fee. These exceptions include expenses not assumed by the Sponsor (i.e., expenses other than those identified in the first paragraph of Section E of this Note 2), litigation and indemnification expenses, judgments, transactional expenses, taxes and other expenses not expected to be incurred in the ordinary course of the Trust’s business.
|
F.
|
Federal Income Taxes
|
The Sponsor intends to take the position that the Trust is properly
treated as a grantor trust for U.S. federal income tax purposes. Assuming that the Trust is a grantor trust, the Trust will not be subject to U.S. federal income tax and, therefore, no provision for federal income taxes is required. Rather,
if the Trust is a grantor trust, each beneficial owner of Shares will be treated as directly owning its pro rata share of the Trust’s assets and a pro rata portion of the Trust’s income, gain, losses and deductions will “flow through” to each
beneficial owner of Shares.
Note 3 – Concentration Risk
Unlike other trusts that may invest in diversified assets, the Trust’s investment
strategy is concentrated in a single asset: SOL. This concentration maximizes the degree of the Trust’s exposure to a variety of market risks associated with SOL, including the rise or fall in its price, sometimes rapidly or unexpectedly. By
concentrating its investment strategy solely in SOL, any losses suffered as a result of a decrease in the value of SOL can be expected to reduce the value of an interest in the Trust and will not be offset by other gains if the Trust were to
invest in underlying assets that were diversified. There is no assurance that SOL will maintain its long-term value in terms of purchasing power in the future. In the event that the price of SOL declines, the Sponsor expects the value of an
investment in the Shares to decline proportionately. Each of these events could have a material effect on the Trust’s financial position and the results of its operations.
Note 4 – Service Providers and Related Party Agreements
The Trustee
CSC Delaware Trust Company, a Delaware trust company, acts as the Trustee of the Trust
as required to create a Delaware statutory trust in accordance with the Trust Agreement and the DSTA. Under the Trust Agreement, the duties of the Trustee are limited to (i) accepting legal process served on the Trust in the State of Delaware
and (ii) at the direction of the Sponsor, the
148
execution of any certificates required to be filed with the Secretary of State of the State of Delaware
which the Trustee is required to execute under the DSTA.
The Sponsor
Invesco Capital Management LLC is the Sponsor of the Trust. The Sponsor arranged for the
creation of the Trust and is responsible for the ongoing registration of the Shares for their public offering, the listing of Shares on the Exchange and valuing the SOL held by the Trust. The Sponsor is a limited liability company formed in
the state of Delaware on February 7, 2003, and is a wholly-owned subsidiary of Invesco Ltd. Invesco Ltd. and its subsidiaries, including the Sponsor, are an independent global investment management group.
To cover the Sponsor Fee discussed in Section E of Note 2 above and any extraordinary
expenses not assumed by the Sponsor, the Sponsor or its delegate will cause the Trust (or its delegate) to instruct the Execution Agent to convert SOL held by the Trust into U.S. dollars. The Trust is not responsible for paying any costs
associated with the transfer of SOL to or from the Trust in connection with paying the Sponsor Fee or in connection with creation and redemption transactions.
The Administrator
The Bank of New York Mellon (“BNYM “) serves as the Trust’s Administrator. Under the
trust administration and accounting agreement, the Administrator provides necessary administrative, tax and accounting services and financial reporting for the maintenance and operations of the Trust, including calculating the NAV of the
Trust, determining the net assets of the Trust, and calculating the size of the creation baskets.
The Transfer Agent
BNYM also serves as the Transfer Agent for the Trust. The Transfer Agent is responsible
for (1) issuing and redeeming Shares in connection with creation and redemption transactions, (2) responding to correspondence by Shareholders and others relating to its duties, (3) maintaining Shareholder accounts and (4) making periodic
reports to the Trust.
The Solana Custodian
Coinbase Custody Trust Company, LLC serves as the Trust’s Solana Custodian. Under the
Solana Custody Agreement, the Solana Custodian is responsible for (1) safekeeping all of the SOL owned by the Trust, (2) opening an account that holds the Trust’s SOL and (3) facilitating the transfer of SOL required for the operation of the
Trust, as directed by the Sponsor. The Solana Custodian is chartered as a limited purpose trust company by the New York State Department of Financial Services (“NYSDFS”) and is authorized by the NYSDFS to provide digital asset custody
services. The Solana Custodian is a wholly-owned subsidiary of Coinbase Global, Inc.
149
The Cash Custodian
BNYM serves as the Trust’s Cash Custodian. Under the Cash Custody Agreement, the Cash
Custodian is responsible for holding the Trust’s cash in connection with creation and redemption transactions effected in cash. The Cash Custodian is a New York state-chartered bank and a member of the Federal Reserve System.
The Marketing Agent
Invesco Distributors, Inc. (the “Marketing Agent”) is responsible for: (1) working with
the Transfer Agent to review and approve, or reject, purchase and redemption orders of Shares placed by Authorized Participants with the Transfer Agent; and (2) reviewing and approving the marketing materials prepared by the Trust for
compliance with applicable SEC and Financial Industry Regulatory Authority advertising laws, rules, and regulations.
The Execution Agent
The Sponsor has entered into an agreement with Galaxy Digital Funds LLC, a subsidiary of
Galaxy Digital LP (“Galaxy”), to serve as Execution Agent. The Trust from time to time will be required to sell SOL in such quantities as necessary to permit payment of the Sponsor Fee and any Trust expenses and liabilities not assumed by the
Sponsor. The Sponsor has engaged the Execution Agent to sell SOL on the Trust’s behalf in such circumstances. The Sponsor or its delegate will cause the Trust (or its delegate) to instruct the Execution Agent to sell SOL at approximately the
price at which it is valued by the Trust and in the smallest amounts required to permit such payments as they become due, with the intention of minimizing the Trust’s holdings of assets other than SOL. Accordingly, the amount of SOL to be
sold may vary from time to time depending on the level of the Trust’s expenses and liabilities and the market price of SOL. The Trust also may utilize the services of the Execution Agent to purchase or sell SOL in connection with cash
creations and redemptions. In addition, as part of this agreement, the Execution Agent has agreed to co-brand and co-market the Trust, and the Sponsor has licensed the use of certain Galaxy trademarks, service marks and trade names in
connection with the Trust.
Galaxy is a subsidiary of Galaxy Digital Holdings LP (“Galaxy Holdings”). Galaxy Digital
Holdings Ltd., which holds a limited partner interest in Galaxy Holdings, is listed on the Toronto Stock Exchange under the symbol “GLXY.”
Note 5 – Organization and Offering Costs
The Sponsor has agreed to pay the organizational and initial offering costs of the Trust
and the Trust will not be obligated to reimburse the Sponsor. The organizational and initial offering costs include preparation and filing of incorporation documents, bylaws, declarations of trust, registration statements, state and federal
registration of shares and audit fees. As a result, the Trust’s financial statements will not reflect these organizational and initial offering costs.
150
Note 6 – Commitments and Contingencies
The Trust’s organizational documents provide for the Trust to indemnify the Sponsor and
any affiliate of the Sponsor that provides services to the Trust to the maximum extent permitted by applicable law, subject to certain exceptions for disqualifying conduct by the Sponsor or such an affiliate. The Trust’s maximum exposure
under these arrangements is unknown as this would involve future claims that may be made against the Trust that have not yet occurred.
Note 7 – Subsequent Events
The Trust has evaluated the impact of all subsequent events through October 31, 2025,
the date the financial statement was available for issuance and has determined that there were no subsequent events requiring adjustment or additional disclosure in the financial statement.
151
APPENDIX A
GLOSSARY OF DEFINED TERMS
GLOSSARY OF DEFINED TERMS
In this Prospectus, each of the following terms have the meanings set forth after such term:
“1940 Act”: Investment Company Act of 1940, as amended.
“Administrator”: The Bank of New York Mellon.
“Administrator Indemnitee”: The Administrator and any affiliate of the Administrator.
“Airdrop”: An event wherein the promoters of a new digital asset announce to holders of another digital asset that they will be entitled to claim a certain amount of the new digital asset for free
simply by virtue of having held the original digital asset at a certain point in time.
“ASC Topic 820”: The Financial Accounting Standards Board Accounting Standards Codification Topic 820, “Fair Value Measurements and Disclosures”.
“Alternative Benchmark”: An index or standard other than the Benchmark.
“AUL”: Authorized User List.
“Authorized Participant”: A financial firm that is authorized to purchase or redeem Creation Baskets from or to the Trust.
“Authorized Participant Agreement”: The authorized participant agreement by and among the Trust, the Sponsor and the Authorized Participant(s).
“Benchmark”: Lukka Prime Solana Reference Rate.
“Benchmark Pricing Source”: A SOL pricing source included in the Benchmark.
“Benchmark Provider”: Lukka, Inc.
“Benchmark Provider Agreement”: Calculation Services Subscription Agreement between the Sponsor and the Benchmark Provider.
“BES”: Base Exchange Score.
“BGP”: Border gateway protocol.
“BNYM”: The Bank of New York Mellon.
“BSA”: U.S. Bank Secrecy Act, as amended.
“Business Day”: Any day other than a day when the Exchange is closed for regular trading.
“Cash Custodian”: The Bank of New York Mellon.
“Cash Custody Agreement”: Custody agreement by and between the Cash Custodian and the Trust.
A-1
“CBDCs”: Central bank digital currencies.
“Cboe”: Cboe BZX.
“CEA”: Commodity Exchange Act of 1936, as amended.
“CFIX”: Bloomberg Crypto Price Fixings.
“CFPB”: Consumer Financial Protection Bureau, an independent agency with the mandate to implement and enforce federal consumer financial law.
“CFTC”: Commodity Futures Trading Commission, an independent agency with the mandate to regulate commodity futures and options in the U.S.
“Code”: Internal Revenue Code of 1986, as amended.
“Coinbase”: Coinbase, Inc.
“Coinbase Global”: Coinbase Global, Inc.
“Connected Trading Venue”: Third-party trading platform or other trading platform where the Prime Broker routes orders to buy and sell SOL on behalf of the Trust if the Execution Agent opts to
utilize the Prime Broker to execute such orders.
“Creation Basket”: A block of 5,000 Shares used by the Trust to issue or redeem Shares.
“Creation Basket Deposit”: The total deposit required to create each Creation Basket.
“CTA”: Consolidated Tape Association
“CurrencyShares Trusts”: Exchange-traded funds for which ISP serves as sponsor.
“DAO”: Decentralized autonomous organization.
“DApp”: Decentralized applications.
“DCM”: Designated contract market.
“DeFi”: Decentralized financial services.
“DSTA”: Delaware Statutory Trust Act.
“DTC”: Depository Trust Company. DTC will act as the securities depository for the Shares.
“DTC Participant”: An entity that has an account with DTC.
“ECI”: Effectively Connected Income.
“ERISA”: The Employee Retirement Income Security Act of 1974.
“ETHW”: EthereumPoW network.
A-2
“ETP”: Exchange-traded product.
“Examinations”: The U.S. Securities and Exchange Commission’s Division of Examinations.
“Exchange”: Cboe BZX.
“Exchange Act”: The Securities Exchange Act of 1934, as amended.
“Execution Agent”: Galaxy Digital Funds LLC
“Expenses”: losses, damages, liabilities, claims, actions, suits, costs, expenses, disbursements (including the reasonable fees and expenses of counsel), taxes and penalties of any kind and nature
whatsoever.
“FASB”: Financial Accounting Standards Board.
“FDAP”: Fixed or determinable annual or periodical gains, profits and income.
“FDIC”: Federal Deposit Insurance Corporation.
“FinCEN”: The Financial Crimes Enforcement Network.
“FINRA”: Financial Industry Regulatory Authority, formerly the National Association of Securities Dealers.
“FMV”: Fair market value.
“FTX”: FTX Trading Ltd.
“Galaxy”: Galaxy Digital LP.
“Galaxy Holdings”: Galaxy Digital Holdings LP.
“Genesis”: Genesis Global Capital, LLC.
“ICO”: Initial coin offering.
“IFRS”: International Financial Reporting Standards Foundation
“IIV”: Intraday indicative value.
“Incidental Rights”: Rights to acquire, or otherwise establish dominion and control over, any virtual currency or other asset or right, which rights are incident to the Trust’s ownership of SOL and
arise without any action of the Trust or of the Sponsor on behalf of the Trust.
“Indemnified Person”: The Trustee as well as any officers, directors, employees and agents of the Trustee.
“Indirect Participants”: Banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a DTC Participant, either directly or indirectly.
“Initial Seed Shares”: 4,000 shares of the Trust sold to Invesco Ltd. in connection with the Trust’s launch.
“Invesco”: Invesco Capital Management LLC.
A-3
“Invesco ETFs”: Invesco Exchange Traded Fund Trust, Invesco Exchange-Traded Fund Trust II, Invesco India Exchange-Traded Fund Trust, Invesco Actively Managed Exchange-Traded Fund Trust, Invesco
Actively Managed Exchange-Traded Commodity Fund Trust, and Invesco Exchange-Traded Self-Indexed Fund Trusts.
“Invesco Funds”: Mutual funds advised by Invesco Advisers, Inc., a registered investment adviser.
“IR Assets”: Virtual currency tokens, or other asset or right, acquired by the Trust through the exercise (subject to the applicable provisions of the Trust Agreement) of any Incidental Right.
“IRAs”: Individual retirement accounts.
“IRS”: U.S. Internal Revenue Service.
“ISP”: Invesco Specialized Products, LLC.
“JOBS Act”: Jumpstart Our Business Startups Act.
“KYT”: Know-Your-Transaction.
“Losses”: Losses, claims, demands, liabilities, damages and expenses (including the costs of investigating or defending any alleged losses, claims, demands, liabilities, damages or expenses and any
reasonable counsel fees incurred in connection therewith).
“Marketing Agent”: Invesco Distributors, Inc.
“Marketing Agent Indemnitees”: The Marketing Agent, its affiliates and each of their respective members, managers, directors, officers, employees, representatives and any person who controls or
previously controlled the Marketing Agent within the meaning of Section 15 of the Securities Act.
“Marketing Materials”: Certain Trust marketing materials submitted by the Trust for review.
“Master Services Agreement”: Master Services Agreement between the Sponsor and the Benchmark Provider.
“Merge”: The 2022 fork that transitioned the Ethereum network from a proof-of-work consensus mechanism to a proof-of-stake consensus mechanism.
“NAV”: Net asset value per share of the Trust.
“NFA”: National Futures Association.
“NFT”: Non-fungible token.
“NYSDFS”: The New York State Department of Financial Services.
“OFAC”: The Office of Foreign Assets Control of the United States Department of the Treasury.
“OTC”: Over-the-counter markets.
“PCAOB”: Public Company Accounting Oversight Board.
A-4
“PIOB”: Benchmark Provider’s Price Integrity Oversight Board.
“Plans”: Employee benefit plans and certain other plans and arrangements, including individual retirement accounts and annuities, Keogh plans and certain collective investment funds or insurance
company general or separate accounts in which such plans or arrangements are invested, that are subject to Title I of ERISA and/or Section 4975 of the Code.
“PoS”: Proof-of-Stake.
“PoW”: Proof-of-Work.
“Prime Broker”: Coinbase, Inc.
“Prime Custody Vault”: “Cold storage” environment where the private keys associated with the Trust’s SOL are generated and secured.
“Redemption Order Date”: The date a redemption order is received in satisfactory form and approved by the Transfer Agent.
“Relevant Coinbase Entities”: Coinbase and Coinbase Global Inc.
“SEC”: The U.S. Securities and Exchange Commission.
“Securities Act”: Securities Act of 1933, as amended.
“Seed Capital Investor”: [__].
“Seed Creation Baskets:” [_] Creation Baskets anticipated to be purchased by the Seed Capital Investor.
“Selling Shareholder”: The Seed Capital Investor or Invesco Ltd. when they sell some or all of the Shares held by them pursuant to the registration statement for the Trust.
“Shareholders”: Holders of Shares.
“Shares”: Common shares representing fractional undivided beneficial interests in the Trust.
“SIPC”: Securities Investor Protection Corporation.
“SOC”: Systems and Organizational Control.
“SOL”: The digital asset within the Solana network.
“Solana Custody Agreement”: Prime brokerage and custody agreement between the Trust and Coinbase Custody Trust Company, LLC.
“Solana”: The system as a whole that is involved in maintaining the ledger of SOL ownership and facilitating the transfer of SOL among parties.
“Solana Access Persons”: Execution Agent personnel who have access to information about creation and redemption activity in Shares of the Trust.
A-5
“Solana Counterparty”: Digital asset trading platforms or counterparties with whom the Execution Agent transacts in acquiring or disposing of SOL on behalf of the Trust.
“Solana Custodian”: Coinbase Custody Trust Company, LLC.
“Solana Client”: A software application that implements the Solana network specification and communicates with the Solana network.
“Sponsor”: Invesco Capital Management LLC.
“Sponsor Fee”: The unified fee of 0.25% per annum paid by the Trust to the Sponsor.
“Sponsor Indemnified Person”: The Sponsor, in its capacity as Sponsor, and any of the officers, directors, employees, affiliates and agents of the Sponsor.
“Trading Balance”: Trading account that may be used to maintain the Trust’s SOL when it is being processed in connection with certain creation or redemption transactions or it is being sold.
“Transaction Parties”: The Sponsor, the Trustee, the Solana Custodian or any of their respective affiliates.
“Transfer Agent”: The Bank of New York Mellon.
“Trust”: Invesco Galaxy Solana ETF.
“Trust Agreement”: Amended and Restated Declaration of Trust and Trust Agreement dated as of [ ], 2025.
“Trustee”: CSC Delaware Trust Company, a Delaware trust company.
“U.S.”: United States of America.
“U.S. GAAP”: U.S. generally accepted accounting principles.
“U.S. Treasury Department”: United States Department of the Treasury.
“UBTI”: Unrelated Business Taxable Income.
“USDC”: U.S. Dollar Coin.
“WHO”: World Health Organization.
“You”: The current and prospective owner or holder of Shares.
A-6
INVESCO GALAXY SOLANA ETF
COMMON SHARES
PROSPECTUS
October [ ], 2025
Until [ ], 2025 (25 calendar days after the date of the initial Prospectus) all dealers that effect transactions in these securities, whether or not participating in this
offering, may be required to deliver a Prospectus. This is in addition to the dealers’ obligation to deliver a Prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution.*
The Trust shall not bear any expenses incurred in connection with the issuance and distribution of the securities being registered. These expenses shall be paid by Invesco Capital Management LLC,
the sponsor of the Trust. Except for the Securities and Exchange Commission Registration Fee and Exchange Listing Fee, all such expenses are estimated:
|
Securities and Exchange Commission Registration Fee
|
**
|
|
Exchange Listing Fee
|
$[ ]
|
|
Printing and engraving expenses
|
$[ ]
|
|
Legal fees and expenses
|
$[ ]
|
|
Accounting fees and expenses
|
$[ ]
|
|
Total
|
$[ ]
|
* Subject to revision upon completion of the offering.
** An indeterminate number of the securities is being registered as may from time to time be sold at indeterminate prices. In accordance with Rules 456(d) and 457(u), the Trust is deferring payment of all of the
registration fee and will pay the registration fee subsequently on an annual basis.
Item 14. Indemnification of Directors and Officers.
Under the Trust Agreement, the Trust has agreed to be primary obligor and to indemnify, defend and hold harmless the Trustee, in its individual capacity and in its capacity as Trustee and any of
the officers, directors, employees, affiliates and agents of the Trustee (the “Indemnified Persons”) from and against any and all losses, damages, liabilities, claims, actions, suits, costs, expenses, disbursements (including reasonable legal fees
and expenses in connection with enforcement of its rights to indemnity hereunder and including the reasonable fees and expenses of counsel), taxes and penalties of any kind and nature whatsoever (collectively, “Expenses”), to the extent that such
Expenses arise out of or are imposed upon or asserted at any time against such Indemnified Persons with respect to the performance of the Trust Agreement, the creation, operation or termination of the Trust or the transactions contemplated hereby;
provided, however, that the Trust shall not be required to indemnify any Indemnified Person for any Expenses which are a result of the willful misconduct, bad faith or gross negligence of an Indemnified Person. As security for any amounts owing to
the Trustee under the indemnification provisions of the Trust Agreement described above, the Trustee shall have a lien against the Trust’s property, which lien shall be prior to the rights of the Sponsor or any other Shareholder of the Trust. The
obligations of the Sponsor and the Trust to indemnify the Indemnified Persons will survive the termination of the Trust Agreement.
The Trust Agreement provides that the Trust shall indemnify, defend and hold harmless the Sponsor, in its capacity as Sponsor, the Sponsor Indemnified Persons from and against any and all Expenses,
to the extent that such Expenses arise out of or are imposed upon or asserted at any time against such Sponsor Indemnified Persons with respect to the performance of the Trust Agreement, the creation, operation or termination of the Trust or the
transactions contemplated by the Trust Agreement; provided, however, that the Trust shall not be required to indemnify any Sponsor Indemnified Person for any Expenses which are a result of the willful misconduct, bad faith or gross negligence of a
Sponsor Indemnified Person. To the fullest extent permitted by law, Expenses to be incurred by a Sponsor Indemnified Person shall, from time to time, be advanced by, or on behalf of, the Trust prior to the final disposition of any matter upon receipt
by the Trust of an undertaking by, or on behalf of, such Sponsor Indemnified Person to repay such amount if it shall be determined that the Sponsor Indemnified Person is not entitled to be indemnified under the
II-1
Trust Agreement. The obligations of the Trust to indemnify the Sponsor Indemnified Parties will survive the termination of the Trust Agreement.
Item 15. Recent Sales of Unregistered Securities.
In connection with the Trust’s launch, the Trust was seeded with $100,000 on October 16, 2025 through the sale of 4,000 Shares (“Initial Seed Shares”) at a per-Share price of $25.00 by the Trust
to Invesco Ltd. This transaction was effected pursuant to Section 4(a)(2) of the Securities Act.
Item 16. Exhibits and Financial Statement Schedules.
| (a) |
Exhibit.
|
The exhibits to this registration statement are listed in the Exhibit Index to this registration statement, which is incorporated herein by reference.
| (b) |
Financial Statement Schedules.
|
Not applicable.
Item 17. Undertakings.
| (a) |
The undersigned registrant hereby undertakes:
|
| (1) |
To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
|
| (i) |
to include any prospectus required by section 10(a)(3) of the Securities Act;
|
| (ii) |
to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more
than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and
|
| (iii) |
to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;
|
Provided, however, That:
II-2
Paragraphs (1)(i), (ii), and (iii) of this section do not apply if the registration statement is on Form S-1 or Form S-3 and the information required to
be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or
78o(d)) that are incorporated by reference in the registration statement, or, as to a registration statement on Form S-3, is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement; and
| (2) |
That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering thereof.
|
| (3) |
To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
|
| (4) |
That, for the purpose of determining liability under the Securities Act to any purchaser:
|
| (i) |
If the registrant is relying on Rule 430B:
|
| (A) |
each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and
|
| (B) |
each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of
providing the information required by section 10(a) of the Securities Act shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the
date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a
new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering
thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or
prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or
|
II-3
prospectus that was part of the registration statement or made in any such document immediately prior to such effective date; or
| (ii) |
If the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed
in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that
is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of
contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of
first use.
|
| (5) |
That, for the purpose of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of the securities:
|
The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the
underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be
considered to offer or sell such securities to such purchaser:
| (i) |
any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
|
| (ii) |
any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
|
| (iii) |
the portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and
|
| (iv) |
any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
|
| (6) |
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection
with the securities being
|
II-4
registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
II-5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in
the City of Downers Grove, and the State of Illinois, on October 31, 2025.
|
Invesco Galaxy Solana ETF
Invesco Capital Management LLC, as Sponsor of the Trust
|
||
|
By:
|
/s/ Brian Hartigan
|
|
|
Name: Brian Hartigan
Title: Chief Executive Officer and Manager
|
||
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities* and on the dates indicated.
|
Signature
|
Title
|
Date
|
|
/s/ Brian Hartigan
Name: Brian Hartigan
|
Chief Executive Officer, Manager
(principal executive officer)
|
October 31, 2025
|
|
/s/ Kelli Gallegos
Name: Kelli Gallegos
|
Principal Financial and Accounting Officer,
Investment Pools (principal financial officer and
principal accounting officer) |
October 31, 2025
|
|
/s/ Jordan Krugman
Name: Jordan Krugman
|
Manager
|
October 31, 2025
|
|
/s/ Melanie Ringold
Name: Melanie Ringold
|
Manager
|
October 31, 2025
|
| * |
The registrant is a trust and the persons are signing in their capacities as officers of Invesco Capital Management LLC, the Sponsor of the registrant.
|
EXHIBIT INDEX
|
Exhibit No.
|
Exhibit Description
|
|
3.1
|
Declaration of Trust and Trust Agreement**
|
|
3.2
|
Amended and Restated Declaration of Trust and Trust Agreement**
|
|
3.3
|
|
|
5.1
|
Opinion of [__] as to legality**
|
|
8.1
|
Opinion of [__] as to tax matters**
|
|
10.1
|
Form of Sponsor Agreement**
|
|
10.2
|
|
|
10.3
|
Form of Marketing Agent Agreement**
|
|
10.4
|
|
|
10.5
|
|
|
10.6
|
|
|
10.7
|
|
|
10.8
|
|
|
10.9
|
|
|
10.10
|
|
|
23.1
|
|
|
23.2
|
Consent of [__] (included in Exhibit 5.1)**
|
|
23.3
|
Consent of [__] (included in Exhibit 8.1)**
|
|
107
|
|
*
|
Filed herewith.
|
|
**
|
To be filed by amendment.
|
|
1.
|
Previously filed as an exhibit to the Registration Statement on Form S-1 filed June 25, 2025, and incorporated herein by reference.
|
Exhibit 10.2
PARTICIPATION AGREEMENT
Invesco Galaxy Solana ETF
This Participant Agreement (this “Agreement”) is entered into between Invesco Capital Management LLC (the “Sponsor”),
[__________] (the “Participant”), and is subject to acceptance by Invesco Galaxy Solana ETF (the “Trust”) and The Bank of New York Mellon (the “Transfer Agent”). The Transfer Agent serves as the transfer agent of the Trust. The Sponsor and the Participant acknowledge and agree that the Trust shall be a third-party beneficiary of the Agreement and shall receive the benefits
contemplated by the Agreement to the extent specified herein.
As provided in the Declaration of Trust and Trust Agreement of the Trust, as amended from time to time (the “Trust Agreement”) as currently in
effect and described in the Trust’s Prospectus (the “Prospectus”) included as part of the Registration Statement, as amended, on Form S-1 (the “Registration Statement”)
as currently effective and on file with the Securities and Exchange Commissions (the “SEC”) and as the same may be amended from time to time thereafter or any successor registration statement (on Form S-1 or
otherwise), units of fractional undivided beneficial interest in and ownership of the Trust (“Shares”) may be created or redeemed only in aggregations of shares, as identified in the Prospectus (a “Creation Unit”). Capitalized terms not otherwise defined herein are used herein as defined in the Prospectus. This Agreement is intended to set forth certain premises and the procedures by which the Participant
may create and/or redeem Creation Units.
The parties hereto in consideration of the premises and of the agreements contained herein agree as follows:
|
1.
|
STATUS OF PARTICIPANT. The Participant hereby represents, covenants and warrants that with respect to orders for the creation or
redemption of Creation Units by means of the Fed Book Entry System or DTC, it is eligible to utilize the Fed Book Entry System and/or DTC and it is a DTC Participant (as defined in the Trust’s Prospectus, a “DTC
Participant”). The Participant may place orders for the creation or redemption of Creation Units through the Fed Book-Entry System and/or DTC, subject to the procedures for creation and redemption referred to in Sections 2 and 3
of this Agreement and the procedures described in Attachment A hereto. Any change in the foregoing status of the Participant shall terminate this Agreement, and the Participant shall give prompt notice to the Sponsor and the Transfer Agent
of such change.
|
The Participant further represents that it is a broker-dealer registered with the SEC and a member of the Financial Industry Regulatory Authority (“FINRA”) or is exempt from or otherwise not required to be licensed as a broker-dealer or a member of FINRA. The Participant is qualified, registered and/or licensed to act as a broker or dealer, or is otherwise
exempt, as required according to all applicable laws of the state(s) in which the Participant conducts its activities as defined hereunder. The Participant shall comply with all applicable U.S. federal laws and all applicable rules of the SEC and
the laws of the states or other jurisdictions concerned, and the rules and regulations promulgated thereunder to the extent such laws, rules and regulations relate to the Participant’s transactions in, and activities with respect to, the Shares. The
Participant is a qualified institutional buyer as defined in Rule 144A under the U.S. Securities Act of 1933, as amended (the “1933 Act”). The Participant agrees to
1
conform to the rules of FINRA (if it is a member of FINRA), and shall not offer or sell Shares in any state or jurisdiction where they may not lawfully be offered
and/or sold.
The Participant understands and acknowledges that the proposed method by which Creation Units will be created and traded may raise certain issues under applicable
securities laws. The Participant understands and acknowledges that, for example, because new Shares can be created and issued on an ongoing basis, at any point during the life of a Trust, a “distribution,” as such term is used in the 1933 Act, may
be occurring. The Participant is cautioned that some of its activities may result in its being deemed a participant in a distribution in a manner that would render it a statutory underwriter and subject it to the prospectus delivery and liability
provisions of the 1933 Act. The Participant should review the “Plan of Distribution” section of the Prospectus and consult with its own counsel in connection with entering into this Agreement and submitting an order for the creation of Creation
Unit(s).
If the Participant is offering or selling Shares in jurisdictions outside the several states, territories and possessions of the United States and is not otherwise
required to be registered, qualified or a member of FINRA as set forth in the second paragraph of this Section 1, the Participant shall, with respect to the Participant’s transactions in, and activities regarding, the Shares (i) observe the
applicable laws of the jurisdiction in which such offer and/or sale is made, (ii) comply with the full disclosure requirements of the 1933 Act, and the regulations promulgated thereunder, and (iii) conduct its business in accordance with the spirit
of the FINRA Conduct Rules.
The Participant has entered into an Agreement with at least one of the custodians of the Trust (each, a “Custodian” and
collectively, the “Custodians”) to establish an account (the “Participant Solana Account”) for depositing and holding Solana. The Participant shall maintain such
Participant Solana Account for purposes of effecting receipt and delivery of Solana to/from the Trust’s account with such Custodian(s) to facilitate in-kind creation and redemption transactions.
|
2.
|
EXECUTION OF ORDERS. All orders for the creation or redemption of Creation Units shall be handled in accordance with the terms of
the Prospectus, the Trust Agreement, this Agreement and the procedures described in Attachment A to this Agreement. The Trust expects that creation and redemption transactions will take place in kind (“In-Kind Transactions”) or in cash
(“Cash Transactions”). In the event the procedures include the use of recorded telephone lines, the Participant hereby consents to such use. The Trust reserves the right to amend its Prospectus and the Trust Agreement and to issue
additional or other procedures relating to the manner of creating or redeeming Creation Units, and the Participant, and the Sponsor agree to comply with such procedures as may be issued from time to time, upon reasonable notice thereof.
|
Any Solana to be transferred in connection with any In-Kind Transaction order shall be transferred between the Participant Solana Account and a Trust account
established for such transfers pursuant to the Trust Agreement (each a “Solana Custody Account”) in accordance with the Prospectus, this Agreement and the procedures described in Attachment A hereto. Any cash
transferred in connection with any Cash Transaction order shall be transferred between the between the Participant’s bank account (“Participant Bank Account”) and a Trust account established for such transfers
pursuant to the Trust Agreement (the “Cash
2
Custody Account” and together with the Solana Custody Accounts, the “Custody Accounts”).
When placing an order to create one or more Creation Units, the Participant must designate the Participant Solana Account or Participant Bank Account that will transmit Solana or cash to one of the Trust’s Custody Accounts. When placing an order to
redeem one or more Creation Units, the Participant must designate the Participant Solana Account or Participant Bank Account to which the Trust will transmit Solana. Participant acknowledges that the Trust and the Sponsor can determine in their
discretion which Custody Account will receive Solana or cash from or transmit Solana or cash to the Participant Solana Account or Participant Bank Account, as applicable, and Participant agrees to transact with the Custody Account specified by the
Trust and the Sponsor in connection with each Creation Unit transaction. The Participant shall be responsible for all costs and expenses relating to or connected with any transfer of Solana or cash between the Participant Solana Account or
Participant Bank Account and a Custody Account, including any late fees and other charges, if any, for which the Trust or Sponsor becomes responsible in the event that Solana or cash is not transferred from the Participant Solana Account or
Participant Bank Account in accordance with this Agreement.
The Participant understands and acknowledges that the Transfer Agent will not effect a creation or redemption until it has received confirmation of receipt from the
applicable Custodian of the Participant’s Solana or cash transfer to one of the Trust’s Custody Accounts (in the case of a creation), or the confirmation of receipt of incoming security transfer via the Fed Book Entry System and/or DTC (in the case
of a redemption).
The Participant acknowledges and agrees on behalf of itself and any party for which it is acting (whether such party is a customer or otherwise) that each order to
create or redeem a Creation Unit (“Order”) may not be revoked by the Participant after its delivery to and acceptance by the Sponsor. Notwithstanding the foregoing, the Sponsor and the Transfer Agent on behalf of the Trust each agrees to undertake
commercially reasonable efforts to accommodate requests by the Participant to cancel any Purchase Order or Redemption Order (as defined in Attachment A) before the applicable order cut-off time specified in Attachment A. In the event that the
Sponsor and/or the Transfer Agent cancels a Purchase Order or Redemption Order at the Participant’s request, the Participant agrees to bear reasonable exchange or processing fees, if applicable. A form of Creation/Redemption Order Form is attached
hereto as Attachment B.
As set forth in Attachment A, the Sponsor shall have the absolute right, but shall have no obligation, to reject any Purchase Order or Redemption Order (i) it
determines not to be in proper form; (ii) the acceptance or receipt of which could, in the opinion of counsel to the Sponsor, be unlawful; or (iii) if circumstances outside the control of the Sponsor, the Transfer Agent or the Trust’s Custodians, as
applicable, make it, for all practical purposes, not feasible to process Creation Units. The Sponsor shall reject a Purchase or Redemption Order if it believes that such order would have adverse tax consequences to the Trust or its shareholders.
The Sponsor shall notify the Participant prior to such rejection of its intention to reject such Purchase Order or Redemption Order and (to the extent it is permitted to do so) the reason for such rejection, and in the event that the rejection was
due to the Purchase Order or Redemption Order not being in proper form, to the extent possible, provide the Participant an opportunity to place the Purchase Order or Redemption Order in proper form prior to rejection. Neither the Sponsor nor the
Transfer Agent shall be liable to any person by reason of the rejection of any Purchase Order or Redemption Order.
3
Notwithstanding the foregoing, the Sponsor will promptly cause to be returned to the Participant upon rejection of a Purchase Order or Redemption Order all
consideration, including Shares, Solana or cash tendered by the Participant, including any transaction fees, in respect of such rejected Purchase Order or Redemption Order.
|
3.
|
ROLE OF PARTICIPANT. The Participant acknowledges and agrees that for all purposes of this Agreement, the Participant shall have no
authority in any matter or in any respect to act as agent of the Sponsor, the Transfer Agent, the Custodians or the Trust.
|
|
(a)
|
In executing this Agreement, the Participant agrees, in connection with any purchase or redemption transactions in which it acts for a customer or for any
other DTC Participant or indirect participant, or any other beneficial owner of Shares (each a “Beneficial Owner”), that it shall extend to any such party all of the rights, and shall be bound by all
of the obligations, of a DTC Participant in addition to any obligations that it undertakes hereunder or in accordance with the Prospectus.
|
|
(b)
|
The Participant agrees (i) subject to any privacy obligations or other obligations arising under the federal or state securities laws it may have to its
customers, to assist the Sponsor in ascertaining certain information regarding sales of Shares made by or through Participant upon the request of the Trust or the Sponsor necessary for the Trust to comply with its obligations to distribute
information to its shareholders as may be required from time to time under applicable state or federal securities laws, and (ii) to deliver prospectuses, as may be amended or supplemented from time to time, proxy material, annual and other
reports of the Trust or other similar information that the Trust is obligated to deliver to their shareholders to the Participant’s customers that custody Shares with the Participant, after receipt from the Trust or the Sponsor of
sufficient quantities to allow mailing thereof to such customers. None of the Sponsor, the Trust or any of their respective affiliates shall use the names, addresses and other information concerning Participant’s customers for any purpose
except in connection with the performance of their duties and responsibilities hereunder and except for servicing and informational mailings described in this clause (b) of Section 3, or as may otherwise be required by applicable law.
|
|
(c)
|
The Participant affirms that it has procedures in place reasonably designed to protect the privacy of non-public personal consumer/customer financial
information to the extent required by applicable law, rule and regulation.
|
|
(d)
|
The Participant further represents that its Anti-Money Laundering Program (“AML Program”), at a minimum, (i)
designates a compliance officer to administer and oversee the AML Program, (ii) provides ongoing employee training, (iii) includes an independent audit function to test the effectiveness of the AML Program, (iv) establishes internal
policies, procedures and controls that are tailored to its particular business, (v) includes a customer identification program consistent with the rules under Sec. 326 of the USA Patriot Act, (vi) provides for the filing of all necessary
anti-money laundering reports including, but not limited to, currency transaction reports and suspicious activity reports, (vii) provides for screening all new and existing customers against the Office of Foreign Assets Control list and any
other government list that is or becomes required under the Act and (viii) allows for appropriate regulators to examine its AML books and records.
|
4
|
(e)
|
The Participant represents that from time to time it may be a Beneficial Owner (as that term is defined in Rule 16a-1(a)(2) of the Securities Exchange Act
of 1934 (the “Exchange Act”)) of Shares. To the extent that it is a Beneficial Owner of Shares, the Participant agrees to irrevocably appoint the Sponsor as its attorney and proxy with full authorization and power to vote (or abstain from
voting) its beneficially owned Shares. The Sponsor, as attorney and proxy for the Participant under this Section 3(e), (i) is hereby given full power of substitution and revocation; (ii) may act through such agents, nominees or attorneys
as it may appoint from time to time; and (iii) may provide voting instructions to such agents, nominees or substitute attorneys. For the avoidance of doubt, the Shares will not include those Shares for which the Participant is the record
owner but which are held for the benefit of third parties or in customer or fiduciary accounts in the ordinary course of business. It shall be the responsibility of the Participant to instruct the Sponsor in writing as to which Shares will
be voted by the Sponsor as attorney, agent and proxy and provide the Sponsor with any notices it receives with respect to voting Shares.
|
|
4.
|
PARTICIPANT REPRESENTATIONS; MARKETING MATERIALS; IDENTIFICATION IN REGISTRATION STATEMENT.
|
|
(a)
|
The Participant represents, warrants and agrees that it will not make any representations concerning the Trust, the Creation Units or the Shares other than
those consistent with the then current Prospectus or any promotional or sales literature furnished to the Participant by the Sponsor or the Trust, or any such other information or materials permitted by clause (b) of this Section 4, or
filed by the Trust with the SEC or made available on any website controlled Sponsor or the Trust. Participant shall not furnish or cause to be furnished to any person or display or publish any information or material relating to the Shares
or the Trust that are not consistent with the Trust’s then-current Prospectus. Copies of the then-current Prospectus and any such printed supplemental information or amendments thereto will be supplied by the Sponsor to the Participant in
reasonable quantities upon request.
|
|
(b)
|
The Participant agrees not to furnish or cause to be furnished by Participant or its employees to any person or display or publish any information or
materials relating to the Trust (including, without limitation, promotional materials and sales literature, advertisements, press releases, announcements, statements, posters, signs or other similar materials, but not including any
materials prepared and used for Participant’s internal use only or brokerage communications prepared by the Participant in the normal course of its business and consistent with the Trust’s then current Prospectus and in accordance with
applicable laws and regulations) (“Marketing Materials”), except such Marketing Materials as may be furnished to the Participant by the Sponsor or the Trust and such other Marketing Materials as are
consistent with the Trust’s then current Prospectus and have been approved by the Sponsor in writing prior to use; provided that such Marketing Materials clearly indicate that such Marketing Materials are prepared and distributed by
Participant. All Marketing Materials prepared by the Participant shall be filed with FINRA or the SEC, as applicable, by the Participant, and shall comply with all applicable rules and regulations of FINRA and the SEC.
|
|
(c)
|
The Participant understands that the Trust will not be advertised or marketed as an open-end investment company, i.e., as a mutual fund, which offers
redeemable securities, and that any advertising materials will prominently disclose that Shares are redeemable only in Creation Unit size by or through a Participant and on an in-kind basis, as applicable, as
|
5
described in the Prospectus. Further, the Participant understands that the Trust will not be registered as an investment company under the Investment Company Act of
1940, as amended. In addition, the Participant understands that any advertising material that addresses redemptions of Shares, including the Prospectus, will disclose that the owners of Shares may acquire Shares and tender Shares for redemption to
the Fund in Creation Unit aggregations only.
Notwithstanding anything to the contrary in this Agreement, the Participant and its affiliates may prepare and circulate in the regular course of their businesses
research reports that include information, opinions or recommendations relating to Shares (i) for public dissemination; provided that such research reports compare the relative merits and benefits of Shares with other products and are not used for
the purpose of marketing shares and comply with all applicable rules and regulations of FINRA or the SEC, or (ii) for internal use by the Participant and other materials that include information, opinions or recommendations relating to Shares.
Participant will be identified in the Prospectus, Marketing Materials, or on the Trust’s website to the extent required by law, rule, or other regulation. If the
Participant is identified in the Prospectus, Marketing Materials, or on the Trust’s website, within a reasonable amount of time upon the termination of this Agreement, (i) the Sponsor shall remove such identification from the Prospectus in the
amendment of either the Registration Statement or a supplement to the Prospectus, as applicable, next occurring after the date of the termination of this Agreement and (ii) the Sponsor shall promptly update the Trust’s website to remove any
identification of the Participant as an authorized participant of the Trust.
|
5.
|
TITLE TO SOLANA / TRUST SHARES.
|
|
(a)
|
The Participant represents and warrants on behalf of itself and any party for which it acts that, upon delivery of Solana to a Custodian, the Trust will
acquire good and unencumbered right to such Solana, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claims, including, without limitation, any restriction upon the sale or transfer of such
Solana imposed by any agreement or arrangement entered into by the Participant or any party for which it is acting in connection with a transaction to purchase Shares.
|
|
(b)
|
The Participant represents and warrants that it will not submit a Redemption Order with the Transfer Agent for the purpose of redeeming a Creation Unit
unless it first ascertains that it or its customer, as the case may be, owns outright or has full legal authority and legal and beneficial right to tender for redemption the requisite number of Shares, and that such Shares have not been
loaned or pledged to another party and are not the subject of a repurchase agreement, securities lending agreement, or any other agreement that would preclude the delivery of such Shares to the Trust. In the event that the Sponsor, the
Trust and/or the Transfer Agent reasonably believes that the Participant does not have the requisite number of Shares to be redeemed as a Creation Unit, the Trust and/or the Sponsor or the Transfer Agent, upon consultation with the Trust,
may reject without liability the Participant’s Redemption Order.
|
|
6.
|
FEES. In connection with the creation or redemption of Creation Units, the Transfer Agent shall charge, and the Participant agrees
to pay, the Transaction Fee prescribed in the Prospectus applicable to creations or redemptions, or, when applicable, the Transaction Fee and such
|
6
|
|
additional amounts as may be prescribed pursuant to the Prospectus. The Transaction Fee and such additional amounts may be waived or otherwise adjusted from time to time
subject to the provisions relating thereto and any limitations as prescribed in the Prospectus.
|
|
7.
|
AUTHORIZED PERSONS. Concurrently with the execution of this Agreement and as requested from time to time thereafter, the Participant
shall deliver to the Sponsor and the Transfer Agent, duly certified as appropriate by its secretary or other duly authorized officer, a certificate setting forth the names and signatures of all persons authorized to give instructions
relating to activity contemplated hereby or any other notice, request or instruction on behalf of the Participant (each, an “Authorized Person”). A form of such certificate is attached hereto as
Attachment C. Such certificate may be accepted and relied upon by the Sponsor and the Transfer Agent as conclusive evidence of the facts set forth therein and shall be considered to be in full force and effect until receipt by the Sponsor
and the Transfer Agent of a superseding certificate bearing a subsequent date. The Transfer Agent shall issue to each Authorized Person a unique personal identification number (“PIN Number”) by which
such Authorized Person and the Participant shall be identified and instructions issued by the Participant hereunder shall be authenticated. Upon the termination or revocation of authority of such Authorized Person by the Participant, the
Participant shall give prompt written notice of such fact to the Sponsor and the Transfer Agent and such notice shall be effective upon receipt by both the Sponsor and the Transfer Agent.
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8.
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INDEMNIFICATION. This Section 8 shall survive the termination of this Agreement.
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(a)
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The Participant hereby agrees to indemnify and hold harmless the Sponsor, Transfer Agent and the Trust, as well as their respective affiliates, directors,
officers, employees and agents, and each person, if any, who controls such persons within the meaning of Section 15 of the 1933 Act (each a “Sponsor Indemnified Party”) from and against any loss,
liability, cost and expense (including reasonable attorneys’ fees) incurred by such Sponsor Indemnified Party as a result of (i) any material breach by the Participant of any provision of this Agreement that relates to the Participant,
unless such breach occurred as a result of the Authorized Participant’s reasonable adherence on instructions reasonably given to it by such Sponsor Indemnified Party; (ii) any failure on the part of the Participant to perform any of its
obligations set forth in the Agreement, unless such failure occurred as a result of the Authorized Participant’s reasonable adherence on instructions reasonably given to it by such Sponsor Indemnified Party; (iii) any failure by the
Participant to comply with applicable laws, including rules and regulations of self-regulatory organizations in relation to its role as the Participant, except that the Participant shall not be required to indemnify a Sponsor Indemnified
Party to the extent that such failure was caused by the Participant’s adherence to instructions given or representations made by the Sponsor, or any Sponsor Indemnified Party, as applicable; (iv) any breach by the Participant of any
representation provided in this Agreement or provided pursuant to Attachment A; or (v) actions of such Sponsor Indemnified Party in reliance upon any instructions issued and reasonably believed by the Sponsor or the Transfer Agent, as
applicable, to be genuine and to have been given by the Participant except to the extent that the Participant had previously revoked a PIN Number used in giving such instructions or representations (where applicable) and such revocation was
given by the Participant and received by the Sponsor and the Transfer Agent in accordance with the terms of Section 7 hereto. The Participant and the Sponsor understand and agree that the Trust is entitled and
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7
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intends to proceed directly against the Participant in the event that the Participant fails to honor any of its obligations pursuant to this Agreement that benefit the
Trust. The foregoing shall not apply to any loss, damage, charge, liability, cost, expense, cause of action, obligation, judgment or fee incurred by such Sponsor Indemnified Party arising out of Sponsor Indemnified Party’s gross negligence
or reckless or willful acts or omissions or the Sponsor Indemnified Party’s failure to perform any of its obligations or responsibilities under this Agreement. With respect to (i) through (iii) above, Sponsor Indemnified Party’s failure to
promptly acknowledge the Participant’s breach of, failure to perform or failure to comply with, the terms of this Agreement shall not negate the foregoing indemnification.
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(b)
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The Sponsor hereby agrees to indemnify and hold harmless the Participant, its respective subsidiaries, affiliates, directors, officers, employees and
agents, and each person, if any, who controls such persons within the meaning of Section 15 of the 1933 Act (each a “Participant Indemnified Party”) from and against any loss, liability, cost and
expense (including reasonable attorneys’ fees) incurred by such Participant Indemnified Party as a result of (i) any breach by the Sponsor of any provision of this Agreement that relates to the Sponsor; (ii) any failure on the part of the
Sponsor to perform any of its obligations set forth in this Agreement; (iii) any failure by the Sponsor to comply with applicable laws, including rules and regulations of self-regulatory organizations in relation to its role as Sponsor of
the Trust, (iv) actions of such Participant Indemnified Party in reliance upon any instructions issued or representations made in accordance with Attachment A (as it may be amended from time to time) reasonably believed by the Participant
to be genuine and to have been given by the Sponsor, in connection with the Participant’s acting in its capacity as an authorized participant, or (v) any untrue statement of a material fact contained in the Registration Statement of the
Trust or in any amendment thereof, or in any Prospectus or any statement of additional information, or any amendment thereof or supplement thereto, or arising out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements therein not misleading, in connection with the Participant’s acting in its capacity as an authorized participant. The foregoing shall not apply to any loss,
damage, charge, liability, cost, expense, cause of action, obligation, judgment or fee incurred by such Participant Indemnified Party arising out of Participant Indemnified Party’s gross negligence or reckless or willful acts or omissions
or the Participant Indemnified Party’s failure to perform any of its obligations or responsibilities under this Agreement. With respect to (i) through (iv) above, Participant Indemnified Party’s failure to promptly acknowledge Sponsor’s
breach of, failure to perform or failure to comply with, the terms of this Agreement shall not negate the foregoing indemnification.
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No party to this Agreement shall be liable to the other party or to any other person for any damages arising out of mistakes or errors in data provided to such
Sponsor Indemnified Party or Participant Indemnified Party, as the case may be, by a third party, or out of interruptions or delays of electronic means of communications with the Sponsor Indemnified Party or Participant Indemnified Party.
The indemnity agreements contained in this Section shall remain in full force and effect regardless of any investigation made by or on behalf of the Participant, its
partners, stockholders, members, directors, officers, employees or any person (including each partner, stockholder, member, director, officer or employee of such person) who controls the Participant within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act, or
8
by or on behalf of the Sponsor, its partners, stockholders, members, managers, directors, officers, employees or any person who controls the Sponsor within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, and shall survive any termination of this Agreement. The Sponsor, for itself and on behalf of the Trust, Sponsor Indemnified Party, and the Participant agree promptly to notify, to
the extent practicable and legally permissible, each other of the commencement of any proceeding against it or any Participant Indemnified Party or Sponsor Indemnified Party, as the case may be, relating to this Agreement and, in the case of the
Sponsor, against any of the Sponsor’s officers or directors, in connection with the issuance and sale of the Shares or in connection with the Registration Statement.
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9.
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ACKNOWLEDGEMENT. The Participant acknowledges receipt of the Prospectus and represents that it has reviewed such
document and understands the terms thereof.
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10.
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NOTICES. Except as otherwise specifically provided in this Agreement, all notices required or permitted to be
given pursuant to this Agreement shall be given in writing and delivered by personal delivery or by postage prepaid registered or certified U.S. first class mail, return receipt requested, or by electronic mail, telex, telegram or facsimile
or similar means of same day delivery (with a confirming copy by mail as provided herein). Unless otherwise notified in writing, all notices shall be given or sent as follows:
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If to the Sponsor:
Invesco Capital Management LLC
3500 Lacy Road, Suite 700
Downers Grove, Illinois 60515
Attn: Head of Legal, US ETFs
If to the Trust:
Invesco Galaxy Solana ETF
3500 Lacy Road, Suite 700
Downers Grove, Illinois 60515
Attn: Head of Legal, US ETFs
If to the Transfer Agent
The Bank of New York Mellon
240 Greenwich Street
New York, New York 10286
Attn: ETF Services Group
If to the Participant
[ ]
[ ]
[ ]
Attn: [ ]
All notices to the Trust, Sponsor, Transfer Agent and Participant shall be directed to the address or telephone or email provided by such party in writing, except in
the case of communications by the Sponsor or Transfer Agent to the Participant during, or as part of, the order creation or redemption process as detailed in Attachment A to this Agreement, especially the Sponsor’s
9
or Transfer Agent’s attempt to contact an Authorized Person of the Participant with respect to, among other things, ambiguous instructions, the suspension or
cancellation of an order as discussed in Attachment A, the Sponsor and the Transfer Agent agree to contact a representative of the ETF Trading Desk of the Participant.
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11.
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TERMINATION AND AMENDMENT. This Agreement shall become effective in this form as of the date accepted by the
Transfer Agent and may be terminated at any time by any party upon thirty (30) days’ prior notice to the other parties (i) unless earlier terminated by the Transfer Agent in the event of a breach of this Agreement or the procedures
described herein by the Participant or (ii) in the event that the Trust is terminated pursuant to the Trust Agreement. This Agreement supersedes any prior agreement between the parties with respect to the subject matter contained herein.
This Agreement may be amended by the Sponsor from time to time upon ten (10) days’ prior written notice (unless such notice is otherwise waived) by the following procedure. The Sponsor will provide a copy of the amendment to the Transfer
Agent and the Participant via electronic mail. Any such amendment will become effective ten (10) days after such transmission. Titles and section headings are included solely for convenient reference and are not a part of this Agreement.
This Agreement and Attachment A hereto, which is hereby incorporated herein by reference, constitute the entire agreement between the parties regarding the matters contained herein and may be amended or modified only by a written document
signed by an authorized representative of each party.
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12.
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PROSPECTUS. The Sponsor will provide to the Participant copies of the then current Prospectus and any printed
supplemental information in reasonable quantities upon request. The Participant shall, upon request of the Trust, provide the Trust with sufficient documentation and other evidence that the Participant is providing prospectuses and, where
applicable, any printed supplemental information, to the purchasers of any Shares. The Sponsor represents, warrants and agrees that it will notify the Participant when a revised, supplemented or amended prospectus for any Shares is
available and deliver or otherwise make available to the Participant copies of such revised, supplemented or amended prospectus at such time and in such numbers as to enable the Participant to comply with any obligation it may have to
deliver such prospectus to customers. The Sponsor will make such revised, supplemented or amended prospectus available to the Participant no later than its effective date. The Sponsor shall be deemed to have complied with this Section 13
when the Participant has received such revised, supplemented or amended prospectus by email to the address noted for the Participant in Section 11, in printable form, with such number of hard copies as may be agreed from time to time by the
parties promptly thereafter.
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13.
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NO PROMOTION. Each of the Trust and the Sponsor agrees that it will not, without the prior written consent of the
Participant in each instance, (i) use in advertising, publicity, or otherwise the name of the Participant or any affiliate of the Participant, or any partner or employee of the Participant, nor any trade name, trademark, trade device,
service mark, symbol or any abbreviation, contraction or simulation thereof owned by the Participant or its affiliates, or (ii) represent, directly or indirectly, that any product or any service provided by the Trust or Sponsor has been
approved or endorsed by the Participant. Notwithstanding the foregoing, the Trust may name the Participant and describe the Participant’s role as an authorized participant of the Trust in the Prospectus to the extent required by law, rule,
or other regulation. Furthermore, the Sponsor and the Participant agree that they will not, without the prior written
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10
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consent of the other party in each such instance, disclose the terms of this Agreement, except for use in accordance with this Agreement or to the parties’ respective
officers, directors, employees, agents and representatives for use in accordance with this Agreement or as required by any applicable law or regulatory body. This provision shall survive termination or expiration of this Agreement.
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14.
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COUNTERPARTS. This Agreement may be simultaneously executed in several counterparts, each of which shall be an
original and all shall constitute but one and the same instrument.
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15.
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GOVERNING LAW. This Agreement shall be governed by and interpreted in accordance with the laws of the State of
Illinois without regard to the conflicts of laws provisions thereof. The parties irrevocably submit to the personal jurisdiction and service and venue of any federal or state court within the State of Illinois having subject matter
jurisdiction, for the purpose of any action, suit or proceeding arising out of or relating to this Agreement.
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16.
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ASSIGNMENT. Neither party may assign its rights or obligations under this Agreement (in whole or in part) without
the prior written consent of the other party, which shall not be unreasonably withheld; provided, that either party may assign its rights and obligations hereunder (in whole, but not in part) without such consent to an entity acquiring all,
or substantially all, of its assets or business. Notwithstanding the aforementioned termination provisions, in the event that an entity acquires all or substantially all of the Participant’s assets or business, the Sponsor may elect within
a limited period of time not to exceed thirty (30) days from the date upon which such acquisition was publicly announced to immediately terminate this Agreement.
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17.
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SEVERANCE. If any provision of this Agreement is held by any court pursuant to any Act, Regulation, Rule or
decision or by any other governmental or supranational body or authority or regulatory or self regulatory organization to be invalid, illegal or unenforceable for any reason, it shall be invalid, illegal or unenforceable only to the extent
so held and all parties shall remain responsible for all actions or omissions not relating to such provision and the invalidity, illegality or unenforceability of such provisions shall not affect the validity, legality or enforceability of
the other provisions of this Agreement, so long as this Agreement, as so modified, continues to express, without material change, the original intentions of the parties as to the subject matter of this Agreement and the deletion of such
portion of this Agreement will not substantially impair the respective benefits, obligations or expectations of the parties to this Agreement.
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11
IN WITNESS WHEREOF, the duly authorized representatives of the below parties hereto have executed this Agreement the effective date of which
shall be date of the last dated signature below (the “Effective Date”).
INVESCO CAPITAL MANAGEMENT LLC
SPONSOR
BY: ________________________________
Name: _____________________________
TITLE: _____________________________
DATE: _____________________________
[PARTICIPANT]
PARTICIPANT
BY:
_______________________________
Name:
_____________________________
TITLE:
____________________________
DATE:
____________________________
Accepted by:
INVESCO GALAXY SOLANA ETF
By Invesco Capital Management LLC
As Sponsor of Invesco Galaxy Solana ETF
BY:
_______________________________
Name:
_____________________________
TITLE:
____________________________
DATE:
____________________________
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BANK OF NEW YORK MELLON
TRANSFER AGENT
BY:
_____________________________
Name:
___________________________
TITLE:
__________________________
DATE:
__________________________
13
ATTACHMENT A
Creation and Redemption Procedures
Scope of Procedures and Overview
This Attachment A to the Participant Agreement (the “Participant Agreement”) supplements the Participant
Agreement, the Prospectus and the Trust Agreement with respect to the procedures (the “Procedures”) to be used in processing (1) a creation order for the creation of one or more Baskets (as defined below) (“Creation Order”) of Shares of Invesco Galaxy Solana ETF (the “Trust”) and a (2) redemption order for the redemption of one or more Baskets (as defined below) (“Redemption Order”) of Shares of the Trust. Shares may be created or redeemed only in blocks of 5,000 Shares (each such block, a “Basket”) for the Trust.
For purposes of these Procedures, a “Business Day” means a day other than Saturday, Sunday or other day when banks and/or
securities exchanges are open for regular trading.
Baskets are issued pursuant to the Prospectus, which will be obtained by each Participant from the Trust’s website at http://www.Invesco.com or its
successor thereof and are issued and redeemed in accordance with the Trust Agreement and the Participant Agreement. Baskets may be created and redeemed on any Business Day.
Creation Orders and Redemption Orders are, collectively, the “Orders.”
Authorized Participants (“Participants”) may submit Orders to the Transfer Agent (i) through the Transfer Agent’s
electronic order entry system, as such may be made available and constituted from time to time, the use of which shall be subject to the terms and conditions of the Electronic Services Agreement, which is incorporated by reference herein (the “Website Based Orders”), and (ii) by telephone (and faxed order form(s)) according to these Procedures as provided in Annex I (the “Telephone/Fax Based Orders”).
The Participant must execute the Electronic Access Service Agreement (“ESA”) with the Transfer Agent in order for a
Participant to be able to submit Website Based Orders. RSA SecurID token cards are issued to each of the Authorized Persons, which may be used to access the Transfer Agent’s website and input Orders as described herein and pursuant to the Authorized
Participant Interface User Guide, incorporated herein by reference.
“Order Cut-Off Time” means, for an in-kind transaction, 4:00 p.m. Eastern time for a T+1 Order, and for a cash
transaction, 2:30 p.m. Eastern time for a T+1 Order.
“Creation Order Date” means a Business Day on which an order to create one or more Creation Baskets was placed by a
Participant with the Transfer Agent by the Order Cut-Off Time.
“Redemption Order Date” means a Business Day on which an order to redeem one or more Creation Baskets placed by a
Participant with the Transfer Agent by the Order Cut-Off Time.
“Settlement Time” means any time within two Business Days immediately following the Creation Order Date or the Redemption
Order Date, as applicable.
“Redemption Distribution” means, subject to deduction of any tax or other governmental charges due thereon, the cash in an
amount equal to the product obtained by multiplying (i) the number of Creation Baskets set forth in the relevant Redemption Order by (ii) the Net Asset Value Per Basket of the Trust as of the close of the Trading Session of the exchange on the
Redemption Order Date.
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“Creation Basket” means the number of shares issued or redeemed by the Trust in a creation or redemption transaction as
set forth in the Prospectus.
“Creation Basket Deposit” means the quantity of Solana required to create each Creation Basket in a creation transaction
as determined by the Administrator each Business Day.
Each Participant is responsible for ensuring that the Creation Basket Deposit and/or the Creation Basket it intends to transfer to the Trust in exchange for
Creation Baskets or redemption proceeds, as applicable, is available for transfer to such Trust in the manner and at the times described in these Procedures.
Participants will be required to pay a nonrefundable per order transaction fee of $500 to the Transfer Agent (the “Transaction
Fee”).
IMPORTANT NOTES:
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•
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Any Creation Order is subject to acceptance or rejection by the Transfer Agent, in consultation with the Sponsor, for the reasons set forth in the Trust Agreement or the
Participant Agreement.
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•
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Any Redemption Order is subject to acceptance or rejection by the Transfer Agent, in consultation with the Sponsor, for the reasons set forth in the Trust Agreement or
the Participant Agreement.
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•
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All Orders are subject to the provisions of the Trust Agreement and the Participant Agreement relating to unclear or ambiguous instructions.
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TRANSFER AGENT CONTACT INFORMATION:
BNY Mellon ETF Order Desk
240 Greenwich Street
New York, NY 10286
Email: BNYMETFOrderDesk@bnymellon.com
Phone: 1-844-545-1258
Fax: 1-732-667-9478 / 9549
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ANNEX I
WEBSITE BASED ORDERS
AND
TELEPHONE/FAX BASED ORDERS
CREATION PROCEDURES
1. PLACING A CREATION ORDER.
Participants may submit Website Based Orders or Fax/Telephone Based Orders to the Transfer Agent as provided by these Procedures.
NOTE THAT IF THE PARTICIPANT PLACES A TELEPHONE/FAX BASED ORDER, THE TELEPHONE CALL OR FAX IN WHICH THE CONFIRMATION NUMBER IS ISSUED INITIATES THE CREATION ORDER
PROCESS BUT DOES NOT ALONE CONSTITUTE THE CREATION ORDER. A CREATION ORDER IS CONSIDERED A COMPLETE CREATION ORDER ONLY UPON RECEIPT OF THE CONFIRMATION NUMBER.
Creation Orders for Creation Baskets may be initiated only on Business Days. Creation Orders may only be made in whole Creation Baskets of the Trust.
To begin a Creation Order, an Authorized Person of the Participant may telephone the Transfer Agent at 1-844-545-1258 or such other number as the Sponsor
designates in writing to the Participant. This telephone call must be made by an Authorized Person of the Participant and answered by the Transfer Agent before the Order Cut-Off Time. Upon verifying the authenticity of the Authorized Person (as
determined by the use of the appropriate PIN Number), the Transfer Agent will request that the Authorized Person place the Creation Order. To do so, the Authorized Person must provide the appropriate ticker symbol when referring to the Trust. After
the Authorized Person has placed the Creation Order, the Transfer Agent will read the Creation Order back to the Authorized Person. The Authorized Person then must confirm that the Creation Order has been taken correctly by the Transfer Agent. If
the Authorized Person confirms that the Creation Order has been taken correctly, the Transfer Agent will issue a confirmation number (the “Confirmation Number”) to the Authorized Person.
All Creation Orders may also be placed by an Authorized Person as a Website Based Order by the Order Cut-Off Time.
PLEASE NOTE: A CREATION ORDER REQUEST IS NOT COMPLETE UNTIL THE CONFIRMATION NUMBER IS ISSUED BY THE TRANSFER AGENT. WITH RESPECT TO THE TRUST, A CREATION ORDER
FOR CREATION BASKETS CANNOT BE CANCELED BY THE PARTICIPANT AFTER THE ORDER CUT-OFF TIME. INCOMING TELEPHONE CALLS ARE QUEUED AND WILL BE HANDLED IN THE SEQUENCE RECEIVED. ACCORDINGLY, THE PARTICIPANT SHOULD NOT HANG UP AND REDIAL. CALLS THAT ARE
IN PROGRESS AT THE ORDER CUT-OFF TIME ARE VALID AND THE CREATION ORDER WILL BE TAKEN. PLEASE NOTE THAT "IN PROGRESS" IS DEFINED AS A PARTICIPANT ACTUALLY SPEAKING WITH THE TRANSFER AGENT. CALLS THAT ARE PLACED BEFORE
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THE ORDER CUT-OFF TIME THAT ARE IN THE HOLDING QUEUE UNANSWERED AT OR AFTER THE ORDER CUT-OFF TIME WILL BE VERBALLY DENIED. INCOMING CALLS THAT ARE RECEIVED
AFTER THE ORDER CUT-OFF TIME WILL NOT BE ANSWERED BY THE TRANSFER AGENT. ALL TELEPHONE CALLS WILL BE RECORDED.
2. RECEIPT OF CONFIRMATION.
Subject to the conditions that a properly completed telephone or fax Creation Order has been placed by the Participant not later than the Order Cut-Off Time, and
other provisions contained in these procedures, the Sponsor will accept the Creation Order on behalf of the Trust and will confirm in writing to the Participant that its Creation Order has been accepted within 45 minutes after the designated Order
Cut-Off Time on the Business Day that the Creation Order is received. Once the Creation Order has been approved by the Sponsor, the Sponsor will sign or time-stamp the Creation Order and send that Creation Order to the Transfer Agent.
Typically, if a Web-Based Order is submitted, the Sponsor may confirm the order on-line. Alternatively, if the Sponsor prefers to confirm Orders via fax, the
Transfer Agent will download and print the Order Form and fax it to the Sponsor for review and approval. Upon receipt of the Order Form signed by the Sponsor, the Transfer Agent will issue an email confirmation to the Participant and the Sponsor to
reflect the Order status (approval or cancellation).
3. QUALITY ASSURANCE.
After a Confirmation Number is issued by the Transfer Agent to the Participant, the Participant will fax a written version of the Creation Order to the Transfer
Agent. Upon receipt, the Transfer Agent should immediately telephone the Participant if the Transfer Agent believes that the Creation Order has not been completed correctly by the Participant. In addition, the Transfer Agent will telephone the
Participant if the Transfer Agent is in non-receipt of the Creation Order within 15 minutes after the Creation Order has been called into the Transfer Agent.
4. REJECTING OR SUSPENDING CREATION ORDERS.
The Sponsor reserves the absolute right to reject acceptance of a Creation Order or Creation Basket Deposit if (i) the Sponsor or Transfer Agent has determined
the Creation Order or Creation Basket Deposit is not in proper form; (ii) the Sponsor has determined the acceptance or receipt of which would have adverse tax consequences to the Trust or to the Shareholders; (iii) the acceptance or receipt of which
could, in the opinion of counsel to the Sponsor, be unlawful; or (iv) circumstances outside the control of the Sponsor or the Transfer Agent make it for all practical purposes not feasible to process Creation Baskets. The Sponsor shall notify the
Participant of a rejection of any Creation Order. The Sponsor may not revoke a previously accepted Creation Order, as defined in these Procedures.
Neither the Sponsor nor its delegate will be liable to any person or in any way for any loss or damages that may result from any such rejection.
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5. DETERMINATION OF PAYMENT AMOUNT.
As promptly as practicable following the publication of the net asset value of the Trust and the net asset value per Share of the Shares on the Creation Order
Date, the Sponsor shall communicate to the Participant the amount of Solana or cash necessary for the Creation Basket Deposit and details of the method of payment (e.g., wiring instructions) required for the Creation Basket Deposit.
6. CONTRACTUAL SETTLEMENT.
The Creation Basket Capital Contribution must be delivered through the DTC to an account at the DTC maintained by the Custodian on behalf of the Sponsor and the
Trust, or Federal Fund Wire, on or before the Settlement Time, together with the applicable Transaction Fee. The Creation Basket will be credited to the Participant at the Settlement Time. The Custodian on behalf of both the Sponsor and the Trust
will cause the Trust to deposit the Creation Basket with the DTC in accordance with the DTC’s customary procedures, for the credit of the account of the Participant that placed the Creation Order.
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REDEMPTION PROCEDURES
1. PLACING A REDEMPTION ORDER.
Participants may submit Website Based Orders or Telephone/Fax Based Orders to the Transfer Agent as provided by these Procedures.
NOTE THAT IF THE PARTICIPANT PLACES A TELEPHONE/FAX BASED ORDER, THE TELEPHONE CALL OR FAX IN WHICH THE CONFIRMATION NUMBER IS ISSUED INITIATES THE REDEMPTION
ORDER PROCESS BUT DOES NOT ALONE CONSTITUTE THE REDEMPTION ORDER. A REDEMPTION ORDER IS CONSIDERED COMPLETE ONLY UPON RECEIPT OF THE CONFIRMATION NUMBER.
Redemption Orders may be initiated only on Business Days. Redemption Orders may only be made in whole Creation Baskets of the Trust.
To begin a Redemption Order, the Authorized Person of the Participant may telephone the Transfer Agent at 1-844-545-1258 or such other number as the Sponsor
designates in writing to the Participant. This telephone call must be made by an Authorized Person of the Participant and answered by the Transfer Agent before the Order Cut-Off Time. Upon verifying the authenticity of the Authorized Person (as
determined by the use of the appropriate PIN Number), the Transfer Agent will request that the Authorized Person place the Redemption Order. To do so, the Authorized Person must provide the appropriate ticker symbol when referring to the Trust.
After the Authorized Person has placed the Redemption Order, the Transfer Agent will read the Redemption Order back to the Authorized Person. The Authorized Person then must confirm that the Redemption Order has been taken correctly by the Transfer
Agent. If the Authorized Person confirms that Redemption Order has been taken correctly, the Transfer Agent will issue a confirmation number (the “Confirmation Number”) to the Authorized Person.
All Redemption Orders may also be placed by an Authorized Person as a Website Based Order by the Order Cut-Off Time.
PLEASE NOTE: A REDEMPTION ORDER REQUEST IS NOT COMPLETE UNTIL THE CONFIRMATION NUMBER IS ISSUED BY THE TRANSFER AGENT. WITH RESPECT TO THE TRUST, A REDEMPTION
ORDER FOR CREATION BASKETS CANNOT BE CANCELED BY THE PARTICIPANT AFTER THE ORDER CUT-OFF TIME. INCOMING TELEPHONE CALLS ARE QUEUED AND WILL BE HANDLED IN THE SEQUENCE RECEIVED. ACCORDINGLY, THE PARTICIPANT SHOULD NOT HANG UP AND REDIAL. CALLS THAT
ARE IN PROGRESS AT THE ORDER CUT-OFF TIME ARE VALID AND THE REDEMPTION ORDER WILL BE TAKEN. PLEASE NOTE THAT "IN PROGRESS" IS DEFINED AS A PARTICIPANT ACTUALLY SPEAKING WITH THE TRANSFER AGENT. CALLS THAT ARE PLACED BEFORE THE ORDER CUT-OFF TIME
THAT ARE IN THE HOLDING QUEUE UNANSWERED AT OR AFTER THE ORDER CUT-OFF TIME WILL BE VERBALLY DENIED. INCOMING CALLS THAT ARE RECEIVED AFTER THE ORDER CUT-OFF TIME WILL NOT BE ANSWERED BY THE TRANSFER AGENT. ALL TELEPHONE CALLS WILL BE RECORDED.
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2. RECEIPT OF CONFIRMATION.
Subject to the conditions that a properly completed telephone or fax Redemption Order has been placed by the Participant not later than the Order Cut-Off Time,
and except as otherwise provided in these procedures, the Sponsor will accept the Redemption Order on behalf of the Trust and will confirm in writing to the Participant that its Redemption Order has been accepted within 45 minutes after the
designated Order Cut-Off Time on the Business Day that the Redemption Order is received. Once the Redemption Order has been approved by the Sponsor, the Sponsor will sign or time-stamp the Redemption Order and send that Redemption Order to the
Transfer Agent.
Typically, if a Web-Based Order is submitted, the Sponsor may confirm the order on-line. Alternatively, if the Sponsor prefers to confirm Orders via fax, the
Transfer Agent will download and print the Order Form and fax it to the Sponsor for review and approval. Upon receipt of the Order Form signed by the Sponsor, the Transfer Agent will issue an email confirmation to the Participant and the Sponsor to
reflect the Order status (approval or cancellation).
3. QUALITY ASSURANCE.
After a Confirmation Number is issued by the Transfer Agent to the Participant, the Participant will fax a written version of the Redemption Order to the Transfer
Agent. Upon receipt, the Transfer Agent should immediately telephone the Participant if the Transfer Agent believes that the Redemption Order has not been completed correctly by the Participant. In addition, the Transfer Agent will telephone the
Participant if the Transfer Agent is in non-receipt of the Redemption Order within 15 minutes after the Redemption Order has been called into the Transfer Agent.
4. REJECTING OR SUSPENDING REDEMPTION ORDERS.
The Sponsor shall reject any Redemption Order the fulfillment of which its counsel advises would be illegal under applicable laws and regulations. The Sponsor
may, in its discretion, suspend the right of redemption, or postpone the Settlement Time, (i) for any period during which an Exchange is closed other than customary weekend or holiday closings, or trading is suspended or restricted; (ii) for any
period during which an emergency exists as a result of which delivery, disposal or evaluation of the Trust’s assets is not reasonably practicable; or (iii) for such other period as the Sponsor determines to be necessary for the protection of
Shareholders. The Sponsor will reject a Redemption Order if the order is not in proper form or if the fulfillment of the order, in the opinion of its counsel, might be unlawful. The Sponsor shall notify the Participant of a rejection or suspension
of any Redemption Order. The Sponsor may not revoke a previously accepted Redemption Order, as defined in these Procedures.
Neither the Sponsor nor its delegate will be liable to any person or in any way for any loss or damages that may result from any such suspension or postponement.
5. DETERMINATION OF CASH DISTRIBUTION.
In the event of a hard fork or other similar event, as promptly as practicable following the publication of the net asset value of the Trust and the net asset
value per Share of the Shares on the Redemption Order Date, the Sponsor shall communicate to the Participant the amount of cash to be delivered in the Redemption Distribution.
6. CONTRACTUAL SETTLEMENT.
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The Creation Baskets must be credited to an account at the DTC maintained by the Custodian along with the Transaction Fee on or before the Settlement Time. The
Redemption Distribution shall be delivered through the DTC to the account of the Participant as recorded on the book entry system of the DTC at the Settlement Time.
21
22
23
Exhibit 10.4
COINBASE PRIME BROKER AGREEMENT
General Terms And Conditions
Exhibit A: Coinbase Custody Custodial Services Agreement
Exhibit B: Coinbase Master Trading Agreement
Appendix 1: Prohibited Use, Prohibited Business, and Conditional Use
Appendix 2: E-sign Disclosure and Consent
Appendix 3: Coinbase Prime Fee Schedule
General Terms and Conditions
| 1. |
Introduction
|
This Coinbase Prime Broker Agreement (as defined below), dated as of October [ ], 2025, is entered into by and between Invesco Galaxy Solana ETF (“Client”) and Coinbase,
Inc. (“Coinbase”), on behalf of itself and as agent for the Coinbase Entities (as defined below), for purposes of establishing a Coinbase prime broker account for Client (the “Prime Broker Account”). This Coinbase Prime Broker
Agreement sets forth the terms and conditions on which the Coinbase Entities will open and maintain Client accounts for services relating to custody, trade execution and other services for certain digital assets (“Digital Assets”) and to
otherwise transact business with Client (the “Prime Broker Services”). Certain Prime Broker Services are not available to all clients, including clients residing outside the United States. Capitalized terms not defined in these General Terms
and Conditions (“General Terms”) shall have the meanings assigned to them in the respective exhibit, appendix, addendum or supplement hereto.
Notwithstanding anything to the contrary herein, Coinbase, on behalf of itself and as agent for the Coinbase Entities, and Client acknowledge and agree that this Coinbase Prime
Broker Agreement shall not become effective until such date as Client’s registration statement on Form S-1 (Registration No. 333-288318), originally filed with the Securities and Exchange Commission (“SEC”) on June 25, 2025, as amended, shall
have been declared effective by the SEC by the filing of a Notice of Effectiveness on the SEC’s EDGAR system (the “Effective Date”). Accordingly, no rights, remedies, duties, obligations or liabilities shall arise hereunder until on and after
the Effective Date.
| 2. |
Prime Broker Services & the Coinbase Entities
|
Each of Coinbase Custody Trust Company, LLC (“Coinbase Custody”), Coinbase, and, as applicable based on Client’s election of additional services from time to time, Coinbase
Credit, Inc. (“Coinbase Credit,” and collectively with Coinbase and Coinbase Custody, the “Coinbase Entities”) shall administer specified Prime Broker Services. Client and each Coinbase Entity may also be referred to individually
as a “Party”; and Client and the Coinbase Entities (collectively or specific entities together, as applicable) may collectively be referred to as the “Parties”. The Prime Broker Services made available to Client are subject to and made
on these General Terms and each
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applicable legal agreement that Client enters into with each relevant Coinbase Entity (including each legal agreement as contemplated in Section 3 of this Coinbase Prime Broker
Agreement). In particular, execution of these General Terms by Client and by Coinbase on behalf of itself and Coinbase Custody constitutes the relevant Parties’ respective agreement to be bound by the Coinbase Custody Custodial Services Agreement
between Client and Coinbase Custody attached as Exhibit A (“Custody Agreement”) and the Coinbase Master Trading Agreement between Client and Coinbase attached as Exhibit B (the “MTA”), in each case with the same force and effect as
though fully set forth herein. These General Terms, together with all agreements, exhibits, appendices, addenda, policies referenced herein, and supplements attached hereto or referenced herein, shall constitute a single, integrated agreement (the “Coinbase
Prime Broker Agreement”) and shall be interpreted to the extent reasonably necessary to be consistent with each other. The documents that together create the Coinbase Prime Broker Agreement shall not be deemed in conflict based on the fact that
a document is silent on a topic that is affirmatively addressed in another document. In the event of an irreconcilable conflict between these General Terms and any documents that together create the Coinbase Prime Broker Agreement, or between any
such documents, then the document governing the specific relevant Prime Broker Service shall control in respect of such Prime Broker Service. Consult each enclosed or referenced legal agreement for additional information and terms.
| 3. |
Optional Services
|
In addition to the General Terms, the Custody Agreement, and the MTA, the Coinbase Entities and Client may agree to execute agreement(s) for additional Prime Broker Service(s),
including certain over the counter trading, lending, post-trade credit, and other services. In each such case, the additional Prime Broker Service(s) and the agreement(s) related thereto (together with all agreements, exhibits, appendices, addenda,
policies referenced therein, and supplements attached thereto or referenced therein) will form part of the Coinbase Prime Broker Agreement and be subject to these General Terms. To the extent any additional Prime Broker Service is provided by a
Coinbase affiliate that is not a Coinbase Entity, such affiliate shall execute such agreement with Client and shall be deemed a “Coinbase Entity” and a “Party” as defined in these General Terms.
| 4. |
Information Sharing
|
| 4.1 |
By executing this Coinbase Prime Broker Agreement, including any selected optional agreements, Client is establishing a Prime Broker Account, which is a master relationship consisting of accounts with each of (a)
Coinbase; (b) Coinbase Custody; and (c) at Client’s election, Coinbase Credit. By executing this Coinbase Prime Broker Agreement, Client acknowledges that Coinbase (as agent for Coinbase Custody and Coinbase Credit, as applicable) may share
Client’s information with Coinbase Custody and Coinbase Credit, as applicable, in accordance with the Confidentiality provision of these General Terms and as otherwise provided in the Coinbase Privacy Policy, as amended and updated from time
to time at https://www.coinbase.com/legal/privacy or a successor website (the “Coinbase Privacy Policy”), including to facilitate opening and maintaining of Client accounts.
|
| 4.2 |
Client agrees that its use of data made available to it through the Trading Platform’s application programming interface(s), which may include the prices and quantities of orders and transactions executed on the
Trading Platform (collectively “Market Data”), is
|
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subject to the Market Data Terms of Use, as amended and updated from time to time at https://www.coinbase.com/legal/market_data or a successor website.
| 5. |
Anti-Money Laundering Notice
|
Client understands and acknowledges that the Coinbase Entities are, or may in the future become, subject to money laundering statutes, regulations and conventions of the United
States or other international jurisdictions (“AML Laws”), and Client agrees to provide the Coinbase Entities with information for the purpose of conducting due diligence as may be required under such AML Laws. Client agrees that it will
provide the Coinbase Entities with any information required to comply with applicable AML Laws. Client understands, acknowledges and agrees that to the extent required by applicable AML Laws, the Coinbase Entities may provide information, including
Confidential Information, to United States or international government agencies in connection with a request for information relating to such AML Laws.
| 6. |
Bank Secrecy Act Warning
|
| 6.1 |
IMPORTANT INFORMATION ABOUT COMPLIANCE PROCEDURES FOR OPENING A NEW COINBASE PRIME BROKER ACCOUNT:
|
In accordance with government regulations, financial institutions are required to obtain, verify, and record information that identifies each legal entity or
natural person that opens a Prime Broker Account. What this means for Client: When Client opens a Prime Broker Account, Coinbase, on behalf of all the Coinbase Entities, will ask for Client’s name, address,
government issued identification number, and other information that will allow the Coinbase Entities to form a reasonable belief as to the identity of Client and its representatives. Coinbase may also require that Client provide copies of such
documentation.
| 6.2 |
Client agrees to provide true, correct, and complete information in opening its Prime Broker Account and, if any such information becomes inaccurate, incorrect, or obsolete, to promptly notify Coinbase following
Client becoming aware that such information is inaccurate, incorrect, or obsolete and provide updated information. The Coinbase Entities shall not have any liability, obligation, or responsibility for, and Client shall be solely responsible
and liable for, any and all Claims and Losses arising out of or relating to Client’s failure to comply with this Section 6.2.
|
| 7. |
Role of Coinbase Entities
|
By executing this Coinbase Prime Broker Agreement, Client will form legal relationships with each of Coinbase, Coinbase Custody, and Coinbase Credit, as applicable. In the course
of Client’s use of Prime Broker Services offered by Coinbase Custody and Coinbase Credit, Coinbase may act as agent on behalf of Coinbase Entities and Client.
| 8. |
Conflicts of Interest
|
| 8.1 |
Client acknowledges that the Coinbase Entities may have actual or potential conflicts of interest in connection with providing the Prime Broker Services. As a result of these
|
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conflicts, the Coinbase Entities may have an incentive to favor their own interests and the interests of their affiliates over Client’s interests. The Coinbase
Entities have certain policies and procedures in place that are designed to mitigate conflicts, although there is no guarantee that they will be successful in identifying or fully mitigating those conflicts as they arise, and such conflicts may
change over time. A non-exhaustive list of the potential conflicts of interest that may arise between the Coinbase Entities and Client are set forth in this Section 8.
| 8.2 |
Potential Conflicts
|
| (a) |
Orders (as such term is defined in the MTA) may be routed to Coinbase’s exchange platform (i.e., the cryptocurrency exchange operated by Coinbase, Inc.). Orders are
typically executed on the Coinbase exchange against other Coinbase customers, but may in certain instances be executed with Coinbase acting as principal.
|
| (b) |
Coinbase may also execute client trades on trading venues where the identity of the beneficial purchaser or seller is unknown and therefore may inadvertently be a Coinbase client.
|
| (c) |
Coinbase does not engage in front-running, but is aware of Orders or imminent Orders and may execute a trade for its own inventory (or the account of an affiliate) while in possession of that knowledge.
|
| (d) |
Coinbase generally acts in an agency capacity for purposes of Orders, but may also act in a principal capacity with respect to certain Orders (e.g., to fill residual Order
size when a portion of an Order may be below the minimum size accepted by the Connected Trading Venues (as defined in the MTA)).
|
| 8.3 |
Variation in Compensation. The Coinbase Entities may charge different clients different prices for the Prime Broker Services, which may cause the Coinbase
Entities to favor certain clients over others.
|
| 9. |
Client
|
| 9.1 |
Client is the legal owner of the Custodial Account and the Trading Account, Trading Balance and Vault Balance (as each such term is defined in the MTA). The singular of Client where appropriate shall include the
plural and may also refer to any such person or legal entity that owns a legal or beneficial interest in the Custodial Account, Trading Account, Trading Balance and Vault Balance.
|
| 9.2 |
Client may be (a) a legal entity or (b) a natural person over 18 years of age who has the full legal capacity to enter into this Coinbase Prime Broker Agreement and will use the Prime Broker Services solely for
commercial, business purposes and not for personal, family, or household purposes.
|
| 9.3 |
To the extent Client is a natural person, if Coinbase receives legal documentation confirming Client’s death or other information leading Coinbase to believe Client is deceased, Coinbase will freeze Client’s Prime
Broker Account (“Freeze Period”). During
|
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the Freeze Period, no transactions may be completed until: (i) Client’s designated fiduciary has opened a new Prime Broker Account, as further described below,
and the entirety of Client’s Prime Broker Account has been transferred to such new Prime Broker Account, or (ii) Client has received proof in a form satisfactory to Coinbase that Client is not deceased. If Coinbase has reason to believe Client is
deceased but Coinbase does not have proof of Client’s death in a form satisfactory to Coinbase, Client authorizes Coinbase to make inquiries, whether directly or through third parties, that Coinbase considers necessary to ascertain whether Client is
deceased. Upon receipt by Coinbase of proof satisfactory to Coinbase that Client is deceased, the fiduciary Client designated in a valid will or similar testamentary document will be required to open a new Prime Broker Account. If Client has not
designated a fiduciary, then Coinbase reserves the right to (i) treat as Client’s fiduciary any person entitled to inherit Client’s Prime Broker Account, as determined by Coinbase upon receipt and review of the documentation Coinbase, in its sole and
absolute discretion, deems necessary or appropriate, including (but not limited to) a will, a living trust or a Small Estate Affidavit, or (ii) require an order designating a fiduciary from a court having competent jurisdiction over Client’s estate.
In the event Coinbase determines, in its sole and absolute discretion, that there is uncertainty regarding the validity of the fiduciary designation, Coinbase reserves the right to require an order resolving such issue from a court of competent
jurisdiction before taking any action relating to Client’s Prime Broker Account. Pursuant to the above, the opening of a new Prime Broker Account by a designated fiduciary is mandatory following the death of Client, and Client hereby agrees that its
fiduciary shall be required to open a new Prime Broker Account and provide required account opening information to gain access to the contents of Client’s Prime Broker Account.
| 10. |
Account Statements
|
Client acknowledges that although it will have multiple and separate underlying accounts with the Coinbase Entities, Client may receive a number of Prime Broker Services through a
single account interface and receive combined statements reflecting Client activity with respect to multiple Coinbase Entities. Client authorizes Coinbase to combine information regarding the separate activities into a single statement. Coinbase will
provide Client with an electronic account statement every quarter, at a minimum. Each account statement will identify the amount of cash and each Digital Asset in Client’s Prime Broker Account at the end of the period and set forth all Prime Broker
Account activity during that period.
| 11. |
Trading Account and Portfolio
|
| 11.1 |
Although only Client shall be associated with the Prime Broker Account, Coinbase shall permit Client to create and maintain multiple portfolios under the Prime Broker Account (each a “Portfolio”), each of
which shall be associated with the Prime Broker Account and belong to Client. Client is permitted to transfer Client Assets (as such term is defined in the MTA) between Portfolios. Each Portfolio will be opened, maintained and operated under
the terms and provisions of this Coinbase Prime Broker Agreement. The creation of separate Portfolios within the Prime Broker Account is for Client’s recordkeeping convenience only. In all other respects, all Portfolios are treated as a
single account unless specifically provided herein or in another exhibit, addendum or supplement to this
|
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Coinbase Prime Broker Agreement.
| 12. |
Authorized Representatives
|
Client shall provide, in writing, the names of the persons and entities with full right, power, authority, and capacity to act on behalf of Client with respect to the Prime Broker
Account, including each Portfolio, unless otherwise indicated in the applicable operational documentation and procedures (each an “Authorized Representative”). Each Authorized Representative will continue in such capacity until such time as
Coinbase receives Instructions from Client that its Authorized Representatives have changed.
| 13. |
Client Instructions
|
| 13.1 |
The Coinbase Entities may act upon written instructions received from Client (if Client is a natural person) or Client’s Authorized Representatives (“Instructions”). When taking action upon Instructions, the
applicable Coinbase Entity shall act in a reasonable manner, and in conformance with the following: (a) Instructions shall continue in full force and effect until cancelled or superseded by subsequent Instructions (except in respect of
Instructions executed by a Coinbase Entity, which can no longer be cancelled); (b) if any Instructions are ambiguous, the applicable Coinbase Entity shall refuse to execute such Instructions, promptly provide notice to Client of such refusal,
and shall not execute such Instructions until any such ambiguity has been resolved to the Coinbase Entity’s reasonable satisfaction; (c) the Coinbase Entities may refuse to execute Instructions if in the applicable Coinbase Entity’s
reasonable opinion such Instructions are outside the scope of its obligations under this Coinbase Prime Broker Agreement or are contrary to any applicable laws, rules and regulations (whether arising from any governmental authority or self-
regulatory organization); and (d) each Coinbase Entity may rely, in the performance of its duties under this Coinbase Prime Broker Agreement and without any liability, obligation, or responsibility whatsoever on its part, upon any
Instructions given by Client’s Authorized Representatives (or otherwise to have been given on Client’s behalf) and upon any notice, request, consent, certificate or other instrument signed or furnished by Client or any of Client’s Authorized
Representatives. Client is responsible for losses resulting from inaccurate Instructions. The applicable Coinbase Entity is responsible for losses resulting from its errors in executing a Client Instruction.
|
| 13.2 |
Coinbase will comply with Client’s Instructions to stake, stack or vote Client’s Digital Assets to the extent Coinbase or the applicable Coinbase Entity supports proof of stake validation, proof of transfer
validation, or voting for such Digital Assets. The Coinbase Entities may, in their sole discretion, decide whether or not to support (or cease supporting) staking services or stacking or voting for a Digital Asset. For further information
about any specific terms and fees applicable to staking or stacking services or voting, please consult the applicable agreements provided to you by Coinbase.
|
| 14. |
Representations, Warranties, and Additional Covenants
|
In addition to the obligations arising under this Coinbase Prime Broker Agreement and as a condition of and in consideration of Client accessing and using the Prime Broker
Services, Client
Page 7 of 54
represents, warrants, and covenants that:
| 14.1 |
Client operates in compliance in all material respects with (A) all applicable laws, rules, and regulations, including applicable U.S. securities laws and regulations and any applicable state and federal laws, in
each jurisdiction in which Client operates, the non- compliance with which would adversely effect Client’s use of the Prime Broker Account or Prime Broker Services or Client’s performance of its obligations under this Coinbase Prime Broker
Agreement and (B) applicable AML Laws, USA PATRIOT Act and Bank Secrecy Act requirements, applicable governmental sanctions and other applicable anti- terrorism statutes, regulations, and conventions of the United States or other
international jurisdictions, including but not limited to those implemented by the U.S. Department of Treasury’s Office of Foreign Assets Control. Client further understands and agrees that any fines or penalties imposed on the Coinbase
Entities as a direct result of a violation by Client of any applicable securities regulation or law may, at the relevant Coinbase Entity’s reasonable discretion, be passed on to Client and Client acknowledges and represents that Client will
be fully liable and responsible for payment to the Coinbase Entity of such fines or penalties, provided that Client shall be given prior notice of any such fines or penalties and will, to the extent permitted by law and Coinbase’s policies
and procedures, be permitted to intercede at its own expense;
|
| 14.2 |
To the extent applicable to Client’s business and activities, Client is currently registered with or a member in good standing of all relevant governmental, regulatory, self-regulatory and supervisory agencies,
departments and bodies in all relevant jurisdictions in which Client does business, including, to the extent applicable, the Financial Industry Regulatory Authority, the Municipal Securities Rulemaking Board, the Securities Investor
Protection Corporation, the National Futures Association, the Commodity Futures Trading Commission and the Securities and Exchange Commission, and Client will promptly notify Coinbase if Client ceases to be registered with or a member in good
standing of any such authority;
|
| 14.3 |
Client will promptly provide information as the Coinbase Entities may reasonably request from time to time regarding any transaction relating to the use of the Prime Broker Services, to the extent necessary to
comply with any applicable laws, rules, and regulations, or the guidance or direction of, or request from, any regulatory authority or financial institution; provided that Client may redact such information or remove Confidential Information
not relevant to the requirements of this Coinbase Prime Broker Agreement;
|
| 14.4 |
Client’s use of the Prime Broker Services is limited to business activities disclosed in the due diligence information submitted to Coinbase, and will not include any personal, family or household purposes. Client
will promptly notify Coinbase in writing in the event it intends to use the Prime Broker Services in connection with any business activities not previously disclosed to Coinbase. Coinbase may, in its sole discretion, prohibit Client from
using the Prime Broker Services in connection with any new business activities not previously disclosed;
|
| 14.5 |
Client has the full right, power, authority, and capacity to transact with all Digital Assets involved in the provision of Prime Broker Services to Client;
|
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| 14.6 |
Client’s Authorized Representatives have the (a) full right, power, authority, and capacity, to access and use the Prime Broker Services, and (b) appropriate training, sophistication, expertise, and knowledge
necessary to understand the nature and risks, and make informed decisions, in respect of Digital Assets and the Prime Broker Services;
|
| 14.7 |
Client is not a resident in nor organized under the laws of any country with which transactions or dealings are prohibited by governmental sanctions imposed by the U.S., the United Nations, the European Union, the
United Kingdom, or any other applicable jurisdiction (collectively, “Sanctions Regimes”), nor is it (to the best of its knowledge, with the understanding that Client is an exchange-traded fund) owned or controlled by a person, entity
or government prohibited under an applicable Sanctions Regime;
|
| 14.8 |
It has implemented and maintains an AML and sanctions program that is reasonably designed to comply with applicable AML, anti-terrorist, anti-bribery/corruption, and Sanctions Regime laws and regulations,
including, but not limited to, the Bank Secrecy Act, as amended by the USA PATRIOT Act (collectively, “AML and Sanctions Laws and Regulations”). Said program includes policies and procedures designed to promote and achieve
compliance by Client with AML and Sanctions Laws and Regulations, including: (a) a due diligence program designed to identify and verify the identities of Client’s “authorized participants” (“Authorized Participants”); [(b) enhanced due
diligence on high-risk customers, including but not limited to customers designated as politically exposed persons or residing in high-risk jurisdictions;] (c) processes to conduct ongoing monitoring of Authorized Participant transactional
activity and report any activity deemed to be suspicious; (d) ongoing Authorized Participant sanctions screening against applicable Sanctions Regimes lists; and (e) processes to maintain records related to the above controls as required by
law;
|
| 14.9 |
Client does not maintain any asset in the Prime Broker Account which is derived from any unlawful activity and it will not instruct or otherwise cause Coinbase to hold any assets or engage in any transaction that
would cause Coinbase to violate applicable laws and regulations, including applicable AML and Sanctions Laws and Regulations; and
|
| 14.10 |
By executing this Coinbase Prime Broker Agreement, Client further provides written consent to allow the Coinbase Entities to request and obtain any and all beneficial owner information regarding the Client that is
maintained on any national beneficial ownership registry, including, but not limited to, the Beneficial Ownership Information Registry maintained by the U.S. Financial Crimes Enforcement Network (“FinCEN”), in order to assist the
Coinbase Entities in complying with their anti-money laundering and customer due diligence obligations, with the understanding that the Coinbase Entities will only use such information for those purposes and will maintain the information
pursuant to the confidentiality provisions of this Coinbase Prime Broker Agreement.
|
Coinbase, on behalf of itself and each other Coinbase Entity, represents, warrants, and covenants that:
| 14.11 |
It possesses and will maintain, all licenses, registrations, authorizations and approvals required by any government agency, regulatory authority, or other party for it to operate
|
Page 9 of 54
its business and provide or use, as applicable, the Prime Broker Services;
| 14.12 |
Its performance under this Coinbase Prime Broker Agreement will not breach (a) any agreement between it and a third party; (b) any obligation of confidentiality regarding the proprietary information of a third
party; or (c) any applicable law, rule or regulation applicable to such Coinbase Entity in any material respect;
|
| 14.13 |
It has the full right, power, authority, and capacity to enter into and be bound by this Coinbase Prime Broker Agreement, and the person executing or otherwise accepting this Coinbase Prime Broker Agreement on its
behalf has full legal right, power, authority, and capacity to do so;
|
| 14.14 |
This Coinbase Prime Broker Agreement is its legal, valid and binding obligation, enforceable against it in accordance with its terms; and
|
| 14.15 |
It will not make any public statement, including any press release, media release, or blog post which mentions or refers to Client or a partnership between it and Client, without the prior written consent of
Client.
|
| 15. |
No Investment Advice or Brokerage
|
| 15.1 |
Client assumes full responsibility for the investment decision making for each and every transaction Client directs in or for its Prime Broker Account. Client understands and agrees that the Coinbase Entities (as
defined herein) are not an SEC/FINRA registered broker- dealer, or an investment adviser to Client in any respect, and the Coinbase Entities have no liability, obligation, or responsibility whatsoever for Client investment decision making
relating to the Prime Broker Services. Client should consult its legal, tax, and accounting professionals regarding Client’s specific situation.
|
| 15.2 |
While the Coinbase Entities may make certain general information available to Client, the Coinbase Entities do not provide Client with any investment, legal, tax or accounting advice. Client further acknowledges
that Client is solely responsible for making all investment decision making relating to the Prime Broker Services and that Client shall not rely on the Coinbase Entities in making an investment or any other decision, including with regard to
the suitability or value of any Digital Assets or the tax consequences of any such decision, and that the Coinbase Entities shall have no liability, obligation, or responsibility whatsoever regarding any transaction with respect to a Digital
Asset through the Prime Broker Services, other than with respect to their respective duties and obligations hereunder. The Coinbase Entities do not make investment decisions for, nor do they exercise any investment discretion over, the Prime
Broker Account. All investment decisions relating to the Prime Broker Account are based on Client’s Instructions and Client is solely responsible for determining whether any investment, investment strategy, or transaction involving Digital
Assets is appropriate for Client based on Client’s investment objectives, financial circumstances, and risk tolerance.
|
| 16. |
Opt-In to Article 8 of the Uniform Commercial Code
|
| 16.1 |
Coinbase and Coinbase Custody are each a “securities intermediary” as that term is defined
|
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in Article 8 of the Uniform Commercial Code (“UCC”) as enacted in the State of New York (“Article 8”) because in the ordinary course of its
business it maintains securities accounts for others. Coinbase is acting as a securities intermediary when it creates Client’s Trading Balance and holds Client Assets in Client’s Trading Balance. Coinbase Custody is acting as securities intermediary
when it creates Client’s Vault Balance and holds Client Assets in Client’s Vault Balance. Although they hold only Client Assets and not securities, the Trading Balance and Vault Balance are each a “securities account” under Article 8, and Client is
the “entitlement holder” of the securities account under Article 8. Client agrees with Coinbase and Coinbase Custody that Client Assets in the Trading Balance and Vault Balance will be treated as “financial assets” under Article 8. Coinbase and
Coinbase Custody are obligated by Article 8 to maintain sufficient cash and Digital Assets to satisfy all entitlements of clients of Coinbase and Coinbase Custody, as applicable, to such cash and Digital Assets. Coinbase and Coinbase Custody may not
grant a security interest in the Client Assets in Client’s Trading Balance or Vault Balance to any third party except, to the extent expressly permitted under this Coinbase Prime Broker Agreement or any other executed agreement between the Parties,
to any Coinbase Entity or any affiliate thereof. Client Assets in the Trading Balance and Vault Balance are custodial assets. Under Article 8, the Client Assets in the Trading Balance and Vault Balance are not general assets of Coinbase or Coinbase
Custody, as applicable, and are not available to satisfy claims of creditors of Coinbase and Coinbase Custody, as applicable. The treatment of Client Assets in the Trading Balance and Vault Balance as financial assets under Article 8 does not
determine the characterization or treatment of the cash and Digital Assets under any other law or rule.
| 16.2 |
All property credited to Client’s Trading Balance and Vault Balance will be treated as a financial asset within the meaning of Article 8 of the UCC. Coinbase and Coinbase Custody will credit Client with any
payments or distributions on any Client Assets it holds for Client’s Trading Balance and Vault Balance. Coinbase and Coinbase Custody, as applicable, will comply with Client’s directions with respect to any Client Assets credited to Client’s
Trading Balance or Vault Balance, as applicable. Coinbase and Coinbase Custody will comply with Client’s Instructions to transfer Client Assets in Client’s Trading Balance and Vault Balance subject to the terms of the MTA or Custody
Agreement, as applicable, including the Coinbase Trading Rules (as such term is defined in the MTA), and other Coinbase rules. New York will be the securities intermediary’s jurisdiction with respect to Coinbase and Coinbase Custody, and New
York law will govern all issues addressed in Article 2(1) of the Hague Securities Convention.
|
| 16.3 |
This Coinbase Prime Broker Agreement describes the entire agreement among the Parties hereto with respect to Article 8 of the applicable Uniform Commercial Code and sets forth the way in which the Coinbase Entities
will satisfy their Article 8 duties.
|
| 17. |
General Use; Prohibited Use
|
| 17.1 |
Prime Broker Site and Content. During the term of this Coinbase Prime Broker Agreement, Coinbase, on behalf of the Coinbase Entities, hereby grants Client a limited,
nonexclusive, non-transferable, non-sublicensable, revocable, and royalty-free license, subject to the terms of this Coinbase Prime Broker Agreement, to access and use the Coinbase Prime
|
Page 11 of 54
Broker Site accessible at prime.coinbase.com (“Coinbase Prime Broker Site”) and related content, materials, and information (collectively, the “Content”)
solely for Client’s internal business use and other purposes as permitted by Coinbase in writing from time to time. Any other use of the Coinbase Prime Broker Site or Content is expressly prohibited. All other right, title, and interest (including
all copyright, trademark, patent, trade secrets, and all other intellectual property rights) in the Coinbase Prime Broker Site, Content, and Prime Broker Services is and will remain the exclusive property of the Coinbase Entities and their licensors.
Client shall not copy, transmit, distribute, sell, license, reverse engineer, modify, publish, or participate in the transfer or sale of, create derivative works from, or in any other way exploit any of the Prime Broker Services or Content, in whole
or in part. “Coinbase,” “Coinbase Prime,” “prime.coinbase.com,” and all logos related to the Prime Broker Services or displayed on the Coinbase Prime Broker Site are either trademarks or registered marks of the Coinbase Entities or their licensors.
Client may not copy, imitate or use them without Coinbase’s prior written consent. The license granted under this Section 17.1 will automatically terminate upon termination of this Coinbase Prime Broker Agreement, or the suspension or termination of
Client’s access to the Coinbase Prime Broker Site or Prime Broker Services.
| 17.2 |
Website Accuracy. Although the Coinbase Entities intend to provide accurate and timely information on the Coinbase Prime Broker Site, the Coinbase Prime Broker Site
(including the Content) may not always be entirely accurate, complete, or current and may also include technical inaccuracies or typographical errors. In an effort to continue to provide Client with as complete and accurate information as
possible, information may be changed or updated from time to time without notice, including information regarding Prime Broker Services policies, products and services. Accordingly, Client should verify all information before relying on it,
and all decisions based on information contained on the Coinbase Prime Broker Site are Client’s sole responsibility, and the Coinbase Entities shall have no liability, obligation, or responsibility whatsoever for such decisions. Links to
third party materials (including websites) may be provided as a convenience but are not controlled by the Coinbase Entities. The Coinbase Entities are not responsible for any aspect of the information, content, or services contained in any
third party materials or on any third party sites accessible from or linked to the Coinbase Prime Broker Site.
|
| 17.3 |
Unauthorized Users. Client shall not permit any person or entity that is not an Authorized Representative (each, an “Unauthorized User”) to access, connect to,
and/or use Client’s Prime Broker Account in any way, including through the Coinbase Prime Broker Site or through any third party product or service. Except to the extent caused by a Coinbase Entity’s negligence, bad faith, fraud or willful
misconduct, the Coinbase Entities shall have no liability, obligation, or responsibility whatsoever for, and Client shall be solely responsible and liable for, any and all Claims and Losses arising out of or relating to the acts and omissions
of any Unauthorized User in respect of the Prime Broker Services, Prime Broker Account, and/or the Prime Broker Site. Client must notify the relevant Coinbase Entity immediately if Client believes or becomes aware that an Unauthorized User
has accessed, connected to, or used Client’s Prime Broker Account.
|
| 17.4 |
Prohibited Use. Client represents and warrants that Client will not use the Prime Broker Services or Prime Broker Account for any illegal activity, including illegal
gambling,
|
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money laundering, fraud, blackmail, extortion, ransoming data, the financing of terrorism, other violent activities or any prohibited market practices, including
activities and business set forth in Appendix 1.
| 17.5 |
Password Security; Contact Information. Client is solely responsible for maintaining adequate security and control of any and all IDs, passwords, hints, personal
identification numbers (PINs), API keys, YubiKeys, other security or confirmation information or hardware, and any other codes that Client uses to access the Prime Broker Account and Prime Broker Services. Any loss or compromise of the
foregoing information and/or Client’s personal information may result in unauthorized access to Client’s Prime Broker Account by third parties and the loss (including theft) of any of Client’s Digital Assets. Client agrees to keep Client’s
email address and telephone number up to date in Client’s Prime Broker Account in order to receive any notices or alerts that the Coinbase Entities may send to Client. Client shall be solely responsible for any Losses that Client may sustain
due to compromise of Prime Broker Account login credentials that are caused by or attributable to Client’s failure to maintain the security and control of such credentials. In the event Client believes Client’s Prime Broker Account
information has been compromised, Client must contact Coinbase immediately.
|
| 18. |
Taxes
|
| 18.1 |
Taxes. It is Client’s sole responsibility to determine whether, and to what extent, any present and future tariffs, duties, or taxes (including federal, state and local
income taxes, use taxes, value added taxes, withholding taxes, transfer taxes, stamp taxes, documentary taxes, personal property taxes and all similar costs) imposed or levied by any government or governmental agency (collectively, “Taxes”)
apply to any transactions, deposits or withdrawals Client conducts through the Prime Broker Services. Except as otherwise expressly stated herein, Client acknowledges that the Coinbase Entities shall have no liability, obligation, or
responsibility whatsoever for the accounting or reporting of income or other Taxes with respect to the execution, delivery, or performance of this Coinbase Prime Broker Agreement, each related agreement, and each transaction in respect of any
account hereunder or thereunder (for the sake of clarity, including with respect to any related margin lending agreement, post-trade settlement agreement and each related transaction), including unrelated business taxable income under Section
514 of the U.S. Internal Revenue Code of 1986, as amended (the “Code) or effectively connected income of a U.S. trade or business under Section 864(b) of the Code. Client shall be solely responsible for the payment of any and all Taxes
and related penalties, interests and costs arising from or relating to such transactions in any such account and Client shall file all tax returns, reports, and disclosures required by applicable law. Client represents and warrants that
Client has in place policies and procedures necessary to ensure proper accounting and reporting of any and all taxation of Client, and any and all payment of Taxes by Client, in connection with the transactions.
|
| 18.2 |
Withholding Tax. Except as required by applicable law, each payment under this Coinbase Prime Broker Agreement or collateral deliverable by Client to any Coinbase Entities
shall be made, and the value of any collateral or margin shall be calculated, without withholding or deducting any Taxes. If any Taxes are required to be withheld or deducted, Client (a)
|
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authorizes the Coinbase Entities to effect such withholding or deduction and remit such Taxes to the relevant taxing authorities and (b) shall pay such
additional amounts or deliver such further collateral as necessary to ensure that the actual net amount received by the Coinbase Entities is equal to the amount that the Coinbase Entities would have received had no such withholding or deduction been
required.
| 18.3 |
Account Tax Documentation. Client will provide the Coinbase Entities with any tax forms or documentation reasonably requested by the Coinbase Entities (“Account Tax Documentation”),
including a duly completed IRS Form W-9 or applicable IRS Form W- 8 (both available at www.irs.gov). Client represents and warrants that such Account Tax Documentation is true, correct and complete. If any such Account Tax Documentation
becomes inaccurate, incorrect or obsolete, Client will promptly notify the Coinbase Entities and promptly provide updated Account Tax Documentation. Client understands that the Coinbase Entities may disclose any information with respect to
Client Assets, the Prime Broker Account, Custodial Accounts, Trading Accounts, and transactions required by any applicable taxing authority or other governmental entity.
|
| 18.4 |
The Coinbase Entities shall have no liability, obligation, or responsibility whatsoever for, and Client shall be solely responsible and liable for, any and all Claims and Losses arising out of or relating to Taxes
imposed on Client’s assets, cash, other property, or any income or gain derived therefrom.
|
| 19. |
Prime Broker Services Fees
|
| 19.1 |
Client agrees to pay all commissions and fees in connection with the Orders and Prime Broker Services on a timely basis as set forth in the Fee Schedule attached as Appendix 3 and any associated pass-through fees
(collectively, “Fees”). Client authorizes the Coinbase Entities to satisfy such Fees by deducting the amount thereof from the Vault Balance or Trading Balance, as applicable.
|
| 19.2 |
Subject to the Fee Schedule, Client acknowledges that Coinbase’s fees may include but are not limited to: (a) bank wire fees to deposit and/or withdraw Client Cash; (b) fees in connection with internal transfers
from its Vault Balance to its Trading Balance; and (c) fees in connection with external withdrawals of Client Assets. Client further acknowledges that Coinbase Custody will charge fees for any balance of Digital Assets that Client keeps in
the Vault Balance. Client acknowledges that certain clients may have a different pricing structure.
|
| 19.3 |
Client acknowledges that it is solely responsible for ensuring knowledge of applicable fees prior to use of the Prime Broker Services.
|
| 20. |
Confidentiality
|
| 20.1 |
Client and Coinbase on behalf of itself and the Coinbase Entities each agree that the recipient of any non-public, confidential or proprietary information of the other Party including the existence and terms of
this Coinbase Prime Broker Agreement and information relating to the other party’s business operations or business relationships or pursuant to this Coinbase Prime Broker Agreement, including the Coinbase Entities’ fees
|
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(collectively “Confidential Information”) (a) will not disclose such Confidential Information except to such party’s affiliates and its and their
officers, directors, agents, employees, consultants, contractors and professional advisors who need to know the Confidential Information for the purpose of using, carrying out, or receiving the Prime Broker Services or assisting in the performance of
this Coinbase Prime Broker Agreement and who are informed of the confidentiality obligations set forth in this Section 20 and are bound by such obligations of confidentiality or reasonably similar obligations of confidentiality (“Representatives”);
and (b) will protect such Confidential Information from unauthorized use and disclosure. Each Party and its Representatives shall use any Confidential Information that it receives pursuant to or in connection with this Coinbase Prime Broker Agreement
solely for purposes of (i) providing or using the Prime Broker Services; (ii) exercising a Party’s rights and performing a Party’s obligations under the Coinbase Prime Broker Agreement; and (iii) complying with any applicable laws, rules and
regulations; provided that, in addition, the Coinbase Entities may use Confidential Information of Client for (1) risk management; (2) to develop and enhance their products and services; and (3) as set forth in Section 4 of this Coinbase Prime Broker
Agreement. Confidential Information shall not include any: (w) information that is or becomes generally publicly available through no fault of the recipient or its Representatives; (x) information that the recipient or its Representatives obtains
from a third party (other than in connection with this Coinbase Prime Broker Agreement) that, to the recipient’s best knowledge, is not bound by a duty or obligation of confidentiality prohibiting such disclosure; (y) information that is
independently developed by the recipient or its Representatives without the use of Confidential Information provided by the disclosing party; or (z) information disclosed with the prior written consent of the disclosing party.
| 20.2 |
Notwithstanding the foregoing, each Party may disclose Confidential Information of the other Party to the extent required by a court of competent jurisdiction or governmental authority or otherwise as required by
law; provided, however, the Party making such required disclosure shall first notify the other Party (to the extent legally permissible) and shall afford the other Party a reasonable opportunity to seek confidential treatment if it wishes to
do so and will consider in good faith reasonable and timely requests for redaction. All documents and other tangible objects containing or representing Confidential Information and all copies or extracts thereof or notes derived therefrom
that are in the possession or control of the receiving party or its Representatives shall be and remain the property of the disclosing party and shall be promptly returned to the disclosing party or destroyed, each upon the disclosing party’s
request; provided, however, notwithstanding the foregoing, the receiving party (a) may retain one (1) copy of Confidential Information if required by law or regulation; or (b) may retain Confidential Information pursuant to an established
document retention policy; provided, further, that in either case, any Confidential Information so retained shall remain subject to the confidentiality obligations of this Coinbase Prime Broker Agreement.
|
| 21. |
Recording of Conversations
|
For compliance and monitoring purposes, Client is aware that each Coinbase Entity may record conversations at its sole discretion between such Coinbase Entity and Client or its
Authorized Representatives relating to this Coinbase Prime Broker Agreement, the Prime Broker Account and
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the Prime Broker Services. Client and its Authorized Representatives have no objection and hereby agree to such recording. Client acknowledges that such recordings will not be made
available to it at any time, except to the extent required by law or legal process.
| 22. |
Security
|
The Coinbase Entities have implemented and will maintain a reasonable information security program that includes policies and procedures that are reasonably designed to safeguard
the Coinbase Entities’ electronic systems and Client’s Confidential Information from, among other things, unauthorized access or misuse. In the event of a Data Security Incident (defined below), the applicable Coinbase Entity shall promptly notify
Client and such notice shall include the following information: (a) the timing and nature of the Data Security Incident; (b) the information related to Client that was compromised, including the names of any individual acting on Client’s behalf in
his or her corporate capacity whose personal information was compromised; (c) when the Data Security Incident was discovered; and (d) remedial actions that have been taken and that the applicable Coinbase Entity plans to take. “Data Security
Incident” is defined as an incident whereby (i) an unauthorized person (whether within a Coinbase Entity or a third party) acquired or accessed Client’s Confidential Information; or (ii) Client’s Confidential Information is otherwise lost,
stolen, or compromised, each case, while in the possession or control of the Coinbase Entities.
| 23. |
Acknowledgement of Risks
|
Coinbase hereby notifies Client, and Client hereby acknowledges, that:
| 23.1 |
Digital Assets are not legal tender, are not backed by the government, and are not subject to protections afforded by the Federal Deposit Insurance Corporation or Securities Investor Protection Corporation
protections;
|
| 23.2 |
Legislative and regulatory changes or actions at the state, federal, or international level may adversely affect the use, transfer, exchange, and/or value of Digital Assets;
|
| 23.3 |
Transactions in Digital Assets may be irreversible, and, accordingly, Digital Assets lost due to fraudulent or accidental transactions may not be recoverable;
|
| 23.4 |
Some Digital Assets transactions shall be deemed to be made when recorded on a public blockchain ledger, which is not necessarily the date or time that Client initiates the transaction;
|
| 23.5 |
The value of Digital Assets may be derived from the continued willingness of market participants to exchange any government issued currency (“Fiat Currency”) for Digital Assets, which may result in the
potential for permanent and total loss of value of a particular Digital Asset should the market for that Digital Asset disappear;
|
| 23.6 |
There is no assurance that a person who accepts a Digital Asset as payment today will continue to do so in the future;
|
| 23.7 |
The volatility and unpredictability of the price of Digital Assets relative to Fiat Currency
|
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may result in significant loss over a short period of time;
| 23.8 |
The nature of Digital Assets may lead to an increased risk of fraud or cyber-attack;
|
| 23.9 |
The nature of Digital Assets means that any technological difficulties experienced by a Coinbase Entity may prevent the access or use of Client’s Digital Assets; and
|
| 23.10 |
Any bond or trust account maintained by Coinbase Entities for the benefit of its customers may not be sufficient to cover all losses (including Losses) incurred by customers.
|
| 24. |
ERISA
|
| 24.1 |
Client represents and warrants that at all times the assets used to consummate the transactions hereunder (hereinafter referred to as “ERISA Transactions for purposes of this Section 24 and Section 25) do
not, and shall not, constitute the assets of (i) an “employee benefit plan” that is subject to Part 4, Subtitle B, Title I of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”); (ii) a “plan” within the meaning
of Section 4975 of the Internal Revenue Code of 1986, as amended (the “Code”), that is subject to Section 4975 of the Code; or (iii) a person or entity the underlying assets of which are deemed to include plan assets as determined
under Section 3(42) of ERISA and the regulations thereunder, and Client will notify Coinbase (1) if Client is aware in advance that it will breach the foregoing representation and warranty (the “Representation”), reasonably in advance
of it breaching the Representation; or (2) promptly upon becoming aware that it is in breach of the Representation. If Client provides such notice or if Coinbase is aware that Client is in breach or will be in breach of the Representation,
upon a Coinbase Entity’s written request, Client will terminate any or all transactions under this Coinbase Prime Broker Agreement (x) if Client gave advance notice that it would breach the Representation, prior to breaching the
Representation (unless Client avoids the occurrence of such breach); (y) if Client gave no notice but Coinbase is aware that Client will be in breach of the Representation, prior to breaching the Representation (unless Client avoids the
occurrence of such breach); or (z) if Client is in breach of the Representation, immediately.
|
| 24.2 |
Client acknowledges that Coinbase is entering into this Coinbase Prime Broker Agreement and each ERISA Transaction based on the representations, warranties, covenants and agreements in this Coinbase Prime Broker
Agreement and specifically this Section 24.
|
| 24.3 |
Without prejudice to or any limitation on the rights and obligations set forth in this Coinbase Prime Broker Agreement, the Coinbase Entities shall have no liability, obligation, or responsibility whatsoever for,
and Client, to the extent permitted by law, is solely responsible and liable for, any and all Claims and Losses arising out of or relating to any of the representations, warranties, covenants or agreements in this Section 24, being or
becoming untrue.
|
| 25. |
Other Plans
|
The assets used to consummate the ERISA Transactions provided hereunder do not, and shall not, constitute the assets of a governmental plan that is subject to any federal, state or
local law that is
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substantially similar to the provisions of Section 406 of ERISA or Section 4975 of the Code.
| 26. |
Operation of Digital Asset Protocols
|
| 26.1 |
The Coinbase Entities do not own or control the underlying software protocols which govern the operation of Digital Assets involved in connection with the Prime Broker Services. In general, the underlying protocols
are open source and anyone can use, copy, modify, and distribute them. By using the Prime Broker Services, Client acknowledges and agrees (i) that the Coinbase Entities make no guarantee of the functionality, security, or availability of
underlying protocols; (ii) that some underlying protocols are subject to consensus-based proof of stake validation methods which may allow, by virtue of their governance systems, changes to the associated blockchain or digital ledger (“Governance Modifiable
Blockchains”), and that any transactions made by or on behalf of Client validated on such Governance Modifiable Blockchains may be affected accordingly; and (iii) that the underlying protocols are subject to sudden changes in operating
rules (a/k/a “forks”), and that such forks may materially affect the value, function, and/or even the name of the Digital Assets involved in the provision of Prime Broker Services to Client. In the event of a fork, Client agrees that the
Coinbase Entities may temporarily suspend Prime Broker Services (and shall notify Client of such suspension where possible) and that the Coinbase Entities may, in their sole but reasonable, good faith discretion, decide whether or not to
support (or cease supporting) either branch of the forked protocol entirely. Client acknowledges and agrees that the Coinbase Entities shall have no liability, obligation or responsibility whatsoever arising out of or relating to the
operation of underlying software protocols, transactions affected by Governance Modifiable Blockchains, or an unsupported branch of a forked protocol that the Coinbase Entities decide reasonably and in good faith not to support, except as the
result of a Coinbase Entity’s negligence, bad faith, fraud or willful misconduct, and, accordingly, Client acknowledges and assumes the risk of the same (other than the risk of a Coinbase Entity’s negligence, bad faith, fraud or willful
misconduct).
|
| 26.2 |
Unless specifically communicated by the Coinbase Entities through an official public statement on the Coinbase website, the Coinbase Entities do not support airdrops, metacoins, colored coins, side chains, or other
derivative, enhanced, or forked protocols, tokens, or coins which supplement or interact with a Digital Asset (collectively, “Advanced Protocols”) in connection with the Prime Broker Services. Client shall not use Client’s Prime
Broker Account to attempt to receive, request, send, store, or engage in any other type of transaction involving an Advanced Protocol. The Prime Broker Services are not configured to detect, process, and/or secure Advanced Protocol
transactions and neither Client nor the Coinbase Entities will be able to retrieve any unsupported Advanced Protocol. Coinbase shall have no liability, obligation, or responsibility whatsoever in respect to Advanced Protocols.
|
| 27. |
Set-off
|
If any of the following events or conditions occur with respect to Client: (i) Client (x) fails to make, when due, any payment or delivery required under the Coinbase Prime Broker
Agreement (including any payment or delivery of collateral or margin but excluding any Fees) and fails to
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remedy such failure within twenty-four (24) hours following written notice of such failure from Coinbase or (y) fails to make, when due, any payment of Fees and fails to remedy
such failure within two (2) Business Days following written notice of such failure from Coinbase (unless the relevant Coinbase Entity satisfies such Fees by deducting the amount thereof from the Vault Balance or Trading Balance, as applicable); (ii)
any representation or warranty made by Client in connection with the Coinbase Prime Broker Agreement or the Prime Broker Services is breached or is not or ceases to be accurate and complete, in each case in any material respect; (iii) either (A) a
case in bankruptcy is commenced or a proceeding under any insolvency or other law for the protection of creditors or for the appointment of a receiver, trustee or similar officer is filed against Client and such case or proceeding is not stayed or
dismissed within fifteen (15) days or (B) Client is insolvent or a case in bankruptcy is commenced or a proceeding under any insolvency or other law for the protection of creditors or for the appointment of a receiver, trustee or similar officer is
filed by Client, or Client makes or proposes to make any arrangement for the benefit of its creditors, or Client or any of its property is subject to any agreement, order or judgment providing for Client’s dissolution, liquidation or reorganization,
or for the appointment of a receiver, trustee or similar officer of Client or such property; (iv) Client is dissolved or in any other way terminated; (v) Client breaches any other obligation or covenant to a Coinbase Entity under the Coinbase Prime
Broker Agreement and, to the extent capable of remedy, such breach is not cured within five (5) Business Days following written notice of such breach from Coinbase to Client; (vi) this Coinbase Prime Broker Agreement is terminated for Cause (as
defined below) and Client’s obligations to each Coinbase Entity have not been fully satisfied; (vii) Client fails to timely settle an executed OTC Order in accordance with its settlement terms and fails to remedy such failure within twenty- four (24)
hours following written notice of such failure from Coinbase; or (viii) a default, event of default, termination event or other similar condition or event occurs in respect of Client under any agreement with a Coinbase Entity or any affiliate of a
Coinbase entity (other than the Coinbase Prime Broker Agreement), after giving effect to any applicable notice requirement or grace period that may apply under such agreement, resulting in the liquidation of, acceleration of obligations under or
early termination of all transactions governed under such agreement (each, a “Default”), then each Coinbase Entity may, in its sole discretion, set off and otherwise apply any and all of the obligations of any and all Coinbase Entities then
due to Client against any and all obligations of Client then due to any Coinbase Entities (whether matured or unmatured, fixed or contingent, or liquidated or unliquidated). Without limiting the generality of the foregoing, upon the occurrence and
continuation of a Default (unless, with respect to a non-continuing Default, any Coinbase Entity has already commenced exercising its rights under this Section 27 or has otherwise notified Client that it will promptly due so) each Coinbase Entity
shall have the right to net the amounts due (including any payments, unpaid trade credits (as applicable), or any other obligations) from it to Client and from Client to it, so that a single settlement payment (the “Net Payment”) shall be
payable by one Party to the other, which Net Payment shall be immediately due and payable (subject to the other provisions hereof and of any other agreement with a Coinbase Entity); provided that if any amounts may not be netted against all other
amounts, such excluded amounts shall be netted among themselves to the fullest extent permitted under any applicable law, rule or regulation. Upon the occurrence and continuation of a Default (unless, with respect to a non- continuing Default, any
Coinbase Entity has already commenced exercising its rights under this Section 27 or has otherwise notified Client that it will promptly due so), each Coinbase Entity may also (a) liquidate, apply and set off any or all Client Assets (as such term is
defined in the MTA) or the proceeds thereof against any Net Payment owed to it or any Net Payment owed to another
Page 19 of 54
Coinbase Entity by Client; and (b) set off and net any Net Payment owed by it or any other Coinbase Entity to Client against (i) any or all collateral or margin (or the U.S. dollar
value thereof, which shall be determined by Coinbase on the basis of a recent price at which the relevant Digital Asset was sold to customers on the Trading Platform) posted by it or any other Coinbase Entity to Client; and (ii) any Net Payment owed
by Client to any Coinbase Entity or any other obligation owing by Client to a Coinbase Entity (whether mature or unmatured, fixed or contingent, or liquidated or unliquidated). With respect to Digital Assets, Client agrees that the Digital Assets
held in its Prime Broker Account are of a kind or type customarily sold on recognized markets, subject to standard price quotations and may threaten to decline speedily in value. Client agrees that if any of the Coinbase Entities exercises its setoff
rights or secured party remedies against Client’s Digital Assets, that the Coinbase Entity may value the Digital Assets using the same valuation method and same process that is otherwise used when a Coinbase customer sells an asset on the Trading
Platform (as such term is defined in the MTA) or any other commercially reasonable valuation method. “Business Day” means any day, other than a Saturday or Sunday, on which commercial banks in New York, New York are open for general business.
| 28. |
Disclaimer of Warranties
|
EXCEPT AS OTHERWISE PROVIDED HEREIN, TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, THE PRIME BROKER SERVICES ARE PROVIDED ON AN “AS IS” AND “AS AVAILABLE” BASIS, AND THE
COINBASE ENTITIES HEREBY SPECIFICALLY DISCLAIM ALL WARRANTIES AND/OR CONDITIONS OF MERCHANTABILITY, SATISFACTORY QUALITY AND FITNESS FOR A PARTICULAR PURPOSE, WHETHER EXPRESS, IMPLIED OR STATUTORY. EXCEPT AS OTHERWISE PROVIDED HEREIN, THE COINBASE
ENTITIES DO NOT WARRANT THAT THE PRIME BROKER SERVICES, INCLUDING ACCESS TO AND USE OF THE COINBASE WEBSITES (INCLUDING THE COINBASE PRIME BROKER SITE AND THE COINBASE CUSTODY SITE), OR ANY OF THE CONTENT CONTAINED THEREIN, WILL BE CONTINUOUS,
UNINTERRUPTED, TIMELY, COMPATIBLE OR ABLE TO WORK WITH ANY SOFTWARE, SYSTEM OR OTHER SERVICES, SECURE, COMPLETE, FREE OF HARMFUL CODE, OR ERROR-FREE.
| 29. |
Indemnification
|
| 29.1 |
Client shall defend and indemnify and hold harmless each Coinbase Entity, its affiliates and licensors, and each of its and their respective officers, directors and employees from and against: any and all Claims
and Losses arising out of or relating to Client’s violation of any law, rule or regulation, or rights of any third party; and any and all Losses arising out of or relating to third party Claims that arise out of or relate to Client’s breach
of this Coinbase Prime Broker Agreement or Client’s gross negligence, fraud, or willful misconduct, in each case except to the extent such Claim or Loss arises out of or relates to a Coinbase Entity’s negligence, bad faith, fraud or willful
misconduct. This obligation will survive any termination of this Coinbase Prime Broker Agreement.
|
| 29.2 |
Each Coinbase Entity shall defend and indemnify and hold harmless Client, its affiliates and each of its and their respective officers, directors and employees from and against any and all Losses arising out of or
relating to third party Claims that Client’s access or use of
|
Page 20 of 54
the Prime Broker Services, as provided by such Coinbase Entity, in accordance with the terms and conditions of this Coinbase Prime Broker Agreement, violates,
misappropriates, or infringes upon any United States patent, copyright, trademark, trade secret or other intellectual property right of a third party, except to the extent such Claims or Losses arise out of or relate to Client’s negligence, bad
faith, fraud, willful misconduct, or material breach of this Coinbase Prime Broker Agreement. This obligation will survive any termination of this Coinbase Prime Broker Agreement. For the avoidance of doubt, no Coinbase Entity shall be obligated to
defend or indemnify or hold harmless Client, its affiliates or its and their respective officers, directors and employees for any such Claims or Losses: (a) based upon any information, specification, instruction, software, service, data, or material
not furnished directly to Client by the Coinbase Entities; (b) based upon the combination of the Prime Broker Services with any information, specification, instruction, software, service, data, or material not provided directly to Client by the
Coinbase Entities; or (c) based upon access or use of any of the Prime Broker Services other than in accordance with the terms and conditions of this Coinbase Prime Broker Agreement or any applicable third party terms and conditions previously
furnished to Client or known to Client or any other indemnified person with respect to Client at the relevant time the Prime Broker Services are accessed or used.
| 29.3 |
Each Party’s (the “indemnifying Party’s”) indemnification obligation under this Section 29 shall apply in respect of a Claim or any Losses arising out of or relating to a Claim only if the other Party
seeking indemnification (the “indemnified Party”) does the following: (a) notifies the indemnifying Party promptly in writing after the indemnified Party receives notice of the Claim (or sooner if required by applicable law); (b) gives
the indemnifying Party the right to assume the defense and any settlement negotiations (subject to Section 29.4 below), which defense shall be conducted by counsel chosen by the indemnifying Party and reasonably satisfactory to the
indemnified Party; and in the event that the indemnifying Party elects to assume the defense of any such Claim and retain such counsel, the indemnified Party will bear the fees and expenses of any additional counsel thereafter retained by it;
and (c) if the indemnifying Party assumes the defense of such Claim, gives the indemnifying Party the information, authority, and assistance the indemnifying Party reasonably needs to defend against or settle the Claim. If the indemnifying
Party fails to notify the indemnified Party that it will assume the defense of such Claim within a reasonable time after its receipt of written notice of such Claim, the indemnified Party shall have the right to undertake the defense of such
Claim on behalf of, and for the account and at the risk of, the indemnifying Party. Notwithstanding the preceding sentence, in no event shall the indemnifying Party be liable for the fees and expenses of more than one external counsel (in
addition to local counsel of record) for all the indemnified Parties in any jurisdiction in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or
circumstances.
|
| 29.4 |
No Party providing indemnification pursuant to this Section 29 shall accept any settlement of any Claims or Losses if such settlement imposes any financial or non-financial liabilities, obligations, or restrictions
on, or requires an admission of guilt or wrong-doing from, any party indemnified pursuant to this Section 29, without such party’s prior written consent.
|
Page 21 of 54
| 29.5 |
For the purposes of this Coinbase Prime Broker Agreement:
|
| (a) |
“Claim” means any action, suit, litigation, demand, charge, arbitration, proceeding (including any civil, criminal, administrative, investigative or appellate proceeding), hearing, inquiry, audit,
examination or investigation commenced, brought, conducted or heard by or before, or otherwise involving, any court or other governmental, regulatory, or administrative body or any arbitrator or arbitration panel; and
|
| (b) |
“Losses” means any liabilities, damages, payments, obligations, losses, interest, costs and expenses, security or other remediation costs (including any regulatory investigation or third party subpoena
costs, reasonable attorneys’ fees, court costs, expert witness fees, and other expenses relating to investigating or defending any Claim); fines, taxes, fees, restitution, or penalties imposed by any governmental, regulatory, or
administrative body, interest on and additions to tax with respect to, or resulting from, Taxes imposed on Client’s assets, cash, other property, or any income or gains derived therefrom; and judgments (at law or in equity) or awards of any
nature.
|
| 30. |
Computer Viruses
|
The Coinbase Entities shall not have any liability, obligation, or responsibility whatsoever, for any damage or interruptions caused by any computer viruses, spyware, scareware,
Trojan horses, worms or other malware that may affect Client’s computer or other equipment, or any phishing, spoofing or other attack, unless such damage or interruption directly resulted from a Coinbase Entity’s negligence, bad faith, fraud, or
willful misconduct. The Coinbase Entities advise the regular use of a reputable and readily available virus screening and prevention software. Client should also be aware that SMS and email services are vulnerable to spoofing and phishing attacks and
should use care in reviewing messages purporting to originate from the Coinbase Entities. Client should always access and use its Prime Broker Account through the Coinbase Prime Broker Site to review any Orders, deposits or withdrawals or required
actions if Client has any uncertainty regarding the authenticity of any communication or notice.
| 31. |
Business Continuity Plan
|
The Coinbase Entities have established a business continuity plan(s) that will support their ability to conduct business in the event of a significant business disruption (“SBD”).
This plan(s) is reviewed and updated annually, and can be updated more frequently, if deemed necessary by the Coinbase Entities in their sole discretion. Should any Coinbase Entity be impacted by an SBD, it aims to minimize business interruption as
quickly and efficiently as possible. To receive more information about the Coinbase Entities’ business continuity plan, please send a written request to security@coinbase.com.
| 32. |
Limitation of Liability
|
| 32.1 |
TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW AND NOTWITHSTANDING ANY OTHER PROVISION IN THIS COINBASE PRIME BROKER AGREEMENT, IN NO EVENT SHALL ANY PARTY BE LIABLE FOR ANY
|
Page 22 of 54
INCIDENTAL, INDIRECT, SPECIAL, PUNITIVE, CONSEQUENTIAL, OR SIMILAR LOSSES ARISING OUT OF OR RELATING TO THE PRIME BROKER ACCOUNT, THE PRIME BROKER SERVICES, THIS
COINBASE PRIME BROKER AGREEMENT, OR THE PARTIES’ RELATIONSHIP, REGARDLESS OF THE THEORY OF LIABILITY (WHETHER CONTRACT, TORT, STATUTORY, OR OTHER THEORY), EVEN IF SUCH PARTY (OR AUTHORIZED REPRESENTATIVE THEREOF) HAD BEEN ADVISED OF OR KNEW OR SHOULD
HAVE KNOWN OF THE POSSIBILITY THEREOF.
| 32.2 |
CLIENT CONSENTS TO THE USE OF AUTOMATED SYSTEMS BY THE COINBASE ENTITIES IN CONJUNCTION WITH CLIENT’S PRIME BROKER ACCOUNT AND THE PRIME BROKER SERVICES, INCLUDING AUTOMATED ORDER ENTRY AND EXECUTION, ROUTING,
RECORDKEEPING, REPORTING, AND ACCOUNT RECONCILIATION AND RISK MANAGEMENT SYSTEMS (COLLECTIVELY, “AUTOMATED SYSTEMS”). CLIENT AGREES AND UNDERSTANDS THAT THE USE OF AUTOMATED SYSTEMS ENTAILS RISKS, INCLUDING INTERRUPTION OR DELAYS OF
SERVICE, SYSTEM FAILURE, AND ERRORS IN THE DESIGN OR FUNCTIONING OF SUCH AUTOMATED SYSTEMS (COLLECTIVELY, A “SYSTEM FAILURE”) THAT COULD CAUSE SUBSTANTIAL LOSSES TO CLIENT. WITHOUT LIMITING SECTION 32.1, NOTWITHSTANDING ANY OTHER
PROVISION IN THIS COINBASE PRIME BROKER AGREEMENT, IN NO EVENT SHALL ANY COINBASE ENTITY HAVE ANY LIABILITY, OBLIGATION, OR RESPONSIBILITY WHATSOEVER FOR ANY CLAIMS OR LOSSES ARISING OUT OF OR RELATING TO A SYSTEM FAILURE IN RESPECT OF ANY
AUTOMATED SYSTEM ESTABLISHED AND MAINTAINED BY A PARTY THAT IS NOT A COINBASE ENTITY OR AN AFFILIATE OF A COINBASE ENTITY.
|
| 32.3 |
WITHOUT LIMITING SECTIONS 32.1 OR 32.2, NOTWITHSTANDING ANY OTHER PROVISION IN THIS COINBASE PRIME BROKER AGREEMENT, IN NO EVENT SHALL ANY COINBASE ENTITY HAVE ANY LIABILITY, OBLIGATION, OR RESPONSIBILITY
WHATSOEVER TO CLIENT OR ANY THIRD PARTY FOR THE ACTS OR OMISSIONS OF, OR ANY LOSSES PAID OR PAYABLE TO CLIENT OR ANY THIRD PARTY BY, ANY OTHER COINBASE ENTITY IN RESPECT OF THE PRIME BROKER ACCOUNT, THE PRIME BROKER SERVICES, THIS COINBASE
PRIME BROKER AGREEMENT, OR THE PARTIES’ RELATIONSHIP. FOR THE AVOIDANCE OF DOUBT, NOTHING IN THIS COINBASE PRIME BROKER AGREEMENT SHALL BE DEEMED TO CREATE ANY JOINT OR JOINT AND SEVERAL LIABILITY AMONG ANY OF THE COINBASE ENTITIES.
|
| 32.4 |
WITHOUT LIMITING SECTIONS 32.1, 32.2, OR 32.3, NOTWITHSTANDING ANY OTHER PROVISION IN THIS COINBASE PRIME BROKER AGREEMENT, IN NO EVENT SHALL ANY COINBASE ENTITY HAVE ANY LIABILITY, OBLIGATION, OR RESPONSIBILITY
WHATSOEVER TO CLIENT OR ANY THIRD PARTY FOR ANY CLAIMS OR LOSSES ARISING FROM OR RELATING TO CLIENT ASSETS ALLOCATED TO THE COINBASE CONNECTED TRADING VENUE DIGITAL ASSET BALANCE, EXCEPT TO THE EXTENT OF CLIENT’S PRO RATA SHARE
|
Page 23 of 54
OF LOSSES DUE TO THE THEFT OF SUPPORTED DIGITAL ASSETS ARISING OUT OF OR RELATING TO THE NEGLIGENCE, BAD FAITH, FRAUD, OR WILLFUL MISCONDUCT OF THE RELEVANT
CONNECTED TRADING VENUE; PROVIDED THAT COINBASE SHALL BE SUBROGATED TO ANY CLAIM CLIENT MAY HAVE AGAINST SUCH CONNECTED TRADING VENUE, AND CLIENT SHALL COOPERATE IN ANY ATTEMPT BY COINBASE TO RECOVER AGAINST SUCH CONNECTED TRADING VENUE.
| 32.5 |
EXCEPT (i) WITH RESPECT TO THE EXCLUDED LIABILITIES OR (ii) TO THE EXTENT CAUSED BY THE RELEVANT PARTY’S FRAUD OR WILLFUL MISCONDUCT, WITHOUT LIMITING SECTIONS 32.1, 32.2, 32.3, OR 32.4, NOTWITHSTANDING ANY OTHER
PROVISION IN THIS COINBASE PRIME BROKER AGREEMENT, IN NO EVENT (x) SUBJECT TO CLAUSE (y) IMMEDIATELY BELOW, SHALL ANY COINBASE ENTITY’S OR CLIENT’S AGGREGATE LIABILITY ARISING OUT OF OR RELATING TO THE PRIME BROKER ACCOUNT, THE PRIME BROKER
SERVICES, THIS COINBASE PRIME BROKER AGREEMENT, OR THE PARTIES’ RELATIONSHIP EXCEED AN AMOUNT GREATER THAN THE VALUE OF THE SUPPORTED DIGITAL ASSETS INVOLVED IN THE TRANSACTION(S) GIVING RISE TO SUCH LIABILITY; AND (y) SOLELY IN RESPECT OF
CUSTODIAL SERVICES PROVIDED PURSUANT TO THE CUSTODY AGREEMENT, SHALL COINBASE CUSTODY’S AGGREGATE LIABILITY EXCEED THE GREATER OF (A) THE AGGREGATE AMOUNT OF FEES PAID BY CLIENT TO COINBASE CUSTODY IN RESPECT OF THE CUSTODIAL SERVICES DURING
THE TWELVE (12) MONTH PERIOD PRIOR TO THE EVENT GIVING RISE TO SUCH LIABILITY; AND (B) THE VALUE OF THE SUPPORTED DIGITAL ASSETS ON DEPOSIT IN CLIENT’S CUSTODIAL ACCOUNT(S) GIVING RISE TO SUCH LIABILITY AT THE TIME OF THE EVENT GIVING RISE TO
SUCH LIABILITY (THE VALUE OF WHICH SHALL BE CALCULATED AT THE AVERAGE UNITED STATES DOLLAR ASK PRICE, AT THE TIME OF SUCH EVENT, OF THE THREE (3) LARGEST U.S.-BASED EXCHANGES (BY TRAILING 30-DAY VOLUME) WHICH OFFER THE RELEVANT DIGITAL
CURRENCY OR DIGITAL ASSET/USD TRADING PAIR, AS RELEVANT); PROVIDED, HOWEVER, THAT IN NO EVENT SHALL COINBASE CUSTODY’S AGGREGATE LIABILITY IN RESPECT OF EACH COLD STORAGE ADDRESS EXCEED ONE HUNDRED MILLION US DOLLARS (US$100,000,000).
|
“EXCLUDED LIABILITIES” MEANS (w) THE OBLIGATION OF CLIENT TO PAY ANY FEES OWED BY IT UNDER THIS COINBASE PRIME BROKER AGREEMENT; (x) ANY LIABILITY OF
CLIENT ARISING FROM ITS BREACH OF SECTION 17.1 OF THIS COINBASE PRIME BROKER AGREEMENT; (y) ANY LIABILITY OF CLIENT ARISING FROM ITS BREACH OF ITS REPRESENTATIONS, WARRANTIES OR COVENANTS IN SECTION 14.1 OF THIS COINBASE PRIME BROKER AGREEMENT AND
(z) ANY LIABILITY OR OBLIGATION OF A PARTY ARISING UNDER SECTION 20 OF THIS COINBASE PRIME BROKER AGREEMENT (PROVIDED THAT IN NO EVENT WILL ANY PARTY’S LIABILITY ARISING UNDER SECTION 20 OF THIS COINBASE PRIME BROKER AGREEMENT EXCEED AN AMOUNT OF
FIVE MILLION US DOLLARS
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(US$5,000,000) IN THE AGGREGATE).
| 32.6 |
WITHOUT LIMITING SECTIONS 32.1, 32.2, 32.3, 32.4, OR 32.5, NOTWITHSTANDING ANY OTHER PROVISION IN THIS COINBASE PRIME BROKER AGREEMENT, IN NO EVENT SHALL ANY COINBASE ENTITY HAVE ANY LIABILITY, OBLIGATION, OR
RESPONSIBILITY WHATSOEVER TO CLIENT OR ANY THIRD PARTY FOR ANY CLAIMS OR LOSSES ARISING OUT OF OR RELATING TO THE PRIME BROKER ACCOUNT, THE PRIME BROKER SERVICES, THIS COINBASE PRIME BROKER AGREEMENT, OR THE PARTIES’ RELATIONSHIP, EXCEPT TO
THE EXTENT SUCH LOSSES RESULT FROM SUCH COINBASE ENTITY’S NEGLIGENCE, BAD FAITH, FRAUD, OR WILLFUL MISCONDUCT.
|
| 32.7 |
CLIENT UNDERSTANDS AND AGREES THAT THE FOREGOING LIMITATIONS AND DISCLAIMERS OF LIABILITY SHALL APPLY EQUALLY TO ANY COINBASE ENTITY’S AFFILIATES AND LICENSORS, AND EACH OF ITS AND THEIR RESPECTIVE OFFICERS,
DIRECTORS, AND EMPLOYEES.
|
| 33. |
Privacy
|
The Coinbase Entities shall use and disclose Client’s and its Authorized Representatives’ non- public personal information in accordance with the Coinbase Privacy Policy.
| 34. |
Arbitration
|
[Reserved].
| 35. |
Term, Termination and Suspension
|
This Coinbase Prime Broker Agreement is effective as of the date written below and shall remain in effect until terminated by Coinbase or Client as follows:
| (a) |
Either Party may terminate this Coinbase Prime Broker Agreement in its entirety for any reason and without Cause by providing at least ninety (90) days’ prior written notice to the other Party. For such purpose,
the Coinbase Entities shall be considered a single Party and Client must provide its notice to Coinbase as agent for the Coinbase Entities.
|
| (b) |
Regardless of any other provision of this Coinbase Prime Broker Agreement, the Coinbase Entities may, in their sole discretion, terminate this Coinbase Prime Broker Agreement in its entirety or suspend, restrict or
terminate Client’s Prime Broker Services, including by suspending, restricting or closing Client’s Prime Broker Account and/or any associated Trading Account, Custodial Account or any credit account (as applicable), for Cause, at any time
upon written notice to Client.
|
“Cause” for purposes of this Section 35 shall include:
| (i) |
A Default (other than a Default described in clause (vi) of Section 27 of this
|
Page 25 of 54
Coinbase Prime Broker Agreement) occurs and is continuing with respect to Client;
| (ii) |
Client materially breaches this Coinbase Prime Broker Agreement, including any agreement, exhibit, appendix, addendum, policy referenced herein, or supplement attached hereto, and, to the extent capable of remedy,
such breach is not cured within five (5) Business Days following written notice from Coinbase to Client of such breach;
|
| (iii) |
A requirement of a facially valid subpoena, court order, or binding order of a government authority;
|
| (iv) |
Client’s Prime Broker Account is subject to any pending litigation, investigation, or government proceeding and/or Coinbase reasonably perceives a heightened risk of legal or regulatory non-compliance associated
with Client’s use of the Prime Broker Services; or
|
| (v) |
Coinbase reasonably suspects Client of attempting to circumvent Coinbase’s controls or uses the Prime Broker Services in a manner Coinbase otherwise deems inappropriate or potentially harmful to itself or third
parties.
|
| (c) |
Client acknowledges that the Coinbase Entities’ decision to take certain actions, including suspending, restricting or terminating Client’s Prime Broker Account or Prime Broker Services, may be based on
confidential criteria that are essential to Coinbase’s risk management and security practices. Client agrees that the Coinbase Entities are under no obligation to disclose the details of its risk management and security practices to Client.
|
| (d) |
Notwithstanding the foregoing, each exhibit, addendum and supplement to this Coinbase Prime Broker Agreement is separately terminable in accordance with any terms set forth therein explicitly addressing termination
thereof; provided, however, that if the MTA or Custody Agreement is terminated, the remainder of this Coinbase Prime Broker Agreement, including each other exhibit, addendum and supplement, shall terminate concurrently. The consequences of
termination of each of the Prime Broker Services shall be as set forth in the respective exhibit, addendum or supplement.
|
| 36. |
Severability
|
If any provision or condition of this Coinbase Prime Broker Agreement shall be held invalid or unenforceable, the remainder of this Coinbase Prime Broker Agreement shall continue
in full force and effect.
| 37. |
Waiver
|
Any waivers of rights by a Party under this Coinbase Prime Broker Agreement must be expressed in writing and signed by such Party (or in the case of a Coinbase Entity, by Coinbase
on behalf of
Page 26 of 54
itself or another relevant Coinbase Entity). A waiver will apply only to the particular circumstance giving rise to the waiver and will not be considered a continuing waiver in
other similar circumstances unless the intention to grant a continuing waiver is expressed in writing. Any Party’s failure to insist on strict compliance with this Coinbase Prime Broker Agreement or any other course of conduct by such Party shall not
be considered a waiver of its rights under this Coinbase Prime Broker Agreement (including all agreements, exhibits, appendices, addenda, policies referenced herein, and supplements attached hereto or referenced herein).
| 38. |
Survival
|
All provisions of this Coinbase Prime Broker Agreement which by their nature extend beyond the expiration or termination of this Coinbase Prime Broker Agreement, including sections
pertaining to suspension or termination, cancellation of Prime Broker Services, debts owed to the Coinbase Entities, general use of the Coinbase websites (including the Coinbase Prime Broker Site and the Coinbase Custody Site), disputes with the
Coinbase Entities, the treatment of Confidential Information, and general provisions such as indemnification and limitation of liability, shall survive the termination or expiration of this Coinbase Prime Broker Agreement.
| 39. |
Governing Law; Consent to Jurisdiction
|
This Coinbase Prime Broker Agreement, Client’s Prime Broker Account, and the Prime Broker Services, and any Claim or other cause of action based upon, arising out of or related
thereto (whether based on law, in equity, in contract, in tort or any other theory), will be governed by and construed in accordance with the laws of the State of New York, excluding its conflicts of laws principles, except to the extent such state
law is preempted by federal law.
Client and each Coinbase Entity agree that any action, suit, or proceeding based upon, arising out of or related to this Agreement shall be brought only in the state or federal
courts in New York County, New York. In the event of such an action, suit, or proceeding, Client and each Coinbase Entity agree to waive and not raise as an affirmative defense any claim that such courts lack personal jurisdiction or are an improper
or inconvenient venue.
| 40. |
Force Majeure
|
The Coinbase Entities shall not be liable for delays, suspension of operations, whether temporary or permanent, failure in performance, or interruption of service which result
directly or indirectly from any cause or condition beyond the reasonable control of the Coinbase Entities, including any act of God; embargo; natural disaster; act of civil or military authorities; act of terrorists including cyber-related terrorist
acts; hacking; government restrictions; any ruling by any Connected Trading Venue, exchange or market (other than Coinbase’s exchange platform); market volatility or disruptions in order trading on any Connected Trading Venue, exchange or market;
suspension of trading; civil disturbance; war; strike or other labor dispute; fire; severe weather; interruption in telecommunications, Internet services, or network provider services; failure of equipment and/or software; failure of computer or
other electronic or mechanical equipment or communication lines; plague; epidemic; pandemic; outbreaks of infectious disease or any other public health crises, including quarantine or other employee restrictions; failure of third parties to follow
instructions; acts or omissions of any Connected Trading Venue; or any other catastrophe or other occurrence
Page 27 of 54
which is beyond the reasonable control of the Coinbase Entities, in each case, except to the extent caused by or attributable to the negligence, fraud, bad faith or willful
misconduct of a Coinbase Entity.
| 41. |
Entire Agreement; Headings
|
This Coinbase Prime Broker Agreement, together with all agreements, exhibits, appendices, addenda, policies referenced herein, and supplements attached hereto or referenced herein,
comprises the entire understanding between Client and the Coinbase Entities as to the Prime Broker Services and supersedes all prior discussions, agreements and understandings, including any previous version of this Coinbase Prime Broker Agreement
and the Custodial Services Agreement between Client and any Coinbase Entity, including all exhibits, appendices, addenda, policies referenced therein, and supplements attached thereto or referenced therein. Section headings in this Coinbase Prime
Broker Agreement are for convenience only and shall not govern the meaning or interpretation of any provision of this Coinbase Prime Broker Agreement.
| 42. |
Amendments
|
Any modification or addition to this Coinbase Prime Broker Agreement must be in writing and either (a) signed by a duly authorized representative of each Party, or (b) accepted and
agreed to by Client.
| 43. |
Assignment
|
No Party may assign any rights and/or licenses granted under this Coinbase Prime Broker Agreement without the written consent of the other Parties. However, Coinbase reserves the
right to assign its rights under this Coinbase Prime Broker Agreement to any of the Coinbase Entities or their affiliates or subsidiaries, or to any successor in interest of any business associated with the Prime Broker Services, provided that
Coinbase will notify Client within a reasonable amount of time after such assignment. Any attempted transfer or assignment in violation hereof shall be null and void. Subject to the foregoing, this Coinbase Prime Broker Agreement will bind and inure
to the benefit of the Parties, their successors and permitted assigns.
| 44. |
Relationship of the Parties
|
Nothing in this Coinbase Prime Broker Agreement shall be deemed or is intended to be deemed as creating a joint venture, nor shall it cause Client and any Coinbase Entity to be
treated as partners, joint venturers, or otherwise as joint associates for profit, nor shall Client or any Coinbase Entity be treated as the agent of the other except to the extent otherwise expressly set forth herein.
| 45. |
Notice and Contacts
|
| 45.1 |
All notices required or permitted to be given hereunder (excluding, for the avoidance of doubt, any Communications which Client has agreed and consented to receive electronically pursuant to Appendix 2 attached
hereto) shall be in writing delivered to the Party at its address specified below via an overnight mailing company of national reputation. Any Party that changes its notice address must notify the other Party promptly of such change.
|
Page 28 of 54
If to any Coinbase Entity:
Legal Department
Coinbase, Inc.
248 3rd St #434
Oakland CA, 94607
legal@coinbase.com
If to Client, the address specified in its signature block on the Execution Page.
| 45.2 |
In the event of any market operations, connectivity, or erroneous trade issues that require immediate attention including any unauthorized access to Client’s Prime Broker Account, please contact:
|
To Coinbase: support@coinbase.com.
To Client: the email address specified in its signature block on the Execution Page.
| 46. |
Contact Coinbase; Complaints
|
| 46.1 |
If Client has any feedback, questions, or complaints, Client may contact Coinbase Customer Support at support@coinbase.com.
|
| 46.2 |
To see more information about our regulators, licenses, and contact information for feedback, questions or complaints, please visit https://www.coinbase.com/legal/licenses.
|
| 47. |
Construction
|
As used in this Coinbase Prime Broker Agreement, (a) the words “including”, “includes” and their other derivations are non-exclusive and are in each case deemed to be followed by
the words “without limitation”; and (b) the words “agrees to” and “will” are in each case deemed to mean “shall”.
| 48. |
Counterparts
|
This Coinbase Prime Broker Agreement may be executed in one or more counterparts, including by facsimile or email of .pdf signatures or DocuSign (or similar electronic signature
software), each of which shall be deemed to be an original document, but all such separate counterparts shall constitute only one and the same Coinbase Prime Broker Agreement.
[Signatures on following page]
Page 29 of 54
IN WITNESS WHEREOF, the Parties have caused this Coinbase Prime Broker Agreement, including the Custody Agreement and MTA, to be duly
executed and delivered as of the date below.
|
COINBASE, INC. For itself and as agent for the Coinbase Entities
|
|
|
By:
|
/s/ Lauren Abendschein
|
|
Name:
|
Lauren Abendschein
|
|
Title:
|
VP
|
|
Date:
|
October 9, 2025
|
 |
|
|
CLIENT: INVESCO GALAXY SOLANA ETF
|
|
|
By: Invesco Capital Management LLC, as its Sponsor
|
|
|
By:
|
/s/ Rudolf Reitmann
|
|
Name:
|
Rudolf Reitmann
|
|
Title:
|
Global Head of UIT & ETF Services
|
|
Date:
|
October 9, 2025
|
|
Address:
|
c/o Invesco Capital Management LLC,
3500 Lacey Road, Suite 700,
Downers Grove, IL 60515,
Attention: Legal Department
|
|
E-Mail:
|
adam.henkel@invesco.com
|
Page 30 of 54
EXHIBIT A
to the Coinbase Prime Broker Agreement
COINBASE CUSTODY CUSTODIAL SERVICES AGREEMENT
This Custody Agreement is entered into between Client and Coinbase Custody and governs Client’s use of the Custodial Services (as defined herein) provided by Coinbase Custody.
Capitalized terms used in this Custody Agreement that are not defined herein shall have the meanings assigned to them in the General Terms.
| 1. |
Custodial Services
|
Client hereby appoints Coinbase Custody as its provider of Custodial Services in accordance with the terms and conditions of this Custody Agreement. Coinbase Custody shall provide
Client with a segregated custody account controlled and secured by Coinbase Custody (“Custodial Account”) to store certain Digital Assets supported by Coinbase Custody, on Client’s behalf (“Custodial Services”). Coinbase Custody
represents that it is, and during all times that it maintains a Custodial Account on behalf of, or provides Custodial Services to, Client will be, 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 Investment Advisers Act of 1940, as amended, and is licensed to custody Client’s Digital Assets in trust on Client’s behalf. Digital Assets in Client’s Custodial Account are not treated as general assets of Coinbase Custody.
Rather, Coinbase Custody serves as a fiduciary and custodian on Client’s behalf, and the Digital Assets in Client’s Custodial Account are considered custodial assets that remain Client’s property.
| 2. |
Custodial Account
|
| 2.1 |
In General. The Custodial Services allow (i) Client to hold its Vault Balance (as that term is defined in the MTA) in its Custodial Account and transfer Digital Assets to
and from its Trading Balance (as that term is defined in the MTA), (ii) Client to deposit supported Digital Assets from a public blockchain address controlled by Client into its Custodial Account, (iii) withdraw supported Digital Assets from
its Custodial Account to a public blockchain address controlled by Client, and (iv) for certain additional services as may be agreed to between Client and Coinbase Custody from time to time in an addendum or attachment hereto. Each such
deposit or withdrawal shall be a “Custody Transaction” and conform to Instructions provided by Client through the Coinbase Prime Broker Site. Client shall withdraw Digital Assets only to public blockchain addresses and accounts owned
by Client or to an address for which Client has conducted the necessary Know Your Customer (KYC) and anti-money laundering (AML) due diligence. Digital Assets are stored in Client’s Custodial Account in accordance with the terms of this
Custody Agreement and are not commingled with other clients’ Digital Assets. Coinbase Custody reserves the right to refuse to process or to cancel any pending Custody Transaction as required by law or in response to a subpoena, court order,
or other binding government order or to enforce transaction, threshold, and condition limits or if Coinbase Custody reasonably believes that the Custody Transaction may violate or facilitate the violation of an applicable law, regulation or
applicable rule of a governmental authority or self-regulatory organization.
|
Page 31 of 54
Coinbase Custody cannot reverse a Custody Transaction which has been broadcast to a Digital Asset network.
| 2.2 |
Digital Asset Deposits and Withdrawals. Coinbase Custody processes supported Digital Asset Custody Transactions according to Instructions received from Client or Client’s
Authorized Representatives, and Coinbase Custody does not guarantee the identity of any user, receiver, requestee, or other party. Client should verify all deposit and withdrawal information prior to submitting Instructions to Coinbase
Custody regarding a Custody Transaction. Client agrees that it will not withdraw Digital Assets to a blockchain address or account that is not owned by Client or to an address for which Client has not conducted the necessary KYC and AML due
diligence. Coinbase Custody reserves the right to charge network fees (including miner fees) to process a Custody Transaction on Client’s behalf. Coinbase Custody will calculate the network fee, if any, in its sole and absolute discretion,
although Coinbase Custody will always notify Client of the network fee at or before the time Client authorizes the Custody Transaction. Coinbase Custody reserves the right to delay any Custody Transaction if it perceives a risk of fraud or
illegal activity.
|
| 2.3 |
Digital Asset Storage and Transmission Delays. With respect to Digital Assets held in the Cold Vault Balance (as that term is defined in the MTA), Coinbase Custody requires
up to twenty-four (24) hours between any request to withdraw Digital Assets from Client’s Custodial Account and submission of Client’s withdrawal to the applicable Digital Asset network. Since Coinbase Custody securely stores all Digital
Asset private keys in offline storage, it may be necessary to retrieve certain information from offline storage in order to facilitate such a withdrawal of Digital Assets held in the Cold Vault Balance in accordance with Client’s
Instructions, which may delay the initiation or crediting of such withdrawal. Client acknowledges and agrees that a Custody Transaction may be delayed, and that Digital Assets held in the Cold Vault Balance shall not be withdrawn upon less
than twenty- four (24) hours’ notice initiated from Client’s Custodial Account. The time of such request shall be the time such notice is transmitted from Client’s Custodial Account. While Coinbase Custody will make reasonable efforts to
process Client initiated deposits in a timely manner, Coinbase Custody makes no representations or warranties regarding the amount of time needed to complete processing as such processing is dependent upon many factors outside of Coinbase
Custody’s control.
|
| 2.4 |
Supported Digital Assets. The Custodial Services are available only in connection with those Digital Assets that Coinbase Custody, in its sole discretion, decides to
support. The Digital Assets that Coinbase Custody supports may change from time to time. Prior to initiating a deposit of a Digital Asset to Coinbase Custody, Client must confirm that Coinbase Custody offers Custodial Services for that
specific Digital Asset. By initiating a deposit of a Digital Asset to a Custodial Account, Client attests that Client has confirmed that the Digital Asset being transferred is a supported Digital Asset offered by Coinbase Custody. Under no
circumstances should Client attempt to use the Custodial Services to deposit or store Digital Assets in any forms that are not supported by Coinbase Custody. Depositing or attempting to deposit Digital Assets that are not supported by
Coinbase Custody may result in such Digital Asset being irretrievable by Client and Coinbase Custody. Coinbase Custody shall have no liability, obligation, or responsibility whatsoever regarding any unsupported Digital Asset sent or attempted
to be sent to it, or regarding any
|
Page 32 of 54
attempt to use the Custodial Services for Digital Assets that Coinbase Custody does not support. To confirm which Digital Assets are supported by Coinbase
Custody, Client should login at the Coinbase Prime Broker Site and carefully review the list of supported Digital Assets. Coinbase Custody recommends that Client deposit a small amount of supported Digital Asset as a test prior to initiating a
deposit of a significant amount of supported Digital Asset. Coinbase Custody may from time to time determine types of Digital Asset that will be supported or cease to be supported by the Custodial Services. Coinbase Custody shall provide Client with
thirty (30) days ‘written notice before ceasing to support a Digital Asset, unless Coinbase Custody is required to cease such support by court order, statute, law, rule (including a self-regulatory organization rule), regulation, code, or other
similar requirement.
| 2.5 |
Monitoring of Use of the Custodial Services. Client acknowledges and agrees that Coinbase Custody may monitor use of the Custodial Account and the Custodial Services and
the resulting information may be utilized, reviewed, retained and/or disclosed by Coinbase Custody for its internal purposes or in accordance with the rules of any applicable legal, regulatory or self-regulatory organization or as otherwise
may be required to comply with relevant law, sanctions programs, legal process or government request.
|
| 2.6 |
Independent Verification. Coinbase Custody shall, upon written request, provide Client’s or its investment adviser’s authorized independent public accountant with
confirmation of or access to information sufficient to confirm (i) Client’s Digital Assets as of the date of an examination conducted pursuant to Rule 206(4)-2(a)(4), and (ii) Client’s Digital Assets are held in a separate account under
Client’s name.
|
| 2.7 |
Third Party Payments. The Custodial Services are not intended to facilitate third party payments of any kind. As such, Coinbase Custody has no control over, or liability
for, the delivery, quality, safety, legality or any other aspect of any goods or services that Client may purchase or sell to or from a third party (including other users of Custodial Services) involving Digital Assets that Client intends to
store, or has stored, in Client’s Custodial Account.
|
| 2.8 |
Termination and Cancellation. If, pursuant to Section 35 of the General Terms, Coinbase Custody closes Client’s Custodial Account or terminates Client’s use of the
Custodial Services, Client will be permitted to withdraw Digital Assets associated with Client’s Custodial Account for ninety (90) days after Custodial Account deactivation or cancellation unless such withdrawal is otherwise prohibited (i)
under applicable law, including applicable sanctions programs, or (ii) by a facially valid subpoena, court order, or binding order of a government authority. If a shorter time frame than the ninety (90) days prescribed in the preceding
sentence is required by an applicable court order, subpoena or regulatory or governmental authority, Client shall use commercially reasonable efforts to withdraw such Digital Assets within such shorter time frame.
|
| 3. |
Coinbase Custody Obligations
|
| 3.1 |
Bookkeeping. Coinbase Custody will keep timely and accurate records as to the deposit, disbursement, investment, and reinvestment of the Digital Assets. Coinbase Custody
will
|
Page 33 of 54
maintain accurate records and bookkeeping of the Custodial Services as required by applicable law and in accordance with Coinbase Custody’s internal document
retention policies.
| 3.2 |
Insurance. Coinbase Custody will obtain and maintain, at its sole expense, insurance coverage in such types and amounts as are commercially reasonable for the Custodial
Services provided hereunder.
|
| 3.3 |
Statements. Coinbase Custody will provide Client with an account statement on at least a quarterly basis that identifies the amount of each Digital Asset in the Custodial
Account at the end of the period and sets forth all transactions in the Custodial Account during that period. Client acknowledges that such information may be provided as part of the account statement provided pursuant to Section 10 of the
General Terms.
|
| 4. |
Coinbase Custody Representations and Warranties
|
Coinbase Custody represents and warrants the following:
| (a) |
Coinbase Custody will safekeep Client’s Digital Assets and segregate all such Digital Assets from both the (a) property of Coinbase Custody and of any other Coinbase Entities, and (b) assets of other customers of
Coinbase Custody;
|
| (b) |
subject to Section 27 of the General Terms, Coinbase Custody has no right, interest, or title in Client’s Digital Assets;
|
| (c) |
Coinbase Custody will maintain adequate capital and reserves to the extent required by applicable law; and
|
| (d) |
Coinbase Custody will not, directly or indirectly, lend, pledge, hypothecate or re- hypothecate any of Client’s Digital Assets.
|
| 5. |
Additional Matters
|
In addition to any additional service providers that may be described in an addendum or attachment hereto, Client acknowledges and agrees that the Custodial Services may be
provided from time to time by, through or with the assistance of affiliates of, or vendors to, Coinbase Custody. Client shall receive notice of any material change in the entities that provide the Custodial Services. Unless Client terminates this
Custody Agreement as permitted herein, any new agreements or amended terms and conditions associated with such change shall be governed by Sections 41 and 42 of the General Terms.
[Remainder of page intentionally left blank]
Page 34 of 54
EXHIBIT B
to the Coinbase Prime Broker Agreement
COINBASE MASTER TRADING AGREEMENT
Client should carefully consider whether trading or holding Digital Assets is suitable for its purpose, including in relation to Client’s knowledge of Digital Assets and Digital
Asset markets and Client’s financial condition. All investments involve risk, and the past performance of a financial product does not guarantee future results or returns.
This Master Trading Agreement (“MTA”) provides terms and conditions for clients to trade Digital Assets through the Coinbase prime broker execution platform (“Trading
Platform”) and is entered into between Client and Coinbase. Upon executing this MTA and completion of standard account opening procedures, Coinbase will open a Trading Account for Client on the Trading Platform consisting of linked accounts at
Coinbase and Coinbase Custody, each accessible via the Trading Platform (“Trading Account”). The Trading Platform shall provide Client with access to trade execution and automated trade routing services and Coinbase Execution Services (as
described below) to enable Client to submit orders (“Orders”) to purchase and sell specified Digital Assets in accordance with this MTA and the Coinbase Trading Rules, as amended and updated from time to time at https://www.coinbase.com/legal/trading_rules
or a successor website (the “Coinbase Trading Rules”) (such services, the “Trading Services”). Capitalized terms used in this MTA that are not defined herein shall have the meanings assigned to them in the General Terms.
| 1. |
Order Routing and Connected Trading Venues
|
| 1.1 |
The Trading Platform operates a trade execution service through which Client may submit Orders to purchase or sell Digital Assets. After Client submits an Order, the Trading Platform will automatically route the
Order (or a portion of the Order) to one of the trading venues to which the Trading Platform has established connections (each such venue, a “Connected Trading Venue”). Each Order shall be sent, processed and settled at each Connected
Trading Venue to which it is routed. Once an Order to purchase Digital Assets has been placed, the associated Client Assets (as defined below) used to fund the Order will be placed on hold and will generally not be eligible for use or
withdrawal.
|
| 1.2 |
With each Connected Trading Venue, Coinbase shall establish an account in its name, or in its name for the benefit of clients, to trade on behalf of its clients. The establishment of a Trading Account will not
cause Client to have a direct legal relationship, or account with, any Connected Trading Venue. The Trading Platform shall not intentionally match the buy and sell orders of its clients against each other and shall not intentionally settle
Orders against or otherwise trade with Coinbase’s principal funds. Client acknowledges that Coinbase and its other clients may trade in their own interest on the Connected Trading Venues and could, therefore, be the counterparty to a Client
Order on a Connected Trading Venue.
|
| 1.3 |
Client acknowledges that Coinbase has sole discretion to determine the Connected Trading Venues to which it establishes connections. Coinbase directs Orders to the Connected Trading Venues on an automated basis and
generally does not manually route orders. In
|
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designing the algorithms that determine an Order’s routing logic, Coinbase considers a variety of factors relating to the Order and the Connected Trading Venues,
including the speed of execution, whether the venue is able to consummate off-chain transactions, the availability of efficient and reliable systems, the level of service provided, and the cost of executing orders. Coinbase may receive cash payments
or other financial incentives (such as reciprocal business arrangements) from the Connected Trading Venues.
| 1.4 |
Coinbase makes no representation or warranty of any kind regarding any Connected Trading Venue, including as to its financial condition, data, security or quality of its execution services, and shall have no
liability, obligation, or responsibility whatsoever for the selection or performance of any Connected Trading Venue, except (i) to the extent set forth in Section 32.4 of the General Terms and (ii) to the extent of Coinbase’s negligence, bad
faith, fraud or willful misconduct. Digital Assets may trade at different prices on different trading venues, and other Connected Trading Venues and/or trading venues not used by Coinbase may offer better prices and/or lower costs than the
Connected Trading Venue used to execute Client’s Order.
|
| 1.5 |
Coinbase acts in an agency capacity for purposes of certain Orders, but may also act in a principal capacity for certain Orders, as specified in the Coinbase Trading Rules. In the Request For Quotation (“RFQ”)
service, Coinbase acts as principal to fill Orders by providing indicative firm pricing in accordance with a variety of market factors, at its sole discretion. Client should independently evaluate whether such services are appropriate given
its investing profile and sophistication, among other considerations.
|
| 2. |
Client Trading Balance and Vault Balance
|
| 2.1 |
For purposes of this MTA, Client’s Digital Assets are referenced as “Client Digital Assets,” Client’s cash is referenced as “Client Cash,” and Client Digital Assets and Client Cash are together
referenced as “Client Assets.”
|
| 2.2 |
Within the Trading Platform, Coinbase provides access to two types of accounts with balances relating to Client Assets: (1) the “Trading Balance” (as described below in Section 2.3) and (2) the “Vault
Balance” (as described below in Section 2.5). The Trading Account provides a record of both the Trading Balance and the Vault Balance. Client decides how much Client Digital Assets to allocate from time to time between the Trading
Balance and the Vault Balance. Client’s Trading Balance is separate from any Digital Assets Client maintains directly with Coinbase Custody.
|
| 2.3 |
Client Digital Assets credited to the Trading Balance are immediately available to Client for purposes of submitting an Order. Coinbase holds Digital Assets credited to the Trading Balance in one of three ways: (i)
in omnibus hot wallets (each, an “Omnibus Hot Wallet”); (ii) in omnibus cold wallets (each, an “Omnibus Cold Wallet”); and (iii) in Coinbase’s accounts with the Connected Trading Venues (“Coinbase Connected Trading Venue Digital
Asset Balance”). Client agrees that Coinbase has sole discretion in deciding how to allocate Digital Assets credited to the Trading Balance. Because Digital Assets credited to the Trading Balance are held on an omnibus basis and because
of the nature of certain Digital Assets, Client does not have an identifiable claim to any particular Digital Asset.
|
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Instead, Client’s Trading Balance represents an entitlement to a pro rata share of the Digital Assets Coinbase has
allocated to the Omnibus Hot Wallets, Omnibus Cold Wallets and Coinbase Connected Trading Venue Digital Asset Balance. Coinbase relies on the Connected Trading Venues for the Coinbase Connected Trading Venue Digital Asset Balance, and Client has no
contractual relationship with Coinbase Custody or the Connected Trading Venues with respect to Digital Assets credited to the Trading Balance.
| 2.4 |
Client may maintain Client Cash in the Trading Balance (not the Vault Balance). Coinbase holds Client Cash credited to the Trading Balance in one of three ways: (i) in one or more omnibus accounts in Coinbase’s
name for the benefit of customers at one or more U.S. insured depository institutions (each, an “FBO account”); (ii) with respect to USD, in liquid investments, which may include but are not limited to U.S. treasuries and money market
funds, in accordance with state money transmitter laws; and (iii) in Coinbase’s omnibus accounts at Connected Trading Venues. Coinbase will title the FBO accounts it maintains with U.S. depository institutions and maintain records of Client’s
interest in a manner designed to enable receipt of Federal Deposit Insurance Corporation (“FDIC”) deposit insurance, where applicable and up to the deposit insurance limits applicable under FDIC regulations and guidance, on Client Cash
for Client’s benefit on a pass-through basis. Coinbase cannot guarantee that pass-through FDIC deposit insurance will apply, since such insurance is dependent in part on compliance of the depository institutions. Coinbase may also title its
accounts at some or all Connected Trading Venues and maintain records of Client interests in those accounts in a manner consistent with FDIC requirements for pass- through deposit insurance, but availability of pass-through deposit insurance,
up to the deposit insurance limits applicable under FDIC regulations and guidance, is also dependent on the actions of the Connected Trading Venues and any depository institutions they use, which may not be structured to provide pass-through
deposit insurance. FDIC insurance applies to cash deposits at banks and other insured depository institutions in the event of a failure of that institution. It does not apply to any Coinbase Entity or to any Digital Asset held by a Coinbase
Entity on Client’s behalf. Client Cash is immediately available to Client for purposes of submitting an Order, unless a restriction applies.
|
| 2.5 |
At Client’s election, Client Digital Assets may also be allocated to the Vault Balance which is held in a Custodial Account (as defined in the Custody Agreement) in Client’s name at Coinbase Custody pursuant to the
Custody Agreement. The custody of Client Digital Assets in the Vault Balance held in Client’s Custodial Account will be divided between segregated hot storage in Client’s name, or if applicable, Portfolio name, (“Hot Vault Balance”)
and segregated cold storage in Client’s name, or if applicable, Portfolio name, (“Cold Vault Balance”). Client maintains sole discretion in deciding how to allocate Digital Assets among the Hot Vault Balance and Cold Vault Balance.
Digital Assets in the Hot Vault Balance can be transferred immediately to Client’s Trading Balance, unless a restriction applies. Digital Assets in the Cold Vault Balance can be transferred to Client’s Trading Balance subject to Coinbase
Custody’s standard cold storage withdrawal procedures. Client appoints Coinbase as Client’s agent for purposes of instructing Coinbase Custody to transfer Client Digital Assets between Client’s Vault Balance and Client’s Trading Balance.
Client agrees that an Instruction to Coinbase to settle an Order to or from Client’s Vault Balance constitutes authorization to Coinbase to transfer Client Digital Assets to or from Client’s Vault Balance as necessary or appropriate to
consummate such
|
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settlement.
| 2.6 |
In all circumstances and consistent with laws and regulations applicable to Coinbase, Coinbase will keep an internal ledger that indicates the Client Assets credited to Client’s Trading Balance and enables Coinbase
and its auditors and regulators to identify Client and the Client Assets. Maintenance of the Vault Balance shall be subject to the terms of the Custody Agreement.
|
| 2.7 |
Coinbase treats all Client Assets as custodial assets held for the benefit of Client. No Client Assets credited to the Trading Balance shall be considered to be the property of, or loaned to, Coinbase, except as
provided in any loan agreement between Client and any Coinbase Entity. Coinbase does not represent or treat Client Digital Assets or Client Cash as Coinbase assets on its balance sheet. Neither Coinbase nor any Coinbase Entity will sell,
transfer, loan, rehypothecate or otherwise alienate Client Assets credited to Client’s Trading Balance unless instructed by Client pursuant to an agreement between Client and a Coinbase Entity.
|
| 3. |
Role of Coinbase Custody
|
| 3.1 |
To facilitate the Trading Services, Coinbase may maintain the Omnibus Hot Wallet and the Omnibus Cold Wallet in one or more custodial FBO accounts with its affiliate, Coinbase Custody. In such cases, although the
Omnibus Hot Wallet and the Omnibus Cold Wallet are held in Coinbase’s FBO accounts with Coinbase Custody, Client’s legal relationship for purposes of Digital Assets held in the Omnibus Hot Wallet and the Omnibus Cold Wallet is not directly or
indirectly with Coinbase Custody and the terms, conditions and agreements relating to those wallets are governed by this MTA.
|
| 3.2 |
Client Digital Assets held in the Hot Vault Balance and Cold Vault Balance are maintained directly between Client and Coinbase Custody in Client’s name and are subject to the terms of Client’s Custody Agreement.
|
| 4. |
Cash and Digital Asset Deposits and Withdrawals
|
| 4.1 |
To deposit Client Cash, Client must initiate a transfer from a linked bank account, a wire transfer, a SWIFT transfer, a deposit or other form of electronic payment approved by Coinbase from time to time to
Coinbase’s bank account, the instructions for which are available on the Coinbase Prime Broker Site. Coinbase will credit the Trading Balance with Client Cash once the associated cash is delivered to Coinbase. Client Cash is held as described
in Section 2.4 of this MTA. As noted in Section 2.4 of this MTA, Coinbase intends for Client to benefit from FDIC deposit insurance on Client Cash in the Trading Balance on a pass-through basis, but does not guarantee or warrant that
treatment.
|
| 4.2 |
To withdraw Client Cash, Client may also initiate a withdrawal of Client Cash from the Trading Balance at any time using the withdrawal function on the Trading Platform.
|
| 4.3 |
To deposit Client Digital Assets, Client can transfer Client Digital Assets directly to the Omnibus Hot Wallet or Omnibus Cold Wallet, the instructions for which are available on the Coinbase Prime Broker
Site. In addition, Client may transfer Client Digital Assets to
|
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and among its Hot Vault Balance or Cold Vault Balance that Client holds with Coinbase Custody. When Client transfers Digital Assets to Coinbase or Coinbase
Custody, it delivers custody and control of the Digital Assets to Coinbase, Coinbase Custody or Coinbase’s designee. Client represents and warrants that any Digital Asset transferred to Coinbase or Coinbase Custody is free and clear of all liens,
claims and encumbrances.
| 4.4 |
To withdraw Client Digital Assets, Client must provide Coinbase with Instructions via the Coinbase Prime Broker Site (“Withdrawal Transfer”). Once Client has initiated a Withdrawal Transfer, the
associated Client Digital Assets will be in a pending state and will not be included in Client’s Trading Balance or Vault Balance. Client acknowledges that Coinbase may not be able to reverse a Withdrawal Transfer once initiated. Client may
withdraw Client Digital Assets at any time, subject to delays for Digital Assets held in the Cold Vault Balance, and any applicable account, platform or network delay or restriction.
|
| 4.5 |
Client must verify all transaction information prior to submitting withdrawal Instructions to Coinbase, as Coinbase cannot and does not guarantee the identity of the wallet owner or bank account to which Client is
sending Client Digital Assets or Client Cash, as applicable. Coinbase shall have no liability, obligation, or responsibility whatsoever for Client Cash or Client Digital Asset transfers sent to or received from a wrong party in reliance on
inaccurate Instructions.
|
| 5. |
Order Submission, Settlement and Cancellation
|
| 5.1 |
After Client has submitted an Order, Client cannot cancel, reverse, or change any Order marked as complete, and Coinbase does not guarantee that Client will be able to cancel, reverse or change any other Order once
it has been submitted. Coinbase will use reasonable efforts to fulfill bona fide Orders and cancellation requests that comply with the terms of this MTA, including the Coinbase Trading Rules, but
Coinbase shall have no liability, obligation, or responsibility whatsoever if Coinbase is unable to do so or is delayed in doing so. Coinbase also will have no liability, obligation, or responsibility whatsoever for inaccurate Instructions
Coinbase receives or for delays in receiving or failure to receive Instructions. Coinbase’s security procedures are designed to control access to the Prime Broker Account, not the accuracy of Client Instructions, and Coinbase may execute any
Order on the terms received.
|
| 5.2 |
Client agrees to make full payment for all Orders in the Trading Account and authorizes Coinbase to debit the Prime Broker Account to settle any Order submitted using the Trading Services.
|
| 6. |
Order Confirmations and Order Errors
|
| 6.1 |
Coinbase will confirm the execution or cancellation of any Order solely by transmitting an electronic confirmation to Client via e-mail or through the Trading Platform. Client agrees to accept electronic trade
confirmations in lieu of printed confirmations. Client agrees to monitor each Order until Coinbase has confirmed the Order’s execution or cancellation through the Trading Platform (“Order Confirmations”).
|
| 6.2 |
Client acknowledges that Order Confirmations may be delayed or erroneous. Client agrees
|
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to notify Coinbase promptly in writing through the Trading Platform or through the Coinbase dedicated customer service email address or website form (available
at: help.coinbase.com/en/contact-us) if: (i) Client fails to receive an accurate Order Confirmation; (ii) Client receives an Order Confirmation different than Client’s Order; (iii) Client receives an Order Confirmation for an order that
Client did not place; or (iv) the Order Confirmation otherwise reflects any inaccuracy regarding Client’s Orders, balances, positions, transaction history, or any other feature of Client’s use of the Trading Services.
| 6.3 |
Client agrees to return to Coinbase any assets erroneously distributed to Client promptly upon Coinbase’s evidence to Client of such distribution error, but in any event within thirty (30) days of such evidence
being provided. Client further agrees not to withdraw the erroneously distributed assets from its Trading Account, or to return it entirely to Coinbase if Client has already withdrawn the assets.
|
| 6.4 |
All Orders are subject to Coinbase Trading Rules, the rules and policies of the Connected Trading Venues, and all applicable laws, rules and regulations. Client agrees that Coinbase may adjust Client’s Trading
Balance or Vault Balance to correct any error, in accordance with this MTA and the Coinbase Trading Rules.
|
| 6.5 |
Coinbase may modify the terms of or cancel any Order executed on the Trading Platform if Coinbase determines in its reasonable discretion that the Order was clearly erroneous according to the Coinbase Trading
Rules.
|
| 7. |
Disruption to Trading Platform; Limits on Client’s Orders
|
| 7.1 |
Client acknowledges that electronic facilities and systems such as the Trading Platform are vulnerable to disruption, delay or failure and, consequently, such facilities and systems may be unavailable to Client as
a result of foreseeable and unforeseeable events. Client understands and agrees that Coinbase does not guarantee uninterrupted access to the Trading Platform or all features of the Trading Services. Client acknowledges that although Coinbase
will attempt to provide notice of any scheduled or unscheduled unavailability that would result in Client being unable to access the Trading Platform or the Trading Services, Coinbase cannot guarantee advanced notice to Client.
|
| 7.2 |
Coinbase may, in its sole discretion, take the following actions and shall use reasonable efforts to provide Client with as much prior notice as practicable in each case: (i) halt or suspend trading on the Trading
Platform, (ii) halt or suspend trading of any Digital Assets or currency, or (iii) to the extent provided in the Coinbase Prime Broker Agreement, halt or suspend Client’s Trading Services. Further, Coinbase may impose, in its sole discretion,
limits on the amount or size of Client’s Orders and Coinbase shall use reasonable efforts to provide Client with as much prior notice as practicable of any such limits.
|
| 8. |
Coinbase Trading Rules and Order Types
|
Client agrees to comply with the Coinbase Trading Rules in effect at the time of any Order or use of the Trading Services. Clients can select from various types of Orders (each an
“Order Type”) and the terms of each Order Type may vary. Client agrees to review and become familiar with the terms of all Order Types available through the Trading Service. A detailed description of the terms
Page 40 of 54
of all Orders is contained in the Coinbase Trading Rules. Coinbase reserves the right to modify the terms of any Order Type and the Coinbase Trading Rules at any time without prior
notice to Client, and Client acknowledges that it is solely responsible for ensuring knowledge of applicable Order Types and the Coinbase Trading Rules prior to placing an Order.
| 9. |
Coinbase Supported Digital Assets
|
Coinbase determines in its sole discretion to support Digital Assets for use with the Trading Services. For an updated list of supported Digital Assets, please visit the Coinbase
Prime Broker Site. Not all Digital Assets supported for Custodial Services are also supported for Trading Services.
| 10. |
Coinbase Execution Services; Security Interest in Connection with OTC Orders
|
| 10.1 |
At Coinbase’s sole discretion, Client may elect to submit Orders to Coinbase Execution Services (“CES”), a Trading Service through which CES personnel will execute Orders on behalf of Client. CES will
execute Orders by using automated trade routing services through Client’s Prime Broker Account or by fulfilling Orders on Coinbase’s over-the- counter (“OTC”) trading service (“OTC Services”). Coinbase has sole and absolute
discretion to accept or reject any Order submitted to CES. Coinbase and Client may communicate regarding Instructions related to Orders submitted to CES on a mutually agreed communication medium, including instant messaging, email, and
telephone.
|
| 10.2 |
CES brokers Orders on a best efforts basis as Client’s agent and may exercise discretion in executing Orders. Client must pre-fund its Trading Balance and/or establish a credit arrangement with Coinbase Credit
prior to submitting such Orders. By electing to use CES, Client agrees that it is authorizing CES personnel to access its Prime Broker Account to initiate and execute Orders. Client acknowledges that CES personnel will retain access to the
Client Prime Broker Account until Client’s Authorized Representative(s) provides Coinbase with Instructions to terminate such access. Absent express written agreement between the Parties, Coinbase will accept Orders only from Authorized
Representatives that are designated as having trading authority with respect to the Prime Broker Account; Client is solely responsible for updating the identities of the Authorized Representatives that have such trading authority.
|
| 10.3 |
For OTC Services, CES personnel will confirm the terms of an Order (which terms shall include asset, quantity, price, settlement timing, and fees) with Client prior to executing the Order. Coinbase has policies and
procedures in place that are reasonably designed to prevent the disclosure of the Client’s identity to its OTC counterparty. Coinbase may, in its sole and absolute discretion, accept the following statements (or similar or analogous
statements) as Client’s final and binding agreement to the terms of an Order: “done,” “I buy,” “bought,” “I sell,” or “sold.” A completed, executed, and settled Order will be reflected in Client’s Prime Broker Account.
|
| 10.4 |
For Orders fulfilled via OTC Services (“OTC Orders”), each of Client’s and its OTC counterparty’s confirmations of the terms of the OTC Order deems such OTC Order as binding and final, and thereby executed.
Client hereby grants to Coinbase a continuing first
|
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priority security interest in, lien on and right of set off against all of Client’s right, title and interest, whether now owned or existing or hereafter
acquired or arising, in Client’s Trading Balance and Vault Balance and all Client Assets held in the Trading Balance and the Vault Balance together with proceeds thereof, in order to secure Client’s settlement obligations arising in connection with
OTC Orders.
| 10.5 |
[Reserved].
|
| 11. |
Determination of Suitability; All Risks Not Disclosed
|
Coinbase’s provision of the Trading Services is neither a recommendation that Client enter into a particular Order nor a representation that any product described on the Trading
Platform is suitable or appropriate for Client. Many of the Trading Services described on the Trading Platform involve significant risks, and Client should not use the Trading Services unless it has fully understood all such risks and has
independently determined that such Orders are appropriate. Any discussion of the risks contained in this MTA or on the Trading Platform should not be considered to be a disclosure of all risks or a complete discussion of the applicable risks.
| 12. |
Characterization of Trading Services; Not a Registered Broker-Dealer or Investment Adviser
|
Client understands and acknowledges that no transactions executed in connection with Client’s Trading Account or the Trading Services are securities transactions, and Coinbase is
not registered with the U.S. Securities and Exchange Commission as a broker-dealer or an investment adviser or licensed under any state securities laws. Coinbase is not acting as a fiduciary in respect of Client (including in connection with its
rights under this MTA) and does not have any responsibility under the standards governing the conduct of broker-dealers, fiduciaries, investment advisers or investment managers. Client agrees and acknowledges that any information or advice provided
by Coinbase or any other Coinbase Entity does not and will not serve as the basis of any investment decision by Client.
| 13. |
Coinbase Corporate Accounts
|
Coinbase and its affiliates may transact through trading accounts on the Trading Platform (“Coinbase Corporate Accounts”) for purposes including inventory management, to
facilitate Client Orders, and for other corporate purposes. To the extent that a Coinbase Corporate Account transacts on the Trading Platform, the Coinbase Corporate Account (i) will not have any special priority vis-a-vis Client Orders and will be
subject to the Coinbase Trading Rules, (ii) will trade only on Market Data available to all clients, and (iii) will not access any non-public data of any clients. Coinbase’s internal ledger will indicate the amount of each Digital Asset held for each
client and each such Coinbase Corporate Account.
| 14. |
Term, Termination and Suspension
|
| 14.1 |
Regardless of any other provision of this MTA, Coinbase may, in its sole discretion, suspend, restrict or terminate Client’s Trading Services, including by suspending, restricting or closing Client’s Trading
Account, in accordance with Section 35 of the General Terms.
|
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| 14.2 |
If Client is subject to termination, Client agrees to transfer any Client Assets off the Trading Platform within thirty (30) days of receipt of the termination notice unless such transfer is otherwise prohibited
(i) under applicable law, including applicable sanctions programs, or (ii) by a facially valid subpoena or court order. Client agrees to promptly provide Coinbase with Instructions as to where its Client Assets should be transferred, and
agrees that failure to do so within thirty (30) days of receipt of notice of termination may result in Client Assets being transferred to Client’s linked bank account or Digital Asset wallet on file, in each case subject to off-set for any
outstanding obligations to any Coinbase Entity in accordance with the General Terms. Final disbursement of assets may be delayed until any remaining obligations or indebtedness have been satisfied. Client is responsible for all debits, costs,
commissions, and losses arising from any actions Coinbase must take to liquidate or close transactions in Client’s Trading Account.
|
| 15. |
Unclaimed Property
|
If Coinbase is holding Client Assets in the Trading Balance, has no record of Client’s use of the Trading Services for an extended period, and is otherwise unable to contact
Client, Coinbase may be required under applicable laws, rules or regulations to report these assets as unclaimed property and to deliver such unclaimed property to the applicable jurisdiction. Coinbase may deduct a dormancy fee or other
administrative charge from such unclaimed funds, as permitted by applicable laws, rules or regulations.
| 16. |
Tax Reporting Information
|
| 16.1 |
At Client’s cost, Coinbase shall use good faith efforts to provide such information, cooperation and assistance as is reasonably requested by Client to enable Client to satisfy any applicable tax reporting
requirements directly related to Client’s use of the Prime Broker Services.
|
| 16.2 |
Coinbase will provide Client with transaction history for the Trading Account, including purchase dates, purchase price information, sale dates (including conversion and/or transfer dates, if applicable) and sales
price (including conversion and/or transfer price, if applicable) for each Digital Asset and the Trading Account.
|
| 16.3 |
Coinbase will provide Client with an applicable Form 1099 for the Trading Account each calendar year.
|
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API Supplement to the MTA
Developer Tools
| 1. |
Use of Developer Tools. If Client elects to use developer tools rather than interface through the Trading Platform, this API Supplement shall be incorporated into the MTA by
reference and all defined terms in the MTA shall apply to this API Supplement. The terms of the MTA and this API Supplement shall govern Client’s use of any and all development applications provided by Coinbase, including Coinbase’s
application programming interface and any accompanying or related documentation, source code, executable applications and other materials (the “Coinbase API”), the Coinbase Sandbox, and any other resources or services available on or
through the Coinbase systems (“Coinbase API Services”) (collectively, the “Developer’s Tools”).
|
| 2. |
License Grant. Subject to the terms and restrictions set forth in the MTA, Coinbase grants Client a limited, revocable, non-exclusive, non-transferrable and
non-sublicensable license solely to use and integrate the Developer’s Tools and underlying content into Client’s website or application (Client’s “Application”) so that Client’s Application can interface directly with Coinbase devices,
applications, or services.
|
| 3. |
Security. Client shall take steps to adequately secure its APi Keys and OAuth Tokens, including the security measures specified at: https://developers.coinbase.com/docs/wallet/api-key-authentication and
https://developers.coinbase.com/docs/wallet/coinbase-connect/security-best-practices.
|
| 4. |
Limitation on Use. Unless otherwise agreed with Coinbase, Developer Tools may only be used to facilitate Client and its Authorized Representatives’ access to the Coinbase
API Services and not to re-sell or otherwise provide parties other than Client and its Authorized Representatives with access to the Coinbase API Services.
|
| 5. |
Restrictions. Client shall not:
|
| (a) |
Copy, rent, lease, sell, sublicense, or otherwise transfer Client’s rights in the Developer’s Tools to a third party.
|
| (b) |
Alter, reproduce, adapt, distribute, display, publish, reverse engineer, translate, disassemble, decompile or otherwise attempt to create any source code that is derived from the Developer’s Tools.
|
| (c) |
Cache, aggregate, or store data or content accessed via the Developer’s Tools other than for purposes allowed under the MTA.
|
| (d) |
Use the Developer’s Tools for any Application that constitutes, promotes or is used in connection with spyware, adware, or any other malicious programs or code.
|
| (e) |
Use the Developer’s Tools to encourage, promote, or participate in illegal activity, violate third party rights, including intellectual property rights or privacy rights, or engage in any Prohibited Use or
Prohibited Business as defined in
|
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www.coinbase/legal/prohibited.
| (f) |
Use the Developer’s Tools in a manner that exceeds reasonable request volume, constitutes excessive or abusive usage, or otherwise impacts the stability of Coinbase’s servers or impacts the behavior of other
applications using the Developer’s Tools.
|
| (g) |
Attempt to cloak or conceal Client’s identity or application’s identity when requesting authorization to the Developer’s Tools.
|
| 6. |
API Calls and Compliance. Coinbase may at its sole discretion set limits on the number of API calls that Client can make, for example in the interest of service stability.
If Client exceeds these limits, Coinbase may moderate its activity or cease offering it access to the Coinbase APIs altogether in Coinbase’s reasonable discretion. Client agrees to such limitations and will not attempt to circumvent such
limitations. Coinbase may immediately suspend or terminate access to the Developer’s Tools without notice if Coinbase believes, in its reasonable discretion, that Client is in violation of the MTA.
|
| 7. |
Updates and Support. Coinbase may elect to provide Client with support or modifications for the Developer’s Tools, in its sole discretion, and may terminate such support at
any time without notice. Coinbase may change, suspend, or discontinue any aspect of the Developer’s Tools at any time, including the availability of any Developer’s Tools.
|
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Appendix 1
to the Coinbase Prime Broker Agreement
PROHIBITED USE, PROHIBITED BUSINESS, AND CONDITIONAL USE
This policy sets forth the limitations concerning Client’s use of Client’s Prime Broker Account. Coinbase, on behalf of the Coinbase Entities, may amend this policy at any time by
providing a revised version on the Coinbase Prime Broker Site. The revised version will be effective at the time Coinbase posts it. Coinbase will provide Client with prior notice of any material changes via the Coinbase Prime Broker Site.
| 1. |
PROHIBITED USE. Client may not use Client’s Custodial Account to engage in the following categories of activity (“Prohibited Uses”). The Prohibited Uses extend to any
third party that gains access to the Prime Broker Services through Client’s account or otherwise, regardless of whether such third party was authorized or unauthorized by Client to use the Prime Broker Services associated with the Prime
Broker Account. The specific types of use listed below are representative, but not exhaustive. If Client is uncertain as to whether or not Client’s use of Prime Broker Services involves a Prohibited Use, or has questions about how these
requirements apply to Client, please contact Coinbase. By opening a Prime Broker Account, Client confirms that Client will not use Client’s Prime Broker Account to do any of the following:
|
| (a) |
Unlawful Activity: Activity which would violate, or assist in violation of, any law, statute, ordinance, or regulation, sanctions programs administered in the countries
where the Coinbase Entities conduct business, including the U.S. Department of Treasury’s Office of Foreign Assets Control, or which would involve proceeds of any unlawful activity; publish, distribute or disseminate any unlawful material or
information.
|
| (b) |
Abusive Activity: Actions which impose an unreasonable or disproportionately large load on the Coinbase Entities’ infrastructure, or detrimentally interfere with, intercept,
or expropriate any system, data, or information; transmit or upload any material to the Prime Broker Site that contains viruses, Trojan horses, worms, or any other harmful or deleterious programs; attempt to gain unauthorized access to the
Prime Broker Site, other Prime Broker Accounts, computer systems or networks connected to the Prime Broker Site, through password mining or any other means; use Prime Broker Account information of another party to access or use the Prime
Broker Site; or transfer Client’s Prime Broker Account access or rights to Client’s Prime Broker Account to a third party, unless by operation of law or with the express permission of Coinbase.
|
| (c) |
Abuse Other Users: Interfere with another Coinbase Prime Broker user’s access to or use of any Prime Broker Services; defame, abuse, extort, harass, stalk, threaten or
otherwise violate or infringe the legal rights (including rights of privacy, publicity and intellectual property) of others; incite, threaten, facilitate, promote, or encourage hate, racial intolerance, or violent acts against others; harvest
or
|
Page 46 of 54
otherwise collect information from the Prime Broker Site about others, including email addresses, without proper consent.
| (d) |
Fraud: Activity which operates to defraud the Coinbase Entities, Coinbase Prime Broker users, or any other person; provide any false, inaccurate, or misleading information
to the Coinbase Entities.
|
| (e) |
Gambling: Lotteries; bidding fee auctions; sports forecasting or odds making; fantasy sports leagues with cash prizes; Internet gaming; contests; sweepstakes; games of
chance.
|
| (f) |
Intellectual Property Infringement: Engage in transactions involving items that infringe or violate any copyright, trademark, right of publicity or privacy or any other
proprietary right under the law, including sales, distribution, or access to counterfeit music, movies, software, or other licensed materials without the appropriate authorization from the rights holder; use of the Coinbase Entities’
intellectual property, name, or logo, including use of Coinbase Prime Broker trade or service marks, without express consent from the Coinbase Entities or in a manner that otherwise harms the Coinbase Entities, or any Coinbase brand; any
action that implies an untrue endorsement by or affiliation with the Coinbase Entities.
|
| (g) |
Written Policies: Client may not use the Prime Broker Account or the Prime Broker Services in a manner that violates, or is otherwise inconsistent with, any operating
instructions promulgated by the Coinbase Entities.
|
| 2. |
PROHIBITED BUSINESSES. Although Coinbase may offer a Prime Broker Account to any entity that can successfully create an account in accordance with the terms of this Coinbase
Prime Broker Agreement, the following categories of businesses, business practices, and sale items are barred from the Prime Broker Services (“Prohibited Businesses”). The specific types of use listed below are representative,
but not exhaustive. If Client is uncertain as to whether or not Client’s use of the Prime Broker Services involves a Prohibited Business, or has questions about how these requirements apply to Client, please contact Coinbase. By opening a
Prime Broker Account, Client confirms that Client will not use the Prime Broker Services in connection with any of following businesses, activities, practices, or items:
|
| (a) |
Restricted Financial Services: Check cashing, bail bonds, collections agencies.
|
| (b) |
Intellectual Property or Proprietary Rights Infringement: Sales, distribution, or access to counterfeit music, movies, software, or other licensed materials without the
appropriate authorization from the rights holder.
|
| (c) |
Counterfeit or Unauthorized Goods: Unauthorized sale or resale of brand name or designer products or services; sale of goods or services that are illegally imported or
exported or which are stolen.
|
| (d) |
Regulated Products and Services: Marijuana dispensaries and related businesses; sale of tobacco, e-cigarettes, and e-liquid; online prescription or pharmaceutical
|
Page 47 of 54
services; age-restricted goods or services; weapons and munitions; gunpowder and other explosives; fireworks and related goods; toxic, flammable, and radioactive
materials; products and services with varying legal status on a state-by-state basis.
| (e) |
Drugs and Drug Paraphernalia: Sale of narcotics, controlled substances, and any equipment designed for making or using drugs, such as bongs, vaporizers, and hookahs.
|
| (f) |
Pseudo-Pharmaceuticals: Pharmaceuticals and other products that make health claims that have not been approved or verified by the applicable local and/or national regulatory
body.
|
| (g) |
Substances designed to mimic illegal drugs: Sale of a legal substance that provides the same effect as an illegal drug (e.g.,
salvia, kratom).
|
| (h) |
Adult Content and Services: Pornography and other obscene materials (including literature, imagery and other media); sites offering any sexually-related services such as
prostitution, escorts, pay-per view, adult live chat features.
|
| (i) |
Multi-level Marketing: Pyramid schemes, network marketing, and referral marketing programs.
|
| (j) |
Unfair, Predatory or Deceptive Practices: Investment opportunities or other services that promise high rewards; sale or resale of a service without added benefit to the
buyer; resale of government offerings without authorization or added value; sites that Coinbase determines in our sole discretion to be unfair, deceptive, or predatory towards consumers.
|
| (k) |
Gambling Services.
|
| (l) |
Weapons Manufacturers/Vendors.
|
| (m) |
Money Services: Gift cards; prepaid cards; sale of in-game currency unless the merchant is the operator of the virtual world; act as a payment intermediary or aggregator or
otherwise resell any of the Custodial Services.
|
| (n) |
Crowdfunding
|
| (o) |
High-risk Businesses: any businesses that Coinbase believes pose elevated financial risk or legal liability.
|
| (p) |
Hate Groups
|
| 3. |
CONDITIONAL USE. Express written consent and approval from Coinbase on behalf of the Coinbase Entities must be obtained prior to using Prime Broker Services for the
following categories of business and/or use (“Conditional Uses”). Coinbase may also require Client to agree to additional conditions, make supplemental representations and warranties, complete enhanced on-boarding procedures, and
operate subject to restrictions
|
Page 48 of 54
if Client uses the Prime Broker Services in connection with any of following businesses, activities, or practices:
| (a) |
Charities: Acceptance of donations for nonprofit enterprise.
|
| (b) |
Games of Skill: Games which are not defined as gambling under this Coinbase Prime Broker Agreement or by law, but which require an entry fee and award a prize.
|
| (c) |
Religious/Spiritual Organizations: Operation of a for-profit religious or spiritual organization.
|
[Remainder of page intentionally left blank]
Page 49 of 54
Appendix 2
to the Coinbase Prime Broker Agreement
E-SIGN DISCLOSURE AND CONSENT
This policy describes how the Coinbase Entities deliver communications to Client electronically. Coinbase, on behalf of the Coinbase Entities, may amend this policy at any time by
providing a revised version on the Coinbase Prime Broker Site. The revised version will be effective at the time Coinbase posts it. Coinbase will provide Client with prior notice of any material changes via the Coinbase Prime Broker Site.
| 1. |
ELECTRONIC DELIVERY OF COMMUNICATIONS.
|
Client agrees and consents to receive electronically all communications, agreements, documents, notices and disclosures (collectively, “Communications”) that Coinbase
provides in connection with Client’s Prime Broker Account and Client’s use of Prime Broker Services. Communications include:
| (a) |
Terms of use and policies Client agrees to (e.g., this Coinbase Prime Broker Agreement, including all agreements, exhibits, appendices, addenda, policies referenced herein,
and supplements attached hereto), including updates to these agreements or policies;
|
| (b) |
Prime Broker Account details, history, transaction receipts, confirmations, and any other Prime Broker Account deposit, withdrawal or transaction information;
|
| (c) |
Legal, regulatory, and tax disclosures or statements the Coinbase Entities may be required to make available to Client; and
|
| (d) |
Responses to claims or customer support inquiries filed in connection with Client’s Prime Broker Account.
|
Coinbase will provide these Communications to Client by posting them on the Prime Broker Site, emailing them to Client at the primary email address on file with Coinbase,
communicating to Client via instant chat, and/or through other electronic communication. For the sake of clarity, the Parties hereby acknowledge and agree that Client’s consent herein allows for electronically delivered Communications to be accepted
and agreed to by Client through the Prime Broker Services interface. Furthermore, the Coinbase Entities may use electronic signatures and obtain them from Client in connection with Client’s use of the Prime Broker Services. Client consents and agrees
that Client’s electronic signature on Communications, including agreements, terms of use, addenda, consents, authorizations or updates relating thereto has the same effect as if Client signed them in ink.
| 2. |
HARDWARE AND SOFTWARE REQUIREMENTS.
|
In order to access and retain electronic Communications, Client will need the following computer hardware and software:
Page 50 of 54
| (a) |
A device with an Internet connection;
|
| (b) |
A current web browser that includes 128-bit encryption (e.g. , Internet Explorer version 9.0 and above, Firefox version 3.6 and above, Chrome version 31.0 and above, or Safari 7.0 and above) with cookies enabled;
|
| (c) |
A valid email address (Client’s primary email address on file with Coinbase); and
|
| (d) |
Sufficient storage space to save past Communications or an installed printer to print them.
|
| 3. |
HOW TO WITHDRAW CLIENT’S CONSENT.
|
Client may withdraw Client’s consent to receive Communications electronically by contacting Coinbase. If Client fails to provide or if Client withdraws Client’s consent to receive
Communications electronically, Coinbase reserves the right to immediately close Client’s Prime Broker Account or charge Client additional fees for paper copies.
| 4. |
UPDATING CLIENT’S INFORMATION.
|
It is solely Client’s responsibility to provide Coinbase with a true, accurate, and complete e-mail address and Client’s contact information, and to keep such information up to
date. Client understands and agrees that if Coinbase sends Client an electronic Communication but Client does not receive it because Client’s primary email address on file is incorrect, out of date, blocked by Client’s service provider, or Client is
otherwise unable to receive electronic Communications, Coinbase will be deemed to have provided the Communication to Client. Client may update Client’s information by logging into Client’s Prime Broker Account and visiting settings or by contacting
Coinbase.
[Remainder of page intentionally left blank]
Page 51 of 54
Appendix 3
to the Coinbase Prime Broker Agreement
COINBASE PRIME FEE SCHEDULE
This Fee Schedule is effective upon the Effective Date of the Coinbase Prime Broker Agreement between Coinbase and Client, and sets forth the fees payable to the Coinbase Entities
in connection with the Prime Broker Services. All capitalized terms not defined in this Fee Schedule shall have the meaning given to them in the Coinbase Prime Broker Agreement.
This Fee Schedule is subject to modification from time to time upon mutual written agreement of Coinbase, on behalf of itself and as agent for the Coinbase
Entities, and Client. Notwithstanding the foregoing, Coinbase, on behalf of itself and as agent for the Coinbase Entities, shall also have the right to modify the fees set forth in this Fee Schedule at its discretion at any time upon not less than
thirty (30) days’ prior written notice to Client.
Client acknowledges that it is solely responsible for ensuring knowledge of applicable fees prior to use of the Prime Broker Services including the Trading
Services and Custodial Services.
SETTLEMENT FEES
Client shall pay the aggregate amount of Settlement Fees on a monthly basis:
| • |
The “Settlement Fee” shall be [ ] per settlement in Client’s Trading Balance.
|
| • |
Each settlement is (i) a withdrawal or deposit of Digital Assets using the Prime Broker Services and (ii) between Client and other identified participants involved in Client’s share creations and redemptions.
|
PRIME BROKER CUSTODY ETP SERVICES FEE
On a monthly basis, Client shall pay a Prime Broker Custody ETP Services Fee associated with (x) the Custody Account and associated Custodial Services provided
by Coinbase Custody Trust Company, LLC and (y) other exchange traded product (ETP) services provided to Client:
The “Prime Broker Custody ETP Services Fee” will be the Monthly Average AUC multiplied by the Custodial Billing Rate. The Prime Broker Custody ETP Services Fee is a tiered,
annualized fee. See Notes below for further details.
Notes
| • |
“Monthly Average AUC” shall equal the USD denominated sum of Client’s Daily AUC (as defined below) for each calendar day of the billing month, for each Digital Asset on deposit in the Custodial Account,
divided by the number of calendar days in the billing month.
|
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| • |
The “Custodial Billing Rate” is defined as the proportion of total calendar days in the billing month to total calendar days in the billing year multiplied by the Annualized Prime Broker Custody ETP Services
Fee Rate (as defined below).
|
| • |
With respect to each Digital Asset on deposit in the Custodial Account on any calendar day, the “Client’s Daily AUC” shall equal the daily Digital Asset price for such Digital Asset as listed on Coinbase Pro
multiplied by Client’s daily Digital Asset balance for such Digital Asset on deposit in the Custodial Account as of 4PM ET.
|
| • |
The “Annualized Prime Broker Custody ETP Services Fee Rate” is applied on a marginal basis and shall equal the sum of each Monthly Average AUC tier multiplied by the associated rate tier. For example, if
Client had a Monthly Average AUC of $1.5M, Client would have an Annualized Prime Broker Custody ETP Services Fee Rate that equals: ($999,999.99 at rate tier 1) + ($500,000 at rate tier 2):
|
|
Monthly Average AUC
|
Rate Tier
(in basis points)
|
|
Less than $1 million
|
|
|
$1 million or more up to and including $10 million
|
|
|
More than $10 million up to and including $25 million
|
|
|
More than $25 million up to and including $50 million
|
|
|
More than $50 million up to and including $100 million
|
|
|
More than $100 million up to and including $250 million
|
|
|
More than $250 million up to and including $500 million
|
|
|
More than $500 million up to and including $1 billion
|
|
|
More than $1 billion up to and including $2 billion
|
|
|
More than $2 billion up to and including $3 billion
|
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|
More than $3 billion up to and including $5 billion
|
|
|
More than $5 billion
|
Notwithstanding the foregoing, Client shall have the right at any time upon notice to Coinbase to decline the receipt of the ETP services that
are constituted by surveillance sharing agreement services with Client’s listing exchange, in which case the Annualized Prime Broker Custody ETP Services Fee Rate shall instead be determined on the basis of the Monthly Average AUC tiers and the
associated rate tiers set forth below:
|
Monthly Average AUC
|
Rate Tier (in basis points)
|
|
Up to and including $3 billion
|
|
|
More than $3 billion
|
TRADING ACCOUNT FEES (“All-in”)
Fees associated with the Trading Account and associated Trading Services provided by Coinbase, Inc.:
For each executed Order, Client will pay a fixed rate of [ ] basis points, which includes Coinbase’s commission, the provision of Trading Services and the actual variable
transaction fees associated with the executed Order that Coinbase incurs from Connected Trading Venues. No fees are charged for canceled portions of Orders. Please see the Coinbase Trading Rules for additional details.
Coinbase Prime-assisted trading is available through Coinbase Execution Services. Orders executed using Coinbase Execution Services will pay an additional [ ] basis points for BTC
and ETH Orders and [ ] basis points for all other Orders.
Notes
| • |
1 basis point= 0.01%.
|
| • |
Client will be provided a preview of estimated fees prior to Order submission and can view the Order Confirmation for details of the actual fees associated with executed Orders.
|
| • |
Fees are assessed at the time of Order execution.
|
Page 54 of 54
IMPLEMENTATION FEE
Coinbase Custody is pleased to waive the Implementation Fee at this time.
PAYMENT TERMS
Coinbase will invoice Client for the Settlement Fee and the Prime Broker Custody ETP Services Fee on a monthly basis and Client shall pay all amounts to Coinbase within thirty (30)
days of Client’s receipt of an invoice for such fees. Client will pay any amounts owed hereunder in the form and manner selected by Client and approved by Coinbase, and according to any additional terms found on the Coinbase Prime Broker Site or in
the Coinbase Prime Broker Agreement, including but not limited to transfer of cryptocurrency to an address designated by Coinbase, as a debit from Client’s Prime Broker Account.
The pricing and other terms set forth herein are confidential and shall not be shared with any third parties without the prior written approval of Coinbase.
Exhibit 10.5
CUSTODY AGREEMENT
By and Between
THE BANK OF NEW YORK MELLON
And
INVESCO GALAXY SOLANA ETF
|
BNY MELLON AND CUSTOMER CONFIDENTIAL
|
EXECUTION
|
TABLE OF CONTENTS
|
1.
|
DEFINITIONS
|
1
|
|
2.
|
APPOINTMENT OF CUSTODIAN; ACCOUNTS
|
3
|
|
2.1 Appointment of Custodian
|
3
|
|
|
2.2 Establishment of Accounts
|
3
|
|
|
3.
|
AUTHORIZED PERSONS AND INSTRUCTIONS; ELECTRONIC ACCESS
|
3
|
|
3.1 Authorized Persons
|
3
|
|
|
3.2 Instructions
|
4
|
|
|
3.3 BNY Actions Without Instructions
|
5
|
|
|
3.4 Funds Transfers
|
5
|
|
|
3.5 Electronic Access
|
5
|
|
|
4.
|
AGENTS
|
5
|
|
|
4.1 Use of Agents
|
5
|
|
5.
|
TAX MATTERS
|
6
|
|
5.1 Responsibility for Taxes
|
6
|
|
|
5.2 Payments
|
6
|
|
|
6.
|
CREDITS AND ADVANCES
|
6
|
|
6.1 Advances
|
6
|
|
|
6.2 Repayment
|
6
|
|
|
6.3 Securing Repayment
|
6
|
|
|
6.4 Setoff
|
7
|
|
|
7.
|
STATEMENTS; BOOKS AND RECORDS; THIRD PARTY DATA
|
7
|
|
7.1 Statements
|
7
|
|
|
7.2 Books and Records
|
7
|
|
|
7.3 Third Party Data
|
8
|
|
|
8.
|
DISCLOSURES
|
8
|
|
8.1 Foreign Exchange Transactions
|
8
|
|
|
8.2 Investment of Cash
|
8
|
|
|
9.
|
REGULATORY MATTERS
|
9
|
|
9.1 USA PATRIOT Act
|
9
|
|
|
9.2 Sanctions; Anti-Money Laundering
|
9
|
|
|
10.
|
COMPENSATION
|
10
|
|
10.1 Fees and Expenses
|
10
|
|
|
10.2 Other Compensation
|
10
|
|
|
11.
|
REPRESENTATIONS, WARRANTIES AND COVENANTS
|
11
|
|
11.1 BNY
|
11
|
|
|
11.2 Customer
|
11
|
|
|
12.
|
LIABILITY
|
12
|
|
12.1 Standard of Care
|
12
|
|
|
12.2 Limitation of Liability
|
12
|
|
|
12.3 Force Majeure
|
13
|
|
|
12.4 Indemnification
|
13
|
EXECUTION
|
13.
|
CONFIDENTIALITY
|
13
|
|
13.1 Confidentiality Obligations
|
13
|
|
|
13.2 Exceptions
|
14
|
|
|
14.
|
TERM AND TERMINATION
|
14
|
|
14.1 Term
|
14
|
|
|
14.2 Termination
|
14
|
|
|
14.3 Effect of Termination
|
15
|
|
|
14.4 Survival
|
15
|
|
|
15.
|
GENERAL
|
15
|
|
15.1 Assignment
|
15
|
|
|
15.2 Amendment
|
15
|
|
|
15.3 Governing Law/Forum
|
16
|
|
|
15.4 Business Continuity/Disaster Recovery
|
16
|
|
|
15.5 Non-Fiduciary Status
|
16
|
|
|
15.6 Notices
|
16
|
|
|
15.7 Entire Agreement
|
16
|
|
|
15.8 No Third Party Beneficiaries
|
17
|
|
|
15.9 Counterparts/Facsimile
|
17
|
|
|
15.10 Interpretation
|
17
|
|
|
15.11 No Waiver
|
17
|
|
|
15.12 Headings
|
17
|
|
|
15.13 Severability
|
17
|
EXECUTION
CUSTODY AGREEMENT
This Custody Agreement is made and entered into as of the latest date set forth on the signature page hereto (the “Effective Date”) by and
between THE BANK OF NEW YORK MELLON, a New York state chartered bank (“BNY”), and INVESCO GALAXY SOLANA ETF, a Delaware statutory trust (“Customer”). BNY and Customer are collectively referred to as the “Parties” and individually as a “Party”.
RECITALS
WHEREAS, Customer wishes to appoint BNY as the custodian of certain of its assets, and BNY is willing to provide such services on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and intending to be legally bound, the Parties agree as follows.
| 1. |
DEFINITIONS
|
Whenever used in this Agreement, the following words have the meanings set forth below:
“Account” or “Accounts” has the meaning set forth in Section 2.2.
“Affiliate” means, with respect to any entity, any other entity that directly or indirectly controls, is controlled by or under common
control with such entity.
“Agreement” means, collectively, this Custody Agreement, any Exhibits hereto and any other documents incorporated herein by reference.
“Anti-Money Laundering Laws” means all anti-money laundering and counter-terrorist financing laws, rules, regulations, executive orders and
requirements administered by any governmental authority of the United States (including the U.S. Bank Secrecy Act, the U.S.A. PATRIOT Act, and regulations of the U.S. Treasury Department which implement such acts) or any other applicable domestic or
foreign authority with jurisdiction over Customer.
“Assets” has the meaning set forth in Section 2.1(a).
“Authorized Person” has the meaning set forth in Section 3.1.
“BNY” has the meaning set forth in the introductory paragraph.
“Cash” means the money and currency of any jurisdiction which BNY accepts for deposit in an Account.
“Confidential Information” means all information disclosed under this Agreement by one Party to the other Party regarding the disclosing
party’s business and operations.
“Customer” has the meaning set forth in the introductory paragraph.
“Data Terms Website” means http://www.bnymellon.com/products/assetservicing/vendoragreement.pdf or any successor website the address of which is provided by BNY to Customer.
“Effective Date” has the meaning set forth in the introductory paragraph.
“Electronic Access Services” means such services made available by BNY or a BNY Affiliate to Customer to electronically access information
relating to the Accounts and/or transmit Instructions.
“Instructions” means, with respect to this Agreement, instructions issued to BNY by way of (a) one of the following methods (each as and to
the extent specified by BNY as available for use in connection with the services hereunder): (i) the Electronic Access Services; (ii) third-party electronic communication services containing, where applicable, appropriate authorization codes,
passwords or authentication keys, or otherwise appearing on their face to have been transmitted by an Authorized Person or (iii) third-party institutional trade matching utilities used to effect transactions in accordance with such utility’s
customary procedures or (b) such other method as may be agreed upon by the Parties and that appear on their face to have been transmitted by an Authorized Person.
“Market Data” means pricing, valuations or other commercially sourced data applicable to any security. Market Data also includes security
identifiers, bond ratings and classification data.
“Market Data Providers” means vendors and analytics providers and any other Person providing Market Data to BNY.
“Oral Instructions” means, with respect to this Agreement, spoken instructions issued to BNY and reasonably believed by BNY to be from an
Authorized Person.
“Party” or “Parties” has the meaning set forth in the introductory paragraph.
“Person” or “Persons” means any entity or individual.
“Sanctions” means all economic sanctions laws, rules, regulations, executive orders and requirements administered by any governmental
authority of the United States (including the Office of Foreign Assets Control (OFAC) of the U.S. Department of the Treasury) or any other applicable domestic or foreign authority with jurisdiction over Customer.
“Series” means the respective portfolios, if any, of Customer listed on Appendix I to this Agreement. If no portfolios are listed on
Appendix I to this Agreement then a reference to a Series means Customer.
“Sponsor” means Invesco Capital Management LLC, a Delaware limited liability company.
“Standard of Care” has the meaning set forth in Section 12.1.
2
“Tax Obligations” means taxes, withholding, certification and reporting requirements, claims for exemptions or refund, interest, penalties,
additions to tax and other related expenses.
“Third Party Data” has the meaning set forth in Section 7.3(a).
| 2. |
APPOINTMENT OF CUSTODIAN; ACCOUNTS
|
| 2.1 |
Appointment of Custodian
|
| (a) |
Customer hereby appoints BNY as custodian of all Cash to be held under, and in accordance with the terms of, this Agreement (collectively, “Assets”), and BNY hereby accepts such appointment. The
Parties acknowledge and agree that BNY’s duties pursuant to such appointment will be limited solely to those duties expressly undertaken pursuant to this Agreement.
|
| (b) |
Notwithstanding the foregoing, BNY has no obligation:
|
| (i) |
With respect to any Assets until they are actually received in an Account;
|
| (ii) |
To inquire into, make recommendations, supervise or determine the suitability of any transactions affecting any Account or to question any Instructions;
|
| (iii) |
To determine the adequacy of title to, or the validity or genuineness of, any Assets received by it or delivered by it pursuant to this Agreement; or
|
| (iv) |
With respect to any matters related to: the establishment, maintenance operation or termination of Customer; or the offer, sale or distribution of the shares of, or interests in, Customer.
|
| (c) |
Cash held hereunder may be subject to additional deposit terms and conditions issued by BNY from time to time, including rates of interest and deposit account access.
|
| 2.2 |
Establishment of Accounts
|
BNY will establish and maintain a separate account for each Series in which BNY will hold Assets relating to the relevant Series as provided herein (each, an “Account,” and collectively, the “Accounts”). The Account of each Series established under this Agreement shall be maintained separately from the Account of each other Series.
| 3. |
AUTHORIZED PERSONS AND INSTRUCTIONS; ELECTRONIC ACCESS
|
| 3.1 |
Authorized Persons
|
Promptly following the Effective Date, Customer and/or its designee (including any of Customer’s investment managers) will furnish BNY with one or more written lists or other
documentation acceptable to BNY specifying the names and titles of, or otherwise identifying, all Persons authorized to act on behalf of Customer (with respect to a particular
3
Series, if applicable) with respect to this Agreement (each, an “Authorized Person”). Customer will be responsible for keeping such lists
and/or other documentation current, and will update such lists and/or other documentation, as necessary from time to time, pursuant to Instructions.
| 3.2 |
Instructions
|
| (a) |
Except as otherwise expressly provided in this Agreement, BNY will have no obligation to take any action hereunder unless and until it receives Instructions issued in accordance with this Agreement.
|
| (b) |
Customer will be responsible for ensuring that (i) only Authorized Persons issue Instructions to BNY and (ii) all Authorized Persons safeguard and treat with extreme care any user and authorization codes, passwords and authentication keys
used in connection with the issuance of Instructions.
|
| (c) |
Where Customer may or is required to issue Instructions, such Instructions will be issued by an Authorized Person.
|
| (d) |
BNY will be entitled to deal with any Authorized Person until notified otherwise pursuant to Instructions, and will be entitled to act and rely upon any Instruction received by BNY.
|
| (e) |
All Instructions must include all information necessary, and must be delivered using such methods and in such format as BNY may require and be received within BNY’s established cut-off times and otherwise in sufficient time, to enable BNY
to act upon such Instructions.
|
| (f) |
BNY may in its sole discretion decline to act upon any Instructions that do not comply with requirements set forth in Section 3.2(e) or that conflict with applicable law or regulations or BNY’s operating policies and practices, in which
event BNY will promptly notify Customer.
|
| (g) |
Customer acknowledges that while it is not part of BNY’s normal practices and procedures to accept Oral Instructions, BNY may in certain limited circumstances accept Oral Instructions. In such event, such Oral Instructions will be deemed
to be Instructions for purposes of this Agreement. An Authorized Person issuing such an Oral Instruction will promptly confirm such Oral Instruction to BNY in writing. Notwithstanding the foregoing, Customer agrees that the fact that such
written confirmation is not received by BNY, or that such written confirmation contradicts the Oral Instruction, will in no way affect (i) BNY’s reliance on such Oral Instruction or (ii) the validity or enforceability of transactions
authorized by such Oral Instruction and effected by BNY.
|
| (h) |
Customer acknowledges and agrees that it is fully informed of the protections and risks associated with the various methods of transmitting Instructions to BNY and that there may be more secure methods of transmitting Instructions than the
method selected by the sender. Customer agrees that the security procedures, if any, to be followed by Customer and BNY with respect to the transmission and
|
4
| (i) |
authentication of Instructions provide to Customer a commercially reasonable degree of protection in light of its particular needs and circumstances.
|
| 3.3 |
BNY Actions Without Instructions
|
Notwithstanding anything to the contrary set forth in this Agreement, Customer hereby authorizes BNY, without Instructions, to take any administrative or ministerial actions with
respect to the Accounts that it deems reasonably necessary or appropriate to perform its obligations under this Agreement, including the following:
| (a) |
Receive income and other payments due to the Accounts;
|
| (b) |
Endorse for collection checks, drafts or other negotiable instruments received on behalf of the Accounts; and
|
| (c) |
Execute and deliver, solely in its capacity as custodian, certificates, documents or instruments incidental to BNY’s performance under this Agreement.
|
| 3.4 |
Funds Transfers
|
With respect to each Instruction for a Cash transfer, when the Instruction is to credit or pay a party by both a name and a unique numeric or alpha-numeric identifier (e.g., IBAN or
ABA or account number), BNY and any other bank participating in the Cash transfer will be entitled to rely solely on such numeric or alpha-numeric identifier, even if it identifies a party different from the party named. Such reliance on an
identifier will apply to beneficiaries named in the Instruction, as well as any financial institution that is designated in the Instruction to act as an intermediary in such Cash transfer. To the extent permitted by applicable law, the Parties will
be bound by the rules of any transfer system used to effect a Cash transfer under this Agreement.
| 3.5 |
Electronic Access
|
If Customer elects to use the Electronic Access Services in connection with this Agreement, the use thereof will be subject to any terms and conditions contained in a separate
written agreement between the Parties or their Affiliates. If an Authorized Person elects, with BNY’s prior consent, to transmit Instructions through a third-party electronic communications service, BNY will not be responsible or liable for the
reliability or availability of any such service.
| 4. |
AGENTS
|
| 4.1 |
Use of Agents
|
BNY may appoint agents, including BNY Affiliates, on such terms and conditions as it deems appropriate to perform its obligations hereunder. Except as otherwise specifically
provided herein, no such appointment will discharge BNY from its obligations hereunder.
5
| 5. |
TAX MATTERS
|
| 5.1 |
Responsibility for Taxes
|
Customer will be responsible and liable for all Tax Obligations with respect to any Assets held on behalf of Customer and any transaction related thereto.
Customer acknowledges and agrees that BNY and its Affiliates are not tax advisers and will not under any circumstances provide tax advice to Customer. Customer will obtain its own independent tax advice for any tax-related matters.
| 5.2 |
Payments
|
Where BNY receives Instructions to make distributions or transfers out of an Account in order to pay Customer’s third party service providers, Customer
acknowledges that in making such payments BNY is acting in an administrative or ministerial capacity, and not as the payor, for tax information reporting and withholding purposes.
| 6. |
CREDITS AND ADVANCES
|
| 6.1 |
Advances
|
If BNY receives an Instruction that, if processed, would result in an overdraft in an Account, BNY may, in its sole discretion, advance funds in any currency hereunder.
| 6.2 |
Repayment
|
If: (a) BNY has advanced funds to an Account; (b) an overdraft has occurred in an Account (including overdrafts incurred in connection with funds transfers or foreign exchange
transactions) or (c) Customer is for any other reason indebted to BNY, Customer agrees to repay BNY (on demand or upon becoming aware thereof) the amount of such advance, overdraft or indebtedness, plus accrued interest at a rate then charged by BNY
to its institutional custody clients in the relevant currency.
| 6.3 |
Securing Repayment
|
In order to secure repayment of Customer’s obligations and liabilities relating to a Series (whether or not matured) to BNY relating to or arising under this Agreement, and without
limiting BNY’s rights under applicable law or any other agreement, Customer hereby pledges and grants to BNY, and agrees BNY will have to the maximum extent permitted by law, a continuing first lien and security interest in: (a) all of Customer’s and
such Series’ right, title and interest in and to the Account relating to such Series and the Assets now or hereafter held in such Account (including proceeds thereof) and (b) any other property at any time held by BNY relating to such Series;
provided that Customer does not hereby grant a security interest in any securities issued by an affiliate (as defined in Section 23A of the U.S. Federal Reserve Act) of BNY. Customer represents, warrants and covenants that it owns the Assets in the
Accounts, and such other property at any time held by BNY relating to Customer, free and clear of all liens, claims and security interests (except as otherwise acknowledged in writing by BNY), and that the first lien and security interest granted
herein with respect to each Series will be subject to no setoffs, counterclaims or other liens prior to or on a parity with it in favor of any third party (other than specific liens
6
granted preferred status by statute). Customer will take any additional steps required to assure BNY of such priority security interest, including notifying third parties or
obtaining their consent. BNY will be entitled to collect from the relevant Account sufficient Cash for reimbursement. In this regard, BNY will be entitled to all the rights and remedies of a pledgee, secured creditor and/or securities intermediary
under applicable laws, rules and regulations as then in effect as if Customer or the relevant Series is in default.
| 6.4 |
Setoff
|
In addition to the rights of BNY under applicable law or any other agreement, at any time when Customer has not honored any of its obligations to BNY, BNY will have the right to
retain or set-off against such obligations any cash BNY or any BNY Affiliate may directly or indirectly hold with respect to Customer and any obligations (whether or not matured) that BNY or any BNY Affiliate may have with respect to Customer in any
currency; provided however, that BNY provides notice of such action to Customer. Any such cash or obligation relating to Customer may be transferred to BNY and any BNY Affiliate in order to effect the above rights.
| 7. |
STATEMENTS; BOOKS AND RECORDS; THIRD PARTY DATA
|
| 7.1 |
Statements
|
BNY will make available to Customer, through the Electronic Access Services, a monthly statement (or report for such other time period as the Parties may agree upon from time to
time) reflecting all transfers to or from the Accounts during such month and all holdings in the Accounts as of the last business day of such month (or as of such other date(s) as the Parties may agree from time to time). Customer will promptly
review each such statement and, within ninety (90) days of when such statement is made available by BNY, notify BNY of any exception or objection thereto. Notwithstanding the foregoing, Customer may notify BNY of any such exceptions or objections at
any time; provided, however, that BNY will not be responsible or liable for any losses that could have been mitigated had such notice been provided during such ninety (90) day period.
| 7.2 |
Books and Records
|
The books and records directly pertaining to the Accounts which are in the possession of BNY will be the property of Customer. BNY will identify on its books and records the Assets
belonging to Customer with respect to each Series. Customer and its authorized representatives will have the right, at Customer’s own expense and with reasonable prior written notice to BNY, to have reasonable access to those books and records
directly pertaining to the Accounts. Any such access will occur during BNY’s normal business hours and will be subject to BNY’s applicable security policies and procedures. Upon Customer’s reasonable request, copies of those books and records
directly pertaining to the Accounts will be provided by BNY to Customer or its authorized representative.
| 7.3 |
Third Party Data
|
| (a) |
Customer acknowledges that BNY will be receiving, utilizing and relying on Market Data and other data provided by Customer and/or by third parties in connection with its performance of the services hereunder (collectively, “Third Party Data”).
|
7
| (b) |
BNY is entitled to rely without inquiry on all Third Party Data provided to BNY hereunder (and all Instructions related to Third Party Data), and BNY makes no assurances or warranties in relation to the accuracy or completeness of Third
Party Data and will not be responsible or liable for any losses or damages incurred as a result of any Third Party Data that is inaccurate or incomplete. BNY may follow Instructions with respect to Third Party Data, even if such Instructions
direct BNY to override its usual procedures and data sources or if BNY, in performing services for itself or others (including services similar to those performed for Customer), receives different Third Party Data for the same or similar
Assets.
|
| (c) |
Certain Market Data may be the intellectual property of Market Data Providers, which impose additional terms and conditions upon Customer’s use of such Market Data. Such additional terms and conditions can be found on the Data Terms
Website. Customer agrees to those terms and conditions as they are posted on the Data Terms Website from time to time.
|
| 8. |
DISCLOSURES
|
| 8.1 |
Foreign Exchange Transactions
|
In connection with this Agreement, Customer may enter into foreign exchange transactions (including foreign exchange hedging transactions) with BNY or a BNY Affiliate acting as a
principal or otherwise through customary channels. Customer may issue standing Instructions with respect to any such foreign exchange transactions, subject to any rules or limitations that may apply to any foreign exchange facility made available to
Customer. With respect to any such foreign exchange transactions, BNY or such BNY Affiliate is acting as a principal counterparty on its own behalf and is not acting as a fiduciary or agent for, or on behalf of, Customer, a Series, an investment
manager or any Account.
| 8.2 |
Investment of Cash
|
In connection with this Agreement, Customer may issue standing Instructions to invest Cash in one or more sweep investment vehicles. Such investment vehicles may be offered by a
BNY Affiliate or by a client of BNY, and BNY may receive compensation therefrom. By making investment vehicles available, BNY and its Affiliates will not be deemed to have recommended, endorsed or guaranteed any such investment vehicle in any way or
otherwise to have acted as a fiduciary or agent for, or on behalf of, Customer, its investment manager or any Account. BNY will have no liability for any loss incurred on any such investments. Customer understands that Cash may be uninvested if it
is received or reconciled to an Account after the applicable deadline to be swept into Customer’s selected investment vehicle.
| 9. |
REGULATORY MATTERS
|
| 9.1 |
USA PATRIOT Act
|
Section 326 of the U.S. Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (including its implementing
regulations) requires BNY to implement a customer identification program pursuant to
8
which BNY must obtain certain information from Customer in order to verify Customer’s identity prior to establishing an Account. Accordingly, prior to establishing an Account,
Customer will be required to provide BNY with certain information, including Customer’s name, physical address, tax identification number and other pertinent identifying information, to enable BNY to verify Customer’s identity. Customer acknowledges
that BNY cannot establish an Account unless and until BNY has successfully performed such verification.
| 9.2 |
Sanctions; Anti-Money Laundering
|
| (a) |
Throughout the term of this Agreement, Customer: (i) will have in place and will implement policies and procedures designed to prevent violations of Sanctions, including measures to accomplish effective and timely scanning of all relevant
data with respect to its clients (to the extent the Assets are client assets) and with respect to incoming or outgoing assets or transactions relating to this Agreement; (ii) will ensure that neither Customer nor any of its Affiliates,
directors, officers, employees or clients (to the extent the Assets are client assets) is an individual or entity that is, or is owned or controlled by an individual or entity that is: (A) the target of Sanctions or (B) located, organized or
resident in a country or territory that is, or whose government is, the target of Sanctions and (iii) will not, directly or indirectly, use the Accounts in any manner that would result in a violation by Customer or BNY of Sanctions.
|
| (b) |
Customer acknowledges and agrees that, in connection with the services provided by BNY under this Agreement, each of Customer’s authorized participants is not a customer or joint customer with BNY. Customer (and not BNY) has the
responsibility to, and will, fulfill any compliance requirement or obligation with respect to each of its authorized participants under all Anti-Money Laundering Laws. Without limiting any obligation imposed on Customer by Anti-Money
Laundering Laws, throughout the term of this Agreement, Customer will maintain a compliance program with respect to its investors that includes the following: (i) a know-your-customer program in order to understand and verify the identity of
each authorized participant, in accordance with the requirements of the Bank Secrecy Act and the relevant regulations thereunder, (ii) a transaction surveillance and monitoring program, and (iii) a policy for identifying and reporting any
suspicious transactions and/or activities with respect to each authorized participant to the appropriate law enforcement and regulatory authorities and to BNY where related to the services provided by BNY hereunder.
|
| (c) |
Customer will promptly provide to BNY such information as BNY reasonably requests in connection with the matters referenced in this Section 9.2, including information regarding (i) the Accounts, (ii) the Assets and the source thereof,
(iii) the identity of any individual or entity having or claiming an interest therein, and (iv) Customer’s anti-money laundering and Sanctions compliance programs and any related records and/or transaction information, including with respect
to any investor, regardless of whether such request is made under USA PATRIOT Act Section 314(b) (where applicable). Customer will cooperate with BNY and provide assistance reasonably requested by BNY in connection with any anti-money
laundering and terrorist financing or Sanctions inquiries. Prior to delivering to BNY the assets of any authorized participant, Customer will obtain from each such
|
9
| (d) |
authorized participant, and will continue to maintain in effect throughout the term of this Agreement, any consents or waivers that may be required under applicable law in order to comply with the foregoing obligations.
|
| (e) |
BNY may decline to act or provide services in respect of any Account, and take such other actions as it, in its reasonable discretion, deems necessary or advisable, in connection with the matters referenced in this Section 9.2. If BNY
declines to act or provide services as provided in the preceding sentence, except as otherwise prohibited by applicable law or official request, BNY will inform Customer as soon as reasonably practicable.
|
| 10. |
COMPENSATION
|
| 10.1 |
Fees and Expenses
|
In consideration of BNY’s services provided hereunder, Customer will (a) pay to BNY the fees set forth in the agreed upon fee schedule (as such fee schedule may be
amended by mutual agreement between BNY and Customer) and (b) reimburse BNY for any out-of-pocket and incidental expenses incurred by BNY in connection therewith. Unless otherwise agreed by the Parties, such amounts will be payable to BNY within
thirty (30) days of Customer’s receipt of the relevant invoice. Without limiting BNY’s other rights set forth in this Agreement, BNY may charge interest on overdue amounts at a rate then charged by BNY to its institutional custody clients in the
relevant currency.
| 10.2 |
Other Compensation
|
| (a) |
Customer acknowledges that, as part of BNY’s compensation, BNY will earn interest on Cash balances held by BNY (including disbursement balances, balances arising from purchase and sale transactions and when Cash otherwise remains
uninvested) as provided in BNY’s compensation disclosures.
|
| (b) |
Where a processing error has occurred under this Agreement that results in an unintended gain, provided that Customer is put in the same or equivalent position as it would have been in had such processing error not occurred, any such gain
will be solely for the account of BNY without any duty to report such gain to Customer.
|
| 11. |
REPRESENTATIONS, WARRANTIES AND COVENANTS
|
| 11.1 |
BNY
|
| (a) |
BNY represents and warrants that: (a) it is duly organized, validly existing and in good standing in its jurisdiction of organization; (b) it has the requisite corporate power and authority to enter into and to carry out the transactions
contemplated by this Agreement and (c) the individual executing this Agreement on its behalf has the requisite authority to bind BNY to this Agreement.
|
| (b) |
BNY represents and warrants that it is conducting its business in material compliance with laws applicable to the services hereunder, and has obtained
|
10
|
regulatory licenses, approvals and consents necessary to provide the services contemplated herein.
|
| (c) |
BNY represents and warrants that the Agreement has been duly authorized, executed and delivered by BNY and constitutes a valid and legally binding obligation of BNY, enforceable in accordance with its terms, and there is no statute,
regulation, rule, order or judgment binding on it, and no provision of its charter or by-laws, nor of any mortgage, indenture, credit agreement or other contract binding on it or affecting its property, which would prohibit its execution or
performance of this Agreement.
|
| 11.2 |
Customer
|
| (a) |
Customer represents and warrants that: (i) it is duly organized, validly existing and in good standing in its jurisdiction of organization; (ii) it has the requisite corporate power and authority to enter into and to carry out the
transactions contemplated by this Agreement and (iii) the individual executing this Agreement on its behalf has the requisite authority to bind Customer to this Agreement.
|
| (b) |
Customer represents and warrants that all actions taken, or to be taken, by or on behalf of Customer in connection with establishing, maintaining, operating or terminating Customer (including, any offer, sale or distribution of the shares
of, or interest in, Customer) shall be done in compliance with all applicable U.S. state and federal securities laws and regulations and all other applicable laws and regulations of all applicable jurisdictions.
|
| (c) |
Customer represents and warrants that this Agreement has been duly authorized, executed and delivered by the Customer, constitutes a valid and legally binding obligation of the Customer, enforceable in accordance with its terms, and there
is no statute, regulation, rule, order or judgment binding on it, and no provision of its charter or by-laws, nor of any mortgage, indenture, credit agreement or other contract binding on it or affecting its property, which would prohibit its
execution or performance of this Agreement
|
| 12. |
LIABILITY
|
| 12.1 |
Standard of Care
|
In performing its duties under this Agreement, BNY will exercise the standard of care and diligence that a professional custodian would observe in these affairs taking into account
the prevailing rules, practices, procedures and circumstances in the relevant market and shall perform its duties without negligence, fraud, bad faith or willful misconduct (the “Standard of Care”). BNY shall not be absolved of liability for any of
its acts or omissions
11
in connection with any services performed pursuant to this Agreement if such actions or omissions failed to satisfy the Standard of Care set forth in the preceding sentence.
| 12.2 |
Limitation of Liability
|
| (a) |
BNY’s liability arising out of or relating to this Agreement will be limited solely to those direct damages that are caused by BNY’s failure to perform its obligations under this Agreement in accordance with the Standard of Care. In no
event will BNY or Customer be liable for any indirect, incidental, consequential, exemplary, punitive or special losses or damages, or for any loss of revenues, profits or business opportunity, arising out of or relating to this Agreement
(whether or not foreseeable and even if BNY or Customer has been advised of the possibility of such losses or damages).
|
| (b) |
Notwithstanding anything to the contrary set forth in this Agreement, in no event will BNY be liable for any losses or damages arising out of any of the following:
|
| (i) |
Customer’s or an Authorized Person’s decision to invest in or hold Assets in any particular country, including any losses or damages arising out of or relating to: (A) the financial infrastructure of a country; (B) a country’s prevailing
custody and settlement practices; (C) nationalization, expropriation or other governmental actions; (D) a country’s regulation of the banking or securities industry; (E) currency and exchange controls, restrictions, devaluations,
redenominations, fluctuations or asset freezes; (F) laws, rules, regulations or orders that at any time prohibit or impose burdens or costs on the transfer of Assets to, by or for the account of Customer or (G) market conditions which affect
the orderly execution of securities transactions or affect the value of securities;
|
| (ii) |
BNY’s reliance on Instructions;
|
| (iii) |
For any matter with respect to which BNY is required to act only upon the receipt of Instructions, (A) BNY’s failure to act in the absence of such Instructions or (B) Instructions that are late or incomplete or do not otherwise satisfy the
requirements of Section 3.2(e), whether or not BNY acted upon such Instructions;
|
| (iv) |
BNY receiving or transmitting any data to or from Customer or any Authorized Person via any non-secure method of transmission or communication selected by Customer;
|
| (v) |
Customer’s or an Authorized Person’s decision to hold Cash in any currency; or
|
| (vi) |
The insolvency of any Person.
|
| (c) |
If BNY is in doubt as to any action it should or should not take, either pursuant to, or in the absence of, Instructions, BNY may obtain the advice of either reputable counsel of its own choosing at its own expense or counsel to Customer,
and BNY
|
12
| (d) |
will not be liable for acting in accordance with such advice so long as its actions are consistent with the Standard of Care.
|
| 12.3 |
Force Majeure
|
BNY will not be responsible or liable for any failure or delay in the performance of its obligations under this Agreement to the extent caused, directly or
indirectly, by any event beyond its reasonable control, including acts of God, strikes or other labor disputes, work stoppages, acts of war, terrorism, general civil unrest, governmental or military actions, legal constraint or the interruption, loss
or malfunction of utilities or communications or computer systems. BNY will promptly notify Customer upon the occurrence of any such event and will use commercially reasonable efforts to minimize its effect.
| 12.4 |
Indemnification
|
Subject to the limitations set forth in Section 15.14, Customer will indemnify and hold harmless BNY from and against all losses, costs, expenses, damages and liabilities (including
reasonable counsel fees and expenses) incurred by BNY arising out of or relating to BNY’s performance under this Agreement, except to the extent resulting from BNY’s failure to perform its obligations under this Agreement in accordance with the
Standard of Care. The Parties agree that the foregoing will include reasonable counsel fees and expenses incurred by BNY in its successful defense of claims that are asserted by Customer against BNY arising out of or relating to BNY’s performance
under this Agreement. Any obligations of Customer under this Section 12.4 with respect to a particular Series will not be satisfied out of the assets of another Series.
| 13. |
CONFIDENTIALITY
|
| 13.1 |
Confidentiality Obligations
|
Each Party agrees to use the Confidential Information of the other Party solely to accomplish the purposes of this Agreement and, except in connection with such purposes or as
otherwise permitted herein, not to disclose such information to any other Person without the prior written consent of the other Party. Notwithstanding the foregoing, BNY may: (a) use Customer’s Confidential Information in connection with certain
functions performed on a centralized basis by BNY, its Affiliates and joint ventures and their service providers (including audit, accounting, risk, legal, compliance, sales, administration, product communication, relationship management, compilation
and analysis of customer-related data and storage); (b) disclose such information to its Affiliates and joint ventures and to its and their service providers who are subject to confidentiality obligations and need to know such information in
connection with the performance of BNY’s duties under this Agreement and (c) store the names and business contact information of Customer’s employees and representatives relating to this Agreement on the systems or in the records of its Affiliates
and joint ventures and its and their service providers. In addition, BNY may aggregate information regarding Customer and the Accounts on an anonymized basis with other similar client data for BNY’s and its Affiliates’ reporting, research, product
development and distribution, and marketing purposes.
13
| 13.2 |
Exceptions
|
The Parties’ respective obligations under Section 13.1 will not apply to any such information: (a) that is, as of the time of its disclosure or thereafter becomes, part of the
public domain through a source other than the receiving Party; (b) that was known to the receiving Party as of the time of its disclosure and was not otherwise subject to confidentiality obligations; (c) that is independently developed by the
receiving Party without reference to such information; (d) that is subsequently learned from a third party not known to be under a confidentiality obligation to the disclosing Party or (e) that is required to be disclosed pursuant to applicable law,
rule, regulation, requirement of any law enforcement agency, court order or other legal process or at the request of a regulatory authority, provided, however, that the Party making disclosure pursuant to a court order, legal process or at the
request of a regulatory authority shall first notify the other Party (to the extent permissible).
| 14. |
TERM AND TERMINATION
|
| 14.1 |
Term
|
The term of this Agreement will commence on the Effective Date and will continue in effect until terminated in accordance with the provisions herein.
| 14.2 |
Termination
|
| (a) |
Each Party may terminate this Agreement by giving to the counter-Party a notice in writing specifying the date of such termination, which will be not less than ninety (90) days after the date of such notice.
|
(b) Either Party hereto may terminate this Agreement immediately
by sending notice thereof to the other Party upon the happening of any of the following: (i) a Party commences as debtor any case or proceeding under any bankruptcy, insolvency or similar law, or there is commenced against such Party any such case or
proceeding; (ii) a Party commences as debtor any case or proceeding seeking the appointment of a receiver, conservator, trustee, custodian or similar official for such Party or any substantial part of its property or there is commenced against the
Party any such case or proceeding; or (iii) a Party makes a general assignment for the benefit of creditors.
| 14.3 |
Effect of Termination
|
Upon termination hereof, Customer will pay to BNY such compensation as may be due to BNY, and will reimburse BNY for other amounts payable or reimbursable to BNY hereunder, through
the date of termination. BNY will follow such reasonable Instructions as Customer issues concerning the transfer of custody of records, Assets and other items; provided that (a) BNY will have no responsibility or liability for shipping and insurance
costs associated therewith and (b) full payment has been made to BNY of its compensation, costs, expenses and other amounts to which it is entitled hereunder. If any Assets remain in any Account after termination, BNY may deliver to Customer such
Assets.
14
| 14.4 |
Survival
|
Any and all provisions of this Agreement which by their nature or effect are required or intended to be observed, kept or performed after the expiration or termination of this
Agreement will survive the expiration or any termination of this Agreement and remain binding upon and for the Parties’ benefit, including Section 11 (Representations, Warranties and Covenants); Section 12 (Liability); Section 13 (Confidentiality);
Section 14.3 (Effect of Termination); Section 14.4 (Survival) and Section 15.3 (Governing Law/Forum).
| 15. |
GENERAL
|
| 15.1 |
Assignment
|
Neither Party may, without the other Party’s prior written consent, assign any of its rights or delegate any of its duties under this Agreement (whether by change of control,
operation of law or otherwise); provided, however that BNY may, without the prior written consent of Customer, assign this Agreement or any of its rights, or delegate any of its duties hereunder: (a) to any BNY Affiliate; (b) to any successor to the
business of BNY to which this Agreement relates, in which event BNY agrees to provide notice of such successor to Customer or (c) as otherwise permitted in this Agreement; provided further that any entity to which this Agreement is assigned by BNY
without the prior written consent of Customer pursuant to a foregoing item (a), (b) or (c) will satisfy the requirements for serving as a custodian for a registered investment company. Any purported assignment or delegation by a Party in violation of
this provision will be voidable at the option of the other Party. This Agreement will be binding upon, and inure to the benefit of, the Parties and their respective permitted successors and assigns.
| 15.2 |
Amendment
|
This Agreement may be amended or modified only in a written agreement signed by an authorized representative of each Party. For purposes of the foregoing, email exchanges between
the Parties will not be deemed to constitute a written agreement.
| 15.3 |
Governing Law/Forum
|
| (a) |
The substantive laws of the state of New York (without regard to its conflicts of law provisions) will govern all matters arising out of or relating to this Agreement, including the establishment and maintenance of the Accounts and for
purposes of the Uniform Commercial Code and all issues specified in Article 2(1) of the Hague Securities Convention.
|
| (b) |
Each Party irrevocably agrees that all legal actions or proceedings brought by it against the other Party arising out of or relating to this Agreement will be brought solely and exclusively before the state or federal courts situated in
New York City, New York. Each Party irrevocably submits to personal jurisdiction in such courts and waives any objection which it may now or hereafter have based on improper venue or forum non conveniens.
The Parties hereby unconditionally waive, to the fullest extent permitted by applicable law, any right to a jury trial with respect to any such actions or proceedings.
|
15
| 15.4 |
Business Continuity/Disaster Recovery
|
BNY will implement and agrees to maintain for the term of the Agreement business continuity and disaster recovery plans designed to minimize interruptions of service and ensure
recovery of systems and applications used to provide the services under this Agreement. Such plans will cover the facilities, systems, applications and employees that are critical to the provision of the services hereunder, and will be tested at
least annually to validate whether the recovery strategies, requirements, and protocols are viable and sustainable.
| 15.5 |
Non-Fiduciary Status
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Customer hereby acknowledges and agrees that BNY is not a fiduciary by virtue of accepting and carrying out its obligations under this Agreement and has not accepted any fiduciary
duties, responsibilities or liabilities with respect to its services hereunder, including with respect to the management, investment advisory or sub-advisory functions of Customer.
| 15.6 |
Notices
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Other than routine communications in the ordinary course of providing or receiving services hereunder (including Instructions), notices given hereunder will be: (a) addressed to BNY
or Customer at the address set forth on the signature page (or such other address as either Party may designate in writing to the other Party) and (b) sent by hand delivery, by certified mail, return receipt requested, or by overnight delivery
service, in each case with postage or charges prepaid. All notices given in accordance with this Section will be effective upon receipt.
| 15.7 |
Entire Agreement
|
This Agreement constitutes the sole and entire agreement among the Parties with respect to the matters dealt with herein, and merges, integrates and supersedes all prior and
contemporaneous discussions, agreements and understandings between the Parties, whether oral or written, with respect to such matters.
| 15.8 |
No Third Party Beneficiaries
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This Agreement is entered into solely between, and may be enforced only by, the Parties. Each Party intends that this Agreement will not, and no provision of this Agreement will be
interpreted to, benefit, or create any right or cause of action in or on behalf of, any party or entity other than the Parties.
| 15.9 |
Counterparts/Facsimile
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This Agreement may be executed in any number of counterparts, each of which will be deemed an original, and said counterparts when taken together will constitute one and the same
instrument and may be sufficiently evidenced by one set of counterparts. This Agreement may also be executed and delivered by facsimile or email with confirmation of delivery and/or receipt.
16
| 15.10 |
Interpretation
|
The terms and conditions of this Agreement are the result of negotiations between the Parties. The Parties intend that this Agreement will not be construed in favor of or against a
Party by reason of the extent to which such Party or its professional advisors participated in the preparation or drafting of this Agreement.
| 15.11 |
No Waiver
|
No failure or delay by a Party to exercise any right, remedy or power it has under this Agreement will impair or be construed as a waiver of such right, remedy or power. A waiver
by a Party of any provision or any breach of any provision will not be construed to be a waiver by such Party of such provision in any other instance or any succeeding breach of such provision or a breach of any other provision. All waivers will be
in writing and signed by an authorized representative of the waiving Party.
| 15.12 |
Headings
|
All section and subsection headings in this Agreement are included for convenience of reference only and will not be considered in the interpretation of the scope or intent of any
provision of this Agreement.
| 15.13 |
Severability
|
If a court of competent jurisdiction determines that any provision of this Agreement is illegal or invalid for any reason, such illegality or invalidity will not affect the validity
of the remainder of this Agreement. In such case, the Parties will negotiate in good faith to replace each illegal or invalid provision with a valid, legal and enforceable provision that fulfills as closely as possible the original intent of the
Parties.
| 15.14 |
Limitations of Liability of the Shareholders
|
It is expressly acknowledged and agreed that the obligations of the Customer hereunder shall not be binding upon any shareholder, Sponsor, officer, employee or agent of the Customer
personally, but shall bind only the trust property of the Customer as provided in its Agreement and Declaration of Trust and By-Laws. This Agreement has been duly authorized, executed and delivered by the Customer and neither such authorization nor
such execution and delivery shall be deemed to have been made by any of them individually or to impose any liability on any of them personally, but shall bind only the trust property of the Customer as provided in its Agreement and Declaration of
Trust and By-Laws.
| 15.15 |
Limitations of Liability of Sponsor
|
It is expressly understood and agreed by the Parties that the to the extent that the Agreement has been executed by Sponsor on behalf of Customer that (a) this Agreement is executed
and delivered on behalf of Customer by Sponsor, not individually or personally, but solely as Customer’s Sponsor in the exercise of the powers and authority conferred and vested in it; (b) the representations, covenants, undertakings and agreements
herein made by Customer are made and intended not as personal
17
representations, undertakings and agreements by Sponsor but are made and intended for the purpose of binding only Customer; (c) nothing herein contained shall be construed as
creating any liability on Sponsor, individually or personally, to perform any covenant of Customer either expressed or implied contained herein, all such liability, if any, being expressly waived by the Parties hereto and by any person claiming by,
through or under the parties hereto; and (d) under no circumstances shall Sponsor be personally liable for the payment of any of Customer’s indebtedness or expenses or be liable for the breach or failure of any obligation, duty, representation,
warranty or covenant made or undertaken by Customer under this Agreement or any other related document.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.
THE BANK OF NEW YORK MELLON Invesco Galaxy Solana ETF
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By: /s/ Gerard Connors
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By: /s/ Kelli Gallegos
|
|
Name: Gerard Connors
|
Name: Kelli Gallegos
|
|
Title: Senior Vice President
|
Title: Principal Financial and Accounting Officer – Investment Pools
|
|
Date: October 10, 2025
|
Date: September 26, 2025
|
|
Address for Notice:
|
Address for Notice:
|
|
THE BANK OF NEW YORK MELLON
240 Greenwich Street
New York, New York 10286
Attention: ETF Operations
|
INVESCO GALAXY SOLANA ETF
3500 Lacey Road, Suite 700
Downers Grove, IL 60515
Attention: Head of Legal, US ETFs
|
18
APPENDIX I
19
 |
Exhibit 10.6
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FUND ADMINISTRATION AND ACCOUNTING AGREEMENT
THIS AGREEMENT is made as of September 26, 2025 by and between Invesco Galaxy Solana ETF (hereinafter the “Trust”), a Delaware statutory trust, having its
principal office and place of business at 3500 Lacey Road, Suite 700, Downers Grove, IL 60515, The Bank of New York Mellon, a New York corporation authorized to do a banking business (“BNY”) , and solely with
respect to Sections 6, 8, 12 and 19 hereof, Invesco Capital Management LLC, a Delaware limited liability company having its principal office and place of business at 3500 Lacey Road, Suite 700, Downers Grove, Illinois 60515 (the “Sponsor”).
W I T N E S S E T H :
WHEREAS, the Trust desires to retain BNY to provide the services described herein, and BNY is willing to provide such services, all as more fully set forth below;
NOW, THEREFORE, in consideration of the mutual promises and agreements contained herein, the parties hereby agree as follows:
| 1. |
Definitions.
|
Whenever used in this Agreement, unless the context otherwise requires, the following words shall have the meanings set forth below:
“1933 Act” means the Securities Act of 1933, as amended.
“1934 Act” means the Securities Exchange Act of 1934, as amended.
“Anti-Money Laundering Laws” means all anti-money laundering and counter-terrorist financing laws, rules, regulations, executive orders
and requirements administered by any governmental authority of the United States (including the U.S. Bank Secrecy Act, the U.S.A. PATRIOT Act, and regulations of the U.S. Treasury Department which implement such acts) or any other applicable domestic
or foreign authority over the Trust.
“Authorized Person” shall mean each person, whether or not an officer or an employee of the Trust, duly authorized to execute this
Agreement and to give Instructions on behalf of the Trust as set forth in Exhibit A hereto and each Authorized Person’s scope of authority may be limited
by setting forth such limitation in a written document signed by both parties hereto. From time to time the Trust may deliver a new Exhibit A to add or delete
any person and BNY shall be entitled to rely on the last Exhibit A actually received by BNY.
“BNY Affiliate” shall mean any office, branch, or subsidiary of The Bank of New York Mellon Corporation.
“Confidential Information” shall have the meaning given in Section 18 of this Agreement.
“Documents” shall mean such other documents, including but not limited to, resolutions of the Sponsor authorizing the execution, delivery and performance
of this Agreement by the Trust, and opinions of outside counsel, as BNY may reasonably request from time to time, in connection with its provision of services under this Agreement.
“Instructions” shall mean Oral Instructions or written communications actually received by BNY by S.W.I.F.T., tested telex, letter, facsimile
transmission, or other method or system specified by BNY as available for use in connection with the services hereunder, from an Authorized Person or person believed in good faith to be an Authorized Person.
“Net Asset Value” shall mean the per share value of the Trust, calculated in the manner described in the Trust’s Offering Materials.
“Offering Materials” shall mean the Trust’s currently effective prospectus and most recently filed registration statement with the SEC, as applicable,
relating to shares of the Trust.
“Organizational Documents” shall mean certified copies of the Trust’s articles of incorporation, certificate of incorporation, certificate of formation or
organization, declaration of trust, bylaws, limited partnership agreement, memorandum of association, limited liability company agreement, operating agreement, confidential offering memorandum, material contracts, Offering Materials, all SEC
exemptive orders issued to the Trust, required filings or similar documents of formation or organization, as applicable, delivered to and received by BNY.
“Oral Instructions” shall mean oral instructions received by BNY under permissible circumstances specified by BNY, in its sole discretion, as being from
an Authorized Person or person believed in good faith by BNY to be an Authorized Person.
2
“Sanctions” means all economic sanctions laws, rules, regulations, executive orders and requirements administered by any governmental authority of the
United States (including the Office of Foreign Assets Control (OFAC) of the U.S. Department of the Treasury) or any other applicable domestic or foreign authority with jurisdiction over the Trust.
“SEC” means the United States Securities and Exchange Commission.
“Securities Laws” means the 1933 Act and the 1934 Act.
“Shares” means the shares of beneficial interest of any series or class of the Trust.
“Sponsor” shall mean the entity identified by the Trust to BNY as the entity having investment responsibility with respect to the Trust.
2. Appointment.
The Trust hereby appoints BNY as its agent for the term of this Agreement to perform the services described herein and in any related service level agreement as
agreed between the parties for the Trust. BNY hereby accepts such appointment and agrees to perform the duties hereinafter set forth.
3. Representations and Warranties.
(a) The Trust hereby represents and warrants to BNY, which representations and warranties shall be deemed to be continuing, that:
(i) It is duly organized and existing under the laws of the jurisdiction of its organization, with full power to carry on its business as now conducted, to enter into this Agreement and to perform its obligations hereunder;
(ii) This Agreement has been duly authorized, executed and delivered by the Trust in accordance with all requisite action and constitutes a valid and legally binding obligation of the Trust, enforceable in accordance with its
terms;
(iii) The Trust is in good standing and qualified to do business in each jurisdiction in which the nature or conduct of its business requires such qualification.
3
(iv) It is conducting its business in compliance with all applicable laws and regulations, both state and federal, has made and will continue to make all necessary filings including tax filings and has obtained all regulatory
licenses, approvals and consents necessary to carry on its business as now conducted; there is no statute, regulation, rule, order or judgment binding on it and no provision of its Organizational Documents, nor of any mortgage, indenture, credit
agreement or other contract binding on it or affecting its property which would prohibit its execution or performance of this Agreement;
(v) The Trust will maintain policies and procedures reasonably designed to ensure that all investments for the Trust are conducted in compliance with anti-corruption laws, Anti-Money Laundering Laws, and Sanctions applicable to
the Trust. The Trust shall cooperate with BNY and provide assistance reasonably requested by BNY in connection with any anti-money laundering, terrorist financing or sanctions-related inquiries.
(vi) The method of valuation of the assets of the Trust and the method of computing the Net Asset Value shall be as set forth in the Offering Materials of the Trust. To the extent the performance of any services described in
Schedule I attached hereto by BNY in accordance with the then effective Offering Materials for the Trust would violate any applicable laws or regulations, the Trust shall, shall, to the extent it is aware of such violation(s), immediately so notify
BNY in writing and thereafter shall either furnish BNY with the appropriate values of Trust assets, net asset value or other computation, as the case may be, or, instruct BNY in writing to value Trust assets and/or compute Net Asset Value or other
computations in a manner the Trust specifies in writing, and either the furnishing of such values or the giving of such instructions shall constitute a representation by the Trust that the same is consistent with all applicable laws and regulations
and with its Offering Materials, all subject to confirmation by BNY as to its capacity to act in accordance with the foregoing;
(vii) Each person named on Exhibit A hereto is duly authorized by the Trust to be an Authorized Person hereunder;
(viii) It
has implemented, and is acting in accordance with, procedures reasonably designed to ensure that it will disseminate to all market participants, other than
4
Authorized Participants (as defined in its Offering Materials), each calculation of net asset value provided by BNY hereunder to Authorized Participants at the time BNY provides
such calculation to Authorized Participants;
(ix) Without limiting the provisions of Section 18 herein, the Trust shall treat as confidential the terms and conditions of this Agreement and shall not disclose nor authorize disclosure thereof to any other person, except (i)
to its employees, regulators, examiners, internal and external accountants, auditors, and counsel, (ii) as disclosed as part of the Trust’s registration statement or in the Offering Materials of the Trust with the prior approval of BNY, (iii) to
any other person when required by a court order or legal process, or (iv) whenever advised by its counsel that it would be liable for a failure to make such disclosure. The Trust shall instruct its employees, regulators, examiners, internal and
external accountants, auditors, and counsel who may be afforded access to such information of the Trust’s obligations of confidentiality hereunder; and
(x) To the extent that it is material to any party’s performance under this Agreement, the Trust shall promptly notify BNY in writing of any and all legal proceedings or securities investigations filed or commenced against any
Fund, the Sponsor or the Board.
(b) BNY hereby represents and warrants to the Trust, which representations and warranties shall be deemed to be continuing, that:
(i) It is organized and existing under the laws of the jurisdiction of its organization, with full power to carry on its business as now conducted, to enter into this Agreement and to perform its obligations hereunder;
(ii) This Agreement has been duly authorized, executed and delivered by BNY and constitutes a valid and legally binding obligation of BNY, enforceable in accordance with its terms;
(iii) BNY is in good standing and qualified to do business in each jurisdiction in which the nature or conduct of its business requires such qualification;
5
(iv) BNY is conducting its business in compliance with, and shall comply with, laws and regulations, whether state, federal or by any other regulatory body having jurisdiction over BNY applicable to the provision of the
services hereunder, has made and will continue to make all necessary filings including tax filings and has obtained all regulatory licenses, approvals and consents that BNY believes are necessary to provide the services hereunder. BNY has
compliance policies and procedures reasonably designed to prevent violations by BNY of federal securities laws, and it will reasonably cooperate with, including making its personnel available, and provide such information as may reasonably be
requested to the Trust or the Trust’s Chief Compliance Officer (“CCO”). In addition, as reasonably requested by the CCO, BNY will provide summary procedures and updates, as applicable, to the CCO and the Trust concerning its compliance with
applicable laws and regulations;
(v) As of the Effective Date and thereafter during the term of this Agreement, that (i) in connection with the services provided under this Agreement, neither BNY nor any BNY Affiliate, nor any officer or employee of BNY, has
taken or shall take any action or make any payment in violation of, or which may cause BNY, any BNY Affiliate, the Trust, or the Sponsor, to be in violation of any applicable anti-corruption laws in any jurisdictions where it conducts business,
including without limitation the provisions of the U.S. Foreign Corrupt Practices Act of 1977, as amended, and of the U.K. Bribery Act (collectively, “FCPA”); (ii) no part of any monies or consideration paid hereunder shall accrue for the benefit
of any official of the government of any country or any agency thereof; (iii) BNY’s global compliance program for FCPA includes a written global policy supplemented by companywide and business specific internal guidance and procedures, a designated
anti-corruption compliance officer, anticorruption risk assessments and internal controls, as well as internal training and a regular auditing/monitoring program; (iv) BNY’s global FCPA policy and related gifts and entertainment policies require
that no employee or anyone else acting on behalf of BNY offers, promises, gives, solicits or accepts any payment or other thing of value, directly or indirectly, to or from any government official, or any other party in a commercial transaction,
with the purpose of obtaining or retaining business, to receive any business advantage or to direct business to any person; and (v) the compliance program BNY has in place is designed to adequately address the FCPA risks in its global operations.
At the Trust’s request, not more than once annually, BNY shall certify in writing that, to the best of its knowledge, it has complied in all material respects with this Section
6
3(b)(iv). BNY does not undertake any responsibility or liability with respect to FCPA compliance measures that the Trust may be required to undertake under applicable law; and
(vi) BNY will notify and consult with the Trust if it decides to materially change its accounting platform, downstream connectivity to such accounting platform, client service delivery teams or locations of such teams, data
format and/or data delivery format, or any other material aspect of the way that BNY provides services to the Trust under this Agreement prior to making such change, and will provide sufficient notice to the Trust to evaluate and consider such
changes.
4. Delivery of Documents.
The Trust shall promptly provide, deliver, or cause to be delivered from time to time, to BNY the Trust’s Organizational Documents, a copy of any and all SEC exemptive orders issued
to the Trust, and Documents and other materials used in the distribution of Shares and all amendments thereto as may be necessary for BNY to perform its duties hereunder. BNY shall not be deemed to have notice of any information (other than
information supplied by BNY) contained in such Organizational Documents, Documents or other materials until they are actually received by BNY.
5. Duties and Obligations of BNY.
(a) Subject to the direction of the Sponsor and the provisions of this Agreement, BNY shall provide to the Trust the administrative services and the valuation and computation services listed on Schedule I attached hereto.
(b) In performing hereunder, BNY shall provide, at its expense, office space, facilities, equipment and personnel.
(c) BNY shall not provide any services relating to the management, investment advisory or sub-advisory functions of the Trust, distribution of shares of the Trust, maintenance of the Trust’s financial records, other than those
listed in Schedule I attached hereto, or other services normally performed by the Trust’s counsel or independent auditors and the services provided by BNY do not constitute, nor shall they be construed as constituting, legal advice or the provision
of legal services for or on behalf of the Trust or any other person, and the Trust acknowledges that BNY does not provide public accounting or auditing services or advice and will not be making
7
any tax filings, or doing any tax reporting on its behalf, other than those specifically agreed to hereunder. The scope of services provided by BNY under this Agreement shall not
be increased as a result of new or revised regulatory or other requirements that may become applicable with respect to the Trust, unless the parties hereto expressly agree in writing to any such increase in the scope of services.
(d) The Trust shall cause its officers, advisors, Sponsor, legal counsel, independent accountants, current administrator (if any), transfer agent, and any other service provider to cooperate with BNY and to provide BNY, upon
request, with such information, documents and advice relating to the Trust as is within the possession or knowledge of such persons, and which in the opinion of BNY, is necessary in order to enable BNY to perform its duties hereunder. In
connection with its duties hereunder, BNY shall not be responsible for, under any duty to inquire into, or be deemed to make any assurances with respect to the accuracy, validity or propriety of any information, documents or advice provided to BNY
by any of the aforementioned persons. BNY shall not be liable for any loss, damage or expense resulting from or arising out of the failure of the Trust to cause any information, documents or advice to be provided to BNY as provided herein and
shall be held harmless by the Trust when acting in reasonable reliance upon such information, documents or advice relating to the Trust, as long as BNY either utilized such information or documents provided by the Trust as contemplated by this
Agreement or was instructed otherwise by an Authorized Person. All fees or costs charged by such persons shall be borne by the Sponsor. Further, in the event that any services performed by BNY hereunder rely, in whole or in part, upon information
obtained from a third party service utilized or subscribed to by BNY which BNY in its reasonable judgment deems reliable, BNY shall not have any responsibility or liability for, under any duty to inquire into, or deemed to make any assurances with
respect to, the accuracy or completeness of such information, as long as BNY either utilized such third-party information as contemplated by this Agreement or was instructed otherwise by an Authorized Person.
(e) Nothing in this Agreement shall limit or restrict BNY, any BNY Affiliate or any officer or employee thereof from acting for or with any third parties, and providing services similar or identical to some or all of the
services provided hereunder.
(f) The Trust shall furnish BNY with any and all instructions, explanations,
8
information, specifications and documentation deemed necessary by BNY in the performance of its duties hereunder, including, without limitation, the amounts or written formula for
calculating the amounts and times of accrual of Trust liabilities and expenses. BNY shall not be required to include as Trust liabilities and expenses, nor as a reduction of net asset value, any accrual for any federal, state, or foreign income
taxes unless the Trust shall have specified to BNY in Instructions the precise amount of the same to be included in liabilities and expenses or used to reduce net asset value. The Trust shall also furnish BNY with valuations for assets of the Trust
if BNY notifies the Trust that same are not available to BNY from a pricing service utilized, or subscribed to, by BNY which the Trust directs BNY to utilize, and which BNY in its judgment deems reliable at the time such information is required for
calculations hereunder. At any time and from time to time, the Trust also may furnish BNY with valuations for assets of the Trust and instruct BNY in Instructions to use such information in its calculations hereunder. BNY shall at no time be
required or obligated to commence or maintain any utilization of, or subscriptions to, any pricing service. In no event shall BNY be required to determine, or have any obligations with respect to, whether a market price represents any fair or true
value, nor to adjust any price to reflect any events or announcements, including, without limitation, those with respect to the issuer thereof, it being agreed that all such determinations and considerations shall be solely for the Trust.
(g) BNY may apply to an Authorized Person of the Trust for Instructions with respect to any matter arising in connection with BNY’s performance hereunder, and, in the absence of gross negligence, BNY shall not be liable for any
action taken or omitted to be taken by it in good faith in accordance with such Instructions Such application for Instructions may, at the option of BNY, set forth in writing any action proposed to be taken or omitted to be taken by BNY with
respect to its duties or obligations under this Agreement and the date on and/or after which such action shall be taken. In the absence of gross negligence, BNY shall not be liable for any action taken or omitted to be taken in good faith and in
accordance with a proposal included in any such application on or after the date specified therein unless, prior to taking or omitting to take any such action, BNY has received Instructions from an Authorized Person in response to such application
specifying the action to be taken or omitted.
(h) BNY may consult with counsel to the Trust and shall be fully protected with respect to anything done or omitted by it provided that BNY acts in good faith without negligence, fraud, bad faith or willful misconduct in
accordance with the advice or opinion of such counsel
9
and has consulted with an Authorized Person and received authorization from such Authorized Person regarding BNY’s proposed course of action or non-action specific to the Trust.
(i) Notwithstanding any other provision contained in this Agreement or Schedule I attached hereto, BNY shall have no duty or obligation with respect to, including, without limitation, any duty or obligation to determine, or
advise or notify the Trust of: (i) the taxable nature of any distribution or amount received or deemed received by, or payable to, the Trust, (ii) the taxable nature or effect on the Trust or its shareholders of any corporate actions, class
actions, tax reclaims, tax refunds or similar events, (iii) the taxable nature or taxable amount of any distribution or dividend paid, payable or deemed paid, by the Trust to its shareholders; or (iv) the effect under any federal, state, or foreign
income tax laws of the Trust making or not making any distribution or dividend payment, or any election with respect thereto.
(j) BNY shall have no duties or responsibilities whatsoever except such duties and responsibilities as are specifically set forth in this Agreement and Schedule I attached hereto, any service level document agreed to with
respect to the services to be provided to the Trust, and in any applicable laws, rules and regulations applicable to the provision of services described therein, and no covenant or obligation shall be implied against BNY in connection with this
Agreement.
(k) BNY, in performing the services required of it under the terms of this Agreement, shall be entitled to rely fully on the accuracy and validity of any and all Instructions, explanations, information, specifications,
Documents and documentation furnished to it by the Trust, and shall have no duty or obligation to review the accuracy, validity or propriety of such Instructions, explanations, information, specifications, Documents or documentation, including,
without limitation, evaluations of assets; the amounts or formula for calculating the amounts and times of accrual of the Trust’s liabilities and expenses; the amounts receivable and the amounts payable on the sale or purchase of Trust assets; and
amounts receivable or amounts payable for the sale or redemption of Trust Shares effected by or on behalf of the Trust. BNY’s computations hereunder will rely upon information, including, without limitation, bid, offer or market values of
securities or other assets of the Trust, or accruals of interest or earnings thereon, from a pricing or similar service utilized, or subscribed to, by BNY which the Trust directs BNY to utilize. BNY shall not be responsible for, under any duty to
inquire into, or deemed to make any assurances with
10
respect to, the accuracy or completeness of such information. Without limiting the generality of the foregoing, BNY shall not be required to inquire into any valuation of any Trust
assets by the Trust or any third party described in this sub-section (k) even though BNY in performing services similar to the services provided pursuant to this Agreement for others may receive different valuations of Trust assets.
(l) BNY, in performing the services required of it under the terms of this Agreement, shall not be responsible for determining whether any interest accruable to the Trust is or will be actually paid, but will accrue such
interest until otherwise instructed by the Trust.
(m) Subject to its duties under this Agreement to maintain and implement DR Plans (as defined below in Section 23), BNY shall not be responsible for damages (including without limitation damages caused by delays, failure,
errors, interruption or loss of data) which occurring directly or indirectly by reason of circumstances beyond its reasonable control in the performance of its duties under this Agreement (a “Force Majeure Event”), including, without limitation,
labor difficulties within or without BNY, mechanical breakdowns, flood or catastrophe, acts of God, failures of transportation, interruptions, loss, or malfunctions of utilities, action or inaction of civil or military authority, national
emergencies, public enemy, war, terrorism, riot, sabotage, non-performance by a third party, failure of the mails, communications, computer (hardware or software) services, or functions or malfunctions of the internet, firewalls, encryption systems
or security devices caused by any of the above; provided, however, that in the event of a failure to perform, BNY shall use its commercially reasonable efforts to resume performance and to mitigate the effects of any such failure to perform or to
mitigate the damages contemplated by this section 5(m) where it is reasonably able to do so and further provided that BNY shall be liable for any losses to a Fund to the extent that BNY fails to maintain a DR Plan as contemplated in Section 23 of
this Agreement and such failure to maintain a plan caused a loss to a Fund. If BNY is prevented from carrying out its obligations under this Agreement as a result of a Force Majeure Event for a period of 30 days, the Trust may terminate this
Agreement by giving BNY not less than 30 days’ notice, without prejudice to any of the rights of any party accrued prior to the date of termination; provided, however, that if the Force Majeure Event is a regional wide or market wide event that has
similarly affected substantially all other providers of services to funds substantially similar to the services provided hereunder in such region or market, the Trust’s termination right shall only arise at such time that two (2) or more of such
providers are reasonably
11
able and have begun to recommence the provision of such services. If BNY recommences the provision of the affected services in all material respects prior to the exercise by the
Trust of its termination right, such termination right shall lapse if BNY gives notice to the Trust that it has done so (and it has in fact so recommenced the provision of services) and the Trust has not already provided notice of termination prior
to such notice by BNY that it has recommenced the services in all material respects. BNY shall not be responsible for delays or failures to supply the information or services specified in this Agreement where such delays or failures are caused by the
failure of any person(s) other than BNY to supply any instructions, explanations, information, specifications or documentation deemed necessary by BNY in the performance of its duties under this Agreement.
(n) It is understood and agreed by the parties hereto that under no circumstances will the services performed by BNY pursuant to this Agreement include any service, function or activity that would constitute a “virtual
currency business activity” for purposes of the regulations issued by the Superintendent of the New York State Department of Financial Services (23 N.Y.C.R.R. Part 200).
(o) BNY shall provide internally, or shall enter into and shall maintain in effect with appropriate parties one or more agreements making reasonable provisions for emergency use of electronic data processing equipment to the
extent appropriate equipment is available. In the event of equipment failures, BNY shall, at no additional expense to the Trust, take reasonable steps to minimize service interruptions. Provided BNY has acted with the reasonable care and due
diligence of persons acting in a similar capacity and maintains the DR Plans contemplated in Section 23 of this Agreement and further provided such loss of data or service interruption caused by equipment failure is not directly caused by BNY’s
failure to meet the Standard of Care set forth in Section 7 of this Agreement in the performance of its duties under this
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Agreement, BNY shall have no liability with respect to the loss of data or service interruptions caused by equipment failure.
(p) BNY shall use commercially reasonable efforts to develop modifications to the method of delivery of services provided hereunder and to the systems utilized in connection therewith to keep pace with prevailing industry
practices for its fund accounting clients generally. Subject to Section 25 below, in the event that BNY proposes a change to or an increase in the scope of the services provided to its fund accounting clients generally, including a change to keep
pace with prevailing market practices, BNY shall provide a commercially reasonable proposal to the Trust in writing setting forth the terms applicable to such change or increase in scope, and BNY and the Trust shall negotiate in good faith with
respect to each such change or increase. BNY shall not be obligated to provide any new service or increase in the scope of services hereunder unless and until the parties have agreed to the terms applicable to such new service or increase in scope,
which may include additional fees related thereto.
6. Allocation of Expenses.
Except as otherwise provided herein, all costs and expenses arising or incurred in connection with the performance of this Agreement shall be paid by the Sponsor,
including but not limited to, organizational costs and costs of maintaining corporate existence, taxes, interest, brokerage fees and commissions, insurance premiums, compensation and expenses of the Trust, officers or employees, legal, accounting and
audit expenses, management, advisory, sub-advisory, administration and shareholder servicing fees, charges of custodians, transfer and dividend disbursing agents, expenses (including clerical expenses) incident to the issuance, redemption or
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repurchase of Trust shares or membership interests, as applicable, fees and expenses incident to the registration or qualification under the Securities Laws, state or other
applicable securities laws of the Trust or its shares or membership interests, as applicable, costs (including printing and mailing costs) of preparing and distributing Offering Materials, reports, notices and proxy material to the Trust’s
shareholders or members, as applicable, all expenses incidental to holding meetings of the Trust’s shareholders, and extraordinary expenses as may arise, including litigation affecting the Trust and legal obligations relating thereto for which the
Trust may have to indemnify its officers, managers, and/or members, as may be applicable.
7. Standard of Care; Indemnification.
(a) In performing its duties under this Agreement, BNY shall exercise the standard of care, skill and diligence that a professional provider of fund administration and accounting services to exchange-traded products registered
with the SEC under the 1933 Act and 1934 Act would observe in these affairs and shall perform its duties without negligence, fraud, bad faith or willful misconduct (the “Standard of Care”). Except as otherwise provided herein, BNY and any BNY
Affiliate shall not be liable for any costs, expenses, damages, liabilities or claims (including attorneys’ and accountants’ fees) incurred by the Trust, except those costs, expenses, damages, liabilities or claims directly arising out of BNY’s own
failure to satisfy the Standard of Care. In no event shall BNY or any BNY Affiliate be liable to the Trust or any third party for any special, indirect or consequential damages, or lost profits or loss of business, arising under or in connection
with this Agreement, even if previously informed of the possibility of such damages and regardless of the form of action. BNY shall not be absolved of liability for any of its acts or omissions in connection with any services performed pursuant to
this Agreement if such actions or omissions failed to satisfy the Standard of Care set forth in this Section 7. Subject to the other provisions of this Section 7, BNY agrees to be liable to the Trust to the extent it is the responsible party for
such loss, damage or expense either (i) in accordance with the terms of its Net Asset Value (“NAV”) Error Policy as such is provided to BNY by the Trust or (ii) as may be mutually agreed upon between BNY and the Trust.
(b) The Trust shall indemnify and hold harmless BNY and any BNY Affiliate from and against any and all costs, expenses, damages, liabilities and claims (including claims asserted by the Trust), and reasonable attorneys’ and
accountants’ fees relating thereto, which are
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sustained or incurred or which may be asserted against BNY or any BNY Affiliate, by reason of or as a result of any action taken or omitted to be taken by BNY or any BNY Affiliate
without bad faith, gross negligence, or willful misconduct, or in reliance upon (i) any law, act, regulation or interpretation of the same even though the same may thereafter have been altered, changed, amended or repealed, (ii) the Trust’s Offering
Materials or Documents (excluding information provided by BNY), (iii) any Instructions, or (iv) any opinion of legal counsel for the Trust, or arising out of transactions or other activities of the Trust which occurred prior to the commencement of
this Agreement; provided, that the Trust shall not indemnify BNY nor any BNY Affiliate for costs, expenses, damages, liabilities or claims for which BNY or any BNY Affiliate is liable under the preceding sub-section 7(a). This indemnity
shall be a continuing obligation of the Trust, its successors and assigns, notwithstanding the termination of this Agreement. In no event shall the Trust be liable to BNY or any BNY Affiliate or any third party for any special, indirect or
consequential damages, or lost profits or loss of business, arising under or in connection with this Agreement, even if previously informed of the possibility of such damages and regardless of the form of action. Without limiting the generality of
the foregoing, the Trust shall indemnify BNY and any BNY Affiliate against and save BNY and any BNY Affiliate harmless from any loss, damage or expense, including counsel fees and other costs and expenses of a defense against any claim or liability,
arising from any one or more of the following:
(i) Errors in records or instructions, explanations, information, specifications or documentation of any kind, as the case may be, supplied to BNY by any third party described above or by or on behalf of the Trust;
(ii) Action or inaction taken or omitted to be taken by BNY or any BNY Affiliate pursuant to Instructions of the Trust or otherwise without bad faith, fraud, negligence or willful misconduct;
(iii) Any action taken or omitted to be taken by BNY in good faith in accordance with the advice or opinion of counsel for the Trust;
(iv) Any improper use by the Trust or its agents or Sponsor of any valuations or computations supplied by BNY pursuant to this Agreement;
(v) The method of valuation and the method of computing the Trust’s
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net asset value; or
(vi) Any valuations or net asset value provided by the Trust.
(c) Subject to the limitations of liability in Section 7(a) hereof, BNY shall indemnify and hold harmless a Trust from and against all losses, including reasonable counsel fees and expenses in third party suits and in a
successful defense of claims asserted by BNY, directly caused by BNY’s failure to satisfy its Standard of Care, except to the extent resulting from the Trust’s negligence or willful misconduct.
(d) Actions taken or omitted in reliance on Instructions or upon any information, order, indenture, stock certificate, membership certificate, power of attorney, assignment, affidavit or other instrument believed by BNY in good
faith to be from an Authorized Person, or upon the opinion of legal counsel for the Trust, shall be conclusively presumed to have been taken or omitted in good faith, which presumption maybe rebutted by evidence.
(e) To the extent that the Trust directs BNY to use the products or services of a third party service provider engaged by the Trust, BNY shall not be liable for, and is relieved of all responsibility for, errors or issues in
the provision of the services hereunder or the inability of BNY to perform its obligations under this Agreement (including without limitation the meeting of service levels) to the extent arising out of the use of or reliance upon the Trust’s third
party service provider. The Trust retains the sole obligation, and BNY does not assume any obligation or responsibility, to manage the relationship with the Trust’s third party service provider. The Trust shall indemnify BNY from and against any
and all costs, expenses, damages, liabilities and claims (including claims asserted by a Trust), and reasonable attorneys’ and accountants’ fees relating thereto, which are sustained or incurred or which may be asserted against BNY or any BNY
Affiliate arising out of the use of or reliance upon the Trust’s third party service provider, except to the extent any the forgoing are caused by BNY’s failure to satisfy its Standard of Care under this Agreement in the use of such third party
service provider’s product or service. A Trust acknowledges, however, that BNY’s and any BNY Affiliate’s reliance upon and use of any such third party service provider’s product or service satisfies the Standard of Care in the absence of BNY’s
negligence, fraud, bad faith or willful misconduct. Without limiting the foregoing, each Trust agrees that any audit, disaster recovery, business continuity and information security
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standards or obligations in this Agreement shall not apply to the products or services of the Trust’s third party service providers. The Trust, or its officers or the Sponsor,
shall work with its third party service providers to: (i) cooperate with BNY’s reasonable requests for access to, and use of, the third party provider’s system to provide the services under this Agreement, for information regarding information
security or otherwise related to the use or reliance upon of such third party service provider’s product or services by BNY, and (ii) comply with BNY’s reasonable requirements for the protection of its own systems associated with any use or reliance
on the third party service provider.
8. Compensation.
For the services provided hereunder, the Sponsor agrees on behalf of the Trust to pay BNY such compensation as is mutually agreed to in writing by the Trust, the
Sponsor and BNY from time to time and such out-of-pocket expenses (e.g., telecommunication charges, postage and delivery charges, costs of independent compliance reviews, record retention costs, reproduction charges and transportation and
lodging costs) as are incurred by BNY in performing its duties hereunder. Except as hereinafter set forth, compensation shall be calculated and accrued daily and paid monthly. Upon termination of this Agreement before the end of any month, the
compensation for such part of a month shall be prorated according to the proportion which such period bears to the full monthly period and shall be payable upon the effective date of termination of this Agreement. For the purpose of determining
compensation payable to BNY, the Trust’s net asset value shall be computed at the times and in the manner specified in the Trust’s Offering Materials.
9. Records; Visits.
(a) BNY will maintain accurate books and records associated with the services, including without limitation, transactional reports, work specifications, invoices from third party service providers, and receipts. The books and
records pertaining to the Trust which are in the possession or under the control of BNY shall be the property of the Trust. Subject to BNY’s confidentiality obligations, the Trust and Authorized Persons shall, at no additional cost, have access to
such books and records during BNY’s normal business hours. Upon the reasonable
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request of the Trust, copies of any such books and records shall be provided by BNY to the Trust or to an Authorized Person, at the Trust’s expense.
(b) BNY shall keep all books and records with respect to the services to be performed by BNY hereunder in the form and manner required by Section 31 of the Investment Company Act of 1940 and the rules thereunder, as if the
Trust was subject to such requirements.
(c) In the event the Trust learns of pending or imminent litigation or reasonably anticipates litigation and sends a legal hold notice to BNY or in connection with such litigation the Trust requires documents or other
information to be produced, BNY agrees to cooperate with the Trust (i) to determine what if any relevant documents and information BNY has that may be subject to the hold and to take reasonable steps to preserve that information, and (ii) to
develop and implement a joint litigation response plan, at the request of the Trust and the reasonable cost of such steps incurred by BNY shall be assumed by the Trust unless the subject matter of the litigation implicates BNY in a breach of
its obligations under this Agreement, in which case BNY shall be responsible for its own reasonable costs related to such legal holds, document production or other litigation responses.
(d) BNY agrees that it will store all records on media designed to protect the usability, reliability, authenticity and preservation of such records for as long as they are needed for the Trust to meet its recordkeeping
obligations under this Agreement BNY shall have documented policies, standards and guidelines for converting or migrating data from one record system to another. BNY agrees that systems for electronic records must be designed so that records will
remain
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(e) Provide reasonable assistance to the Trust in the handling of routine regulatory examinations and in response to any non-routine regulatory matters.
10. Term of Agreement.
(a) This Agreement shall be effective commencing upon regulatory approval by the U.S. Securities and Exchange Commission permitting shares of the Trust to be offered for sale, and, unless terminated pursuant to its terms, shall
continue until 11:59 PM on the date which is the third anniversary of such date (the “Initial Term”), at which time this Agreement shall terminate, unless renewed in accordance with the terms hereof. For the avoidance of doubt, no services shall be
provided to the Trust hereunder until such regulatory approval is obtained by the Trust.
(b) This Agreement shall automatically renew for successive terms of one (1) year each (each, a “Renewal Term”), unless the Trust or BNY gives written notice to the other party of its intent not to renew and such notice is
received by the other party not less than ninety (90) days prior to the expiration of the Initial Term or the then-current Renewal Term (a "Non-Renewal Notice"). In the event a party provides a Non-Renewal Notice, this Agreement shall terminate at
11:59 PM on the last day of the Initial Term or Renewal Term, as applicable.
(c) If a party materially breaches this Agreement (a “Defaulting Party”) the other party (the “Non‑Defaulting Party”) may give written notice thereof to the Defaulting Party (“Breach Notice”), and if such material breach shall
not have been remedied within thirty (30) days after the Breach Notice is given, then the Non- Defaulting Party may terminate this Agreement by giving written notice of termination to the Defaulting Party (“Breach Termination Notice”), in which
case this Agreement shall terminate as of 11:59 PM on the 30th day following
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the date the Breach Termination Notice is given, or such later date as may be specified in the Breach Termination Notice (but not later than the last day of the Initial Term or
then-current Renewal Term, as appropriate). In all cases, termination by the Non‑Defaulting Party shall not constitute a waiver by the Non‑Defaulting Party of any other rights it might have under this Agreement or otherwise against the Defaulting
Party.
(d) Notwithstanding any other provision of this Agreement, BNY may in its sole discretion terminate this Agreement immediately by sending notice thereof to the Trust upon the happening of any of the following: (i) the Trust
commences as debtor any case or proceeding under any bankruptcy, insolvency or similar law, or there is commenced against the Trust any such case or proceeding; (ii) the Trust commences as debtor any case or proceeding seeking the appointment of a
receiver, conservator, trustee, custodian or similar official for the Trust or any substantial part of its property or there is commenced against the Trust any such case or proceeding; (iii) the Trust makes a general assignment for the benefit of
creditors; or (iv) the Trust admits in any recorded medium, written, electronic or otherwise, its inability to pay its debts as they come due. BNY may exercise its termination right under this Section 10(d) at any time after the occurrence of any
of the foregoing events notwithstanding that such event may cease to be continuing prior to such exercise, and any delay in exercising this right shall not be construed as a waiver or other extinguishment of that right. Any exercise by BNY of its
termination right under this Section 10(d) shall be without any prejudice to any other remedies or rights available to BNY and shall not be subject to any fee or penalty, whether monetary or equitable. Notwithstanding the provisions of Section 18,
notice of termination under this Section 10(d) shall be considered given and effective when given, not when received.
(e) The Trust may terminate this Agreement at any time upon ninety (90) days’ prior written notice in the event that the Sponsor determines to liquidate the Trust. BNY may terminate this Agreement at any time upon ninety (90)
days’ written notice for any reason and upon thirty (30) days’ written notice in the event of a breach of the Trust’s representations contained in Section 3(i)(e) hereof.
(f) The parties recognize that the continuity of the provision of fund administration and accounting services to the Trust under this Agreement is essential, even though
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notice of termination of this Agreement may have been given, or this Agreement may have terminated. Despite any dispute between the parties, BNY undertakes that for a reasonable
period not exceeding 180 days after termination BNY will continue to provide to the Trust the services under the terms of this Agreement, as requested by the Trust, and shall be compensated for such assistance pursuant to the currently effective fee
schedule. BNY will, in addition, provide commercially reasonable support for orderly transition, including the transfer of the books and records of the Trust, in accordance with a transition plan (as set forth below) at such rates as are negotiated
in good faith and mutually agreed to by the parties. Any provision of services after the 180-day period following the date of termination shall be under terms and at such rates as are negotiated in good faith and mutually agreed to by the parties.
BNY will provide commercially reasonable cooperation with any successor fund administrator/accountant in connection with the transition. The Trust shall reimburse BNY for additional costs (to be mutually agreed upon by the parties) that are
reasonably incurred by BNY in the transition. In connection with any termination of the Agreement for any reason whatsoever, the parties shall also reasonably cooperate with respect to the development of a transition plan setting forth a reasonable
timetable for the transition and describing the parties’ respective responsibilities for transitioning the services back to the Trust or any successor fund administrator/accountant in an orderly and uninterrupted fashion. This Section 10(f) shall
survive the termination of this Agreement.
11. Amendment.
This Agreement may not be amended, changed or modified in any manner except by a written agreement executed by BNY and the Trust to be bound
thereby.
12. Assignment; Subcontracting.
(a) This Agreement shall extend to and shall be binding upon the parties hereto, and their respective successors and assigns; provided, however, that this Agreement shall not be assignable or delegable by the Trust without the
written consent of BNY, or by BNY without the written consent of the Trust.
(b) Notwithstanding the foregoing: (i) BNY may assign or transfer this Agreement to any BNY Affiliate or transfer this Agreement in connection with a sale of a majority or more of its assets, equity interests or voting control,
provided that BNY gives the Trust thirty
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(30) days' prior written notice of such assignment or transfer and such assignment or transfer does not impair the provision of services under this Agreement in any material
respect, and the assignee or transferee agrees to be bound by all terms of this Agreement in place of BNY; (ii) BNY may subcontract with, hire, engage or otherwise outsource to any BNY Affiliate with respect to the performance of any one or more of
the functions, services, duties or obligations of BNY under this Agreement but any such subcontracting, hiring, engaging or outsourcing shall not relieve BNY of any of its liabilities hereunder; (iii) BNY may subcontract with, hire, engage or
otherwise outsource to an unaffiliated third party with respect to the performance of any one or more of the functions, services, duties or obligations of BNY under this Agreement but any such subcontracting, hiring, engaging or outsourcing shall not
require the prior written consent of the Trust and shall not relieve BNY of its responsibilities hereunder; and (iv) BNY, in the course of providing certain additional services requested by the Trust, including but not limited to, Typesetting or
eBoard Book services (“Vendor Eligible Services”) as further described in Schedule I, may in its sole discretion, enter into an agreement or agreements with a financial printer, or electronic services provider (“Vendor”) to provide BNY with the
ability to generate certain reports or provide certain functionality. BNY shall not be obligated to perform any of the Vendor Eligible Services unless an agreement between BNY and the Vendor for the provision of such services is then-currently in
effect, and shall only be liable for the failure to reasonably select the Vendor. Upon request, BNY will disclose the identity of the Vendor and the status of the contractual relationship, and the Trust is free to attempt to contract directly with
the Vendor for the provision of the Vendor Eligible Services.
(c) Notwithstanding the foregoing, (i) the Trust may assign this Agreement to, and the Agreement may be assumed by, a successor or survivor of a merger, consolidation, conversion, reorganization, redomestication, or acquisition
of substantially all of the assets of the Trust, upon such succession or transaction and without any appointment or other action by the Trust or BNY and (ii) the Trust may assign or transfer this Agreement to any Invesco affiliate, provided that
the Trust gives BNY thirty (30) days' prior written notice of such assignment or transfer and the assignee or transferee agrees to be bound by all terms of this Agreement in place
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of the Trust, and in either case of (i) and (ii) subject to the reasonable new customer due diligence requirements of BNY.
(d) As compensation for the Vendor Eligible Services rendered by BNY pursuant to this Agreement, the Sponsor will pay to BNY such fees as may be agreed to in writing by the Sponsor and BNY. In turn, BNY will be responsible for
paying the Vendor’s fees. For the avoidance of doubt, BNY anticipates that the fees it charges hereunder will be more than the fees charged to it by the Vendor, and BNY will retain the difference between the amount paid to BNY hereunder and the
fees BNY pays to the Vendor as compensation for the additional services provided by BNY in the course of making the Vendor Eligible Services available to the Trust.
13. Governing Law; Consent to Jurisdiction.
This Agreement shall be construed in accordance with the laws of the State of New York, without regard to conflict of laws principles thereof.
The Trust hereby consents to the jurisdiction of a state or federal court situated in New York City, New York in connection with any dispute arising hereunder. To the extent that in any jurisdiction the Trust may now or hereafter be entitled to
claim, for itself or its assets, immunity from suit, execution, attachment (before or after judgment) or other legal process, the Trust irrevocably agrees not to claim, and it hereby waives, such immunity.
14. Severability.
In case any provision in or obligation under this Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or obligations shall not in any way be affected or impaired thereby, and if any provision is inapplicable to any person or circumstances, it shall nevertheless remain applicable to all other
persons and circumstances.
15. No Waiver.
Each and every right granted to any party hereunder or under any other document delivered hereunder or in connection herewith, or allowed it by
law or equity, shall be cumulative and may be exercised from time to time. No failure on the part of a party to exercise, and no delay in exercising, any right will operate as a waiver thereof, nor will any single or partial exercise by such party
of any right preclude any other or future exercise thereof or the exercise
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of any other right.
16. Notices.
All notices, requests, consents and other communications pursuant to this Agreement in writing shall be sent as follows:
if to the Trust, at
Invesco Capital Management LLC
3500 Lacey Road, Suite 700
Downers Grove, IL 60515
Attention: Legal Department and Fund Treasurer
with a copy to:
11 Greenway Plaza, Suite 1000
Houston, TX 77046
Attention: General Counsel
if to BNY, at
BNY
240 Greenwich Street
New York, New York 10286
Attention: ETF Operations
240 Greenwich Street
New York, New York 10286
Attention: ETF Operations
with a copy to:
The Bank of New York Mellon
240 Greenwich Street
New York, New York 10286
Attention: Legal Dept. – Asset Servicing
240 Greenwich Street
New York, New York 10286
Attention: Legal Dept. – Asset Servicing
or at such other place as may from time to time be designated in writing. Notices hereunder shall be effective upon receipt.
17. Counterparts.
This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original; but such counterparts together shall constitute
only one instrument.
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18. Confidentiality.
(a) Each party shall keep confidential any information relating to the other party’s business (“Confidential Information”). Confidential Information shall include (a) any data or information that is competitively sensitive
material, and not generally known to the public, including, but not limited to, information about product plans, marketing strategies, finances, operations, customer relationships, customer profiles, customer lists, sales estimates, business plans,
and internal performance results relating to the past, present or future business activities of the Trust or BNY and their respective subsidiaries and affiliated companies; (b) any scientific or technical information, design, process, procedure,
formula, or improvement that is commercially valuable and secret in the sense that its confidentiality affords the Trust or BNY a competitive advantage over its competitors; (c) all confidential or proprietary concepts, documentation, reports,
data, specifications, computer software, source code, object code, flow charts, databases, inventions, know‑how, and trade secrets, whether or not patentable or copyrightable; and (d) anything designated as confidential. Notwithstanding the
foregoing, information shall not be Confidential Information and shall not be subject to such confidentiality obligations if it: (a) is already known to the receiving party at the time it is obtained; (b) is or becomes publicly known or available
through no wrongful act of the receiving party; (c) is rightfully received from a third party who, to the best of the receiving party’s knowledge, is not under a duty of confidentiality; (d) is released by the protected party to a third party
without restriction; (e) is requested or required to be disclosed by the receiving party pursuant to a court order, subpoena, governmental or regulatory agency request or law; (f) is relevant to the defense of any claim or cause of action asserted
against the receiving party; (g) is Trust information provided by BNY in connection with an independent third party compliance or other review; (h) is released in connection with the provision of services under this Agreement; or (i) has been or is
independently developed or obtained by the receiving party. The provisions of this Section 20 shall survive termination of this Agreement for a period of one (1) year after such termination.
(b) The Bank of New York Mellon Corporation is a global financial organization that provides services to clients through its affiliates and subsidiaries in multiple jurisdictions (the “BNY Group”). The BNY Group may centralize
functions including audit, accounting, risk, legal, compliance, sales, administration, product communication, relationship
25
management, storage, compilation and analysis of customer-related data, and other functions (the “Centralized Functions”) in one or more affiliates, subsidiaries and third-party
service providers. Solely in connection with the Centralized Functions and solely for the use of such information in providing services, improving the services or developing future services under this Agreement, (i) the Trust consents to the
disclosure of and authorizes BNY to disclose information regarding the Trust (“Customer-Related Data”) to the BNY Group and to its third-party service providers who are subject to confidentiality obligations with respect to such information;
provided, however, that unless such Customer-Related Data is aggregated and anonymized, no such consent is provided for disclosure of Customer-Related Data to affiliates and subsidiaries of the BNY Group operating as a registered investment manager
or adviser to funds, other collective investment vehicles, separate accounts or other investment management products and (ii) BNY may store the names and business contact information of the Trust’s employees and representatives on the systems or in
the records of the BNY Group or its service providers. The BNY Group may aggregate Customer-Related Data with other data collected and/or calculated by the BNY Group, and notwithstanding anything in this Agreement to the contrary the BNY Group will
own all such aggregated data, provided that the BNY Group shall not distribute the aggregated data in a format that identifies Customer-Related Data with a particular customer. The Trust confirms that it is authorized to consent to the foregoing.
19. Limitation of Liability of the Trustees and Shareholders.
It is expressly acknowledged and agreed that the obligations of the Trust hereunder shall not be binding upon any of the shareholders, trustees, officers,
employees or agents of the Trust, personally, but shall bind only the trust property of the Trust, as provided in its Declaration of Trust. The execution and delivery of this Agreement have been authorized by the
Sponsor of Trust and signed by an officer of the Trust, acting as such, and neither such authorization by the Sponsor nor such execution and delivery by such officer shall be deemed to have been made by any of them individually or to impose any
liability on any of them personally, but shall bind only the trust property of a Trust as provided in its Declaration of Trust.
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20. Customer Right of Access.
BNY shall, upon the Trust’s request, provide the Trust with a summary of the results of its latest SOC 1 or equivalent control audit prepared by BNY’s external
auditors. In addition and no more than annually, BNY will participate in a Trust’s reasonable information security questionnaire processes. Upon reasonable request, BNY will arrange for its relevant subject matter experts to meet with the relevant
subject matter experts of the Trust once annually to review BNY’s controls and any deficiencies identified in the SOC 1 audit report. The Trust may view BNY’s information security-related policies and procedures in a clean room subject to BNY’s
confidentiality requirements, however, no documentation may be copied, shared, transmitted or removed from BNY premises, except as mutually agreed. The parties shall mutually agree upon a convenient time and place for such meeting. Not more than
once each year, and subject to BNY’s reasonable security requirements and availability of personnel, BNY will at the Trust’s request arrange a tour of BNY’s data processing facilities for the Trust’s subject matter experts. BNY will also, subject to
its reasonable security requirements, permit site visits of its data processing facilities by governmental agencies with regulatory authority over the Trust. In the event that the Trust, identifies any control deficiencies, BNY will discuss such
findings with the Trust and if appropriate the parties shall work together to develop a mutually agreeable remediation plan. All nonpublic documentation and information disclosed to the Trust in accordance with this Section shall be deemed
proprietary and confidential information of BNY. The Trust shall not disclose such documentation or information to any third party or use it for any purpose other than evaluating BNY’s security controls, except that the Trust may disclose BNY’s SOC 1
summary to the Trust’s external auditors, provided that such external auditors are required to maintain the confidentiality of the summary and any related information. The Trust shall reimburse BNY for any costs and expenses incurred in connection
with any review of BNY’s security controls.
21. Information Security.
BNY has implemented, and agrees to maintain, information security policies and programs consistent with industry guidelines and all applicable statutes, rules or
regulations, that include commercially reasonable administrative, physical and technical safeguards designed to (i) protect the privacy, confidentiality, integrity and availability, against any reasonably foreseeable threats
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or hazards to the Trust’s Confidential Information and (ii) reasonably protect against accidental, unlawful or unauthorized access, copying, damage, destruction, disclosure,
distribution, loss, manipulation, modification, processing, use, reuse, interception, or transmission of such Confidential Information.
(a) Administrative Safeguards. BNY has implemented, and agrees to maintain, commercially reasonable administrative safeguards that include, but are not limited to, (i) security awareness training designed to ensure
understanding of responsibilities in guarding against security events and unauthorized use or access to Confidential Information, (ii) logging procedures to proactively monitor user and system activity, (iii) due diligence processes for any
approved subcontractors processing Confidential Information, (iv) access termination procedures for timely revocation of access, (v) periodic user entitlement review processes, (vi) software development and change management processes, and (vii)
security incident management policies and procedures for the detection, investigation, notification, evidence preservation and remediation.
(b) Physical Safeguards. BNY has implemented, and agrees to maintain, commercially reasonable physical safeguards that include, but are not limited to, (i) access controls at facilities processing Confidential Information,
(ii) secured transport and appropriate disposal of physical media and paper waste containing Confidential Information, and (iii) controls designed to protect against environmental hazards (e.g., water or fire damage).
(c) Technical Safeguards. BNY has implemented, and agrees to maintain, commercially reasonable technical safeguards that include, but are not limited to, (i) logical separation of Confidential Information on information
systems, (ii) access controls to maintain appropriate segregation of duties and limit access to information resources on a need-to-know and least privileged basis, (iii) complex passwords at least seven characters in length, changed on a regular
basis, and stored and transmitted in a secure manner, (iv) device and software management controls to guard against viruses and other malicious or unauthorized software, (v) information system and software patching consistent with manufacturer
recommendations, (vi) intrusion detection and prevention systems to guard against unauthorized information system access, (vii) encryption of Confidential Information transmitted across unsecure or public networks including
28
enforcement of Transport Layer Security1 for e-mail exchanged between BNY and the Funds, (viii) encryption of Confidential Information stored on mobile media and mobile
electronic devices and (ix) audit logging that records user and system activities.
(d) Assessment & Remediation. The Trust, acting through an authorized representative reasonably acceptable to BNY, at no additional expense and with reasonable notice, may no more than once per year inspect documentation
concerning BNY’s information security practices and safeguards and may visit facilities relevant to the services provided to a Fund, provided, however, that no such documentation may be copied or removed from BNY’s premises. BNY, as its sole
expense, shall commission an independent penetration test of externally facing information systems that process Confidential Information on at least an annual basis, remediate any material findings within a commercially reasonable timeframe, and
provide the Trust with copies of any relevant independent SOC 1 audits.
(e) Security Incident Management & Breach Notification. BNY will notify the Trust as promptly as reasonably possible under the circumstances, upon learning of a Security Incident (as defined below) involving the Trust’s
Confidential Information. Security Incidents are defined as (1) the actual unauthorized access to or use of the Trust’s Confidential Information, or (2) the unauthorized disclosure, loss, theft or manipulation of the Trust’s Confidential
Information that has the potential to cause harm to the Fund’s systems, employees, customers, information or brand name. Notification shall take the form of a phone call to the Trust’s designated contact(s) and shall include at a minimum, (a)
problem statement or description, (b) expected resolution time (if known), and (c) the name and phone number of the BNY representative that the Trust may contact to obtain updates. BNY agrees to keep the Trust informed of progress and actions
taken to resolve the incident and cooperate with the Fund in any litigation or investigation arising from said incident. Unless such disclosure is mandated by law, the trust in its sole discretion will determine whether to provide explicit
notification to the Trust’s shareholders, customers or
1 Transport Layer Security (or TLS) is a cryptographic protocol that provides secure (encrypted) communication for e-mail exchanged over the Internet between two organizations.
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employees concerning incidents involving the Trust’s personally identifiable information relating to such persons.
22. Audit Rights.
Upon thirty (30) days’ written notice and not more frequently than once in any twelve month period, the Trusts or their designee may, subject to BNY’s reasonable
security and confidentiality requirements, inspect and/or conduct site visits to (i) review and assess relevant independent SOC 1 audits provided by BNY evaluating BNY’s processes and controls for procedures relevant to the services, (ii) review and
assess summaries of BNY’s or a BNY Affiliate’s disaster recovery and business continuity plans, and (iii) review and assess BNY’s or a BNY Affiliate’s compliance with this Agreement including, without limitation, the assessment of fees and possible
overpricing and overcharging and the allocation of income and proceeds to the Funds. BNY agrees to cooperate with the Trust’s audit and provide reasonable assistance and access to information. Any such audit shall not unreasonably disrupt BNY’s
ability to provide services to other clients in the course of its normal business.
Costs of any audits conducted under the authority of this right to audit and not addressed elsewhere will be borne by the Trust unless certain exemption criteria
are met. Any adjustments and/or payments that must be made as a result of any such audit or inspection of BNY's invoices and/or records, including for any overpricing or overcharging by BNY, shall be made within a reasonable amount of time (not to
exceed 90 days) from presentation of the Fund's findings to BNY. BNY shall not be entitled to reimbursement or repayment by a Trust, a Fund or its affiliate for any costs or expenses incurred as a result of their efforts to comply with obligations
under this Section 22.
BNY shall not be required to provide access to any systems or data or records that are not directly related to the provision of services to the Funds and in no
event shall such reviews include any systems, data or other information relating to other clients of BNY or any proprietary or confidential information of BNY or require BNY to disclose any information that would or might result in the waiver of any
attorney-client privilege or other confidentiality privilege. Any such review shall not unreasonably disrupt the BNY’s ability to provide services to other clients in the course of its normal business. The Funds and their internal and external
professional advisors shall
30
be required to comply with BNY’s reasonable security requirements. Upon BNY’s reasonable request, prior to access to BNY’s personnel, agents, consultants,
contractors, subcontractors, data, facilities and systems, each such person shall be required to sign a confidentiality agreement with BNY that requires such person to meet the reasonable confidentiality requirements of BNY.
23. Business Continuity Plan.
Summaries of BNY’s disaster recovery and business resiliency/continuity plans (“DR Plans”) pertinent to the services provided hereunder, which shall address
BNY’s ability to render services under this Agreement during and after a significant business disruption, including the availability to BNY of back-up services and redundancies will be provided to the Trust. BNY reserves the right to edit or update
its DR Plans as needed from time to time, without notice, so long as the changes do not materially compromise BNY’s ability to maintain services in accordance with this Agreement.
Upon written request of the Trust, BNY agrees to report to the Trust on its business continuity policy which may include an annual presentation on its business
continuity procedures. BNY’s DR Plans shall be tested no less than annually with the ability of the Trust to participate in the testing unless impracticable. BNY shall provide the Trust with summary results of such testing on an annual basis and,
where unsuccessful tests or significant issues related to the services provided hereunder arise, provide sufficient evidence of remediation or resolution. BNY agrees to maintain a log of all business continuity events and report material business
continuity events affecting the services hereunder to the Trust or its designee upon BNY becoming aware of any such event, as well as steps proposed in order to minimize any interruption to its services hereunder. In the event of a material business
disruption associated with the services outlined in this Agreement, BNY agrees to cooperate with the Trust or its designee in responding to, resolving, and/or recovering from the disruption. The occurrence of a Force Majeure Event will not relieve
BNY of its obligation to implement the DR Plans and to provide the disaster recovery services contained therein. In the event of a service disruption, once normal service has been restored, BNY will promptly complete a root cause analysis report and
email it to the Trusts or their designee. The report will include the cause of disruption, details of how the disruption was resolved, and follow-up actions BNY will implement to ensure the disruption does not re-occur.
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24. Anti-Money Laundering.
BNY represents and warrants that it is in compliance, in all material respects, with, and will continue to comply with, anti-money laundering laws and
regulations applicable to it; BNY is a financial institution subject to the USA PATRIOT Act of 2001, as amended, (the “Patriot Act”) and that it has established policies and procedures designed to prevent and detect money laundering, including the
processes to meet the anti-money laundering requirements of the Patriot Act and the rules and regulations promulgated thereunder. Additionally, neither BNY nor any person or entity controlling, controlled by, or under common control with BNY or for
whom the BNY is acting as agent or nominee is a country, territory, organization, person or entity named on the Office of Foreign Assets Control (“OFAC”) list maintained by the U.S. Treasury Department.
25. Mandatory Changes.
The parties agree that any new costs, fees and/or expenses to be charged to the Trust that are related to any changes to the services required by any new
applicable law, rule or regulation shall be agreed upon in advance and represent, where appropriate, a reasonable allocation of fees in relation to those charged by BNY to its other clients.
26. Data Ownership.
The parties agree that any and all proprietary data provided by the Trust and including nonpublic account data generated by BNY pursuant to the provision of
services under this Agreement (but excluding BNY’s proprietary data and third party data governed by a license agreement or similar written agreement) shall be owned exclusively by the Trust.
27. Insurance.
BNY has and will maintain, at all times during the term of this Agreement, insurance of the types and in the amounts as are commercially reasonable, taking into
account the nature of its business, the associated risks and the cost and availability of insurance having commercially viable terms and conditions. BNY agrees to provide to the Trust certificates of its applicable insurance coverage, and shall
provide an update at the Trust’s written request, but no more frequently than annually.
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28. Service Level Agreements. BNY and the Trust may from time to time agree to document the manner in which they expect to deliver and receive the services contemplated by this Agreement. In such event, each party will
perform its obligations in accordance with any service levels that may be agreed upon by the parties in writing from time to time, subject to the terms of this Agreement.
29. Step In Rights.
In the event that the Trust reasonably believes that a Force Majeure Event will substantially prevent, hinder or delay performance of the services contemplated by this Agreement for
more than five (5) consecutive business days, the Trust may take commercially reasonable actions to mitigate the impact of such services not being provided, including, but not limited to, contracting with another service provider to provide such
services during such period and/or engaging the Sponsor or an affiliate of the Sponsor to perform such services in-house during such period; provided, that the Trust shall consult with BNY in good faith in connection with any such mitigation and BNY
shall provide the Trust reasonable assistance in good faith in connection therewith; provided, further, that BNY shall resume providing, and the Trust shall pay for, such services when BNY resumes providing, unless the Trust has terminated this
Agreement pursuant to the terms of Section 10. Notwithstanding anything set forth in this Section 31, (i) in no event shall the Sponsor be obligated to pay any fees under this Agreement to BNY with respect to any services not actually provided during
any such Force Majeure Event and (ii) the Sponsor shall have no responsibility to pay BNY for services temporarily performed by the Investment Advisor or a third party service provider.
30. Headings. All headings in this Agreement are for reference purposes only and not intended to affect in any way the interpretation or meaning of this Agreement.
[Signature page follows.]
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IN WITNESS WHEREOF, the parties hereto have caused the foregoing instrument to be executed by their duly authorized officers and their seals to be hereunto affixed, all as of the
latest date set forth below.
INVESCO CAPITAL MANAGEMENT LLC
By: s/ Kelli Gallegos
Name: Kelli Gallegos
Title: Principal Financial and Accounting Officer – Investment Pools
Date: September 25, 2025
THE BANK OF NEW YORK MELLON
By: /s/ Gerard Connors
Name: Gerard Connors
Title: Senior Vice President
Date: October 10, 2025
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EXHIBIT A
I, Kelli Gallegos, on behalf of Invesco Galaxy Solana ETF, a Delaware statutory trust (the “Trust”), do hereby certify that:
The following individuals serve in the following positions and each has been qualified therefor pursuant to delegated authority in conformity with the Trust’s Organizational
Documents, and the signatures set forth opposite their respective names are their true and correct signatures. Each such person is designated as an Authorized Person under the Fund Administration and Accounting Agreement dated as of September __,
2025, between the Trust and The Bank of New York Mellon.
|
Name
|
Position
|
Signature
|
|
Adrien Deberghes
|
Head of Fund Governance & Administration
|
|
|
Kelli Gallegos
|
NA Head of OFCFO & Fund Treasury
|
|
|
Lori Anello
|
Director - NA OFCFO
|
|
|
Patricia Jones
|
Director - NA Fund Reporting
|
|
|
April Montemayor
|
Director - NA Fund Regulatory Reporting
|
|
|
Matt Greer
|
Global Head of Valuation
|
|
|
Andrew Muncey
|
Global Head of Fund Accounting & Tax
|
|
|
Ryan Casey
|
NA Head of Fund Accounting & Assurance
|
|
|
Tanya Loden
|
NA Head of Tax Assurance
|
|
|
Donna LaMagna
|
NA Head of Tax Product & Research
|
|
|
Rudolf Reitmann
|
Global Director - Passive & UIT Operations Products
Development
|
|
Signed By:
Name:
Title:
35
SCHEDULE I
Schedule of Services
All services provided in this Schedule of Services are subject to the review and approval of the appropriate Trust officers, Trust counsel and accountants of the Trust,
as may be applicable. The services included on this Schedule of Services may be provided by BNY or a BNY Affiliate, collectively referred to herein as “BNY”.
FUND ADMINISTRATION SERVICES
BNY shall provide the following fund administration services for the Trust:
| ◾ |
Prepare for the review by designated representatives of the Trust annual (or more frequently, as agreed upon between the parties) fund expense budgets, perform accrual analyses and roll-forward calculations and recommend changes to fund
expense accruals on a periodic basis, arrange for payment of a Trust’s expenses along with any review calculations of fees paid to the Trust’s Sponsor, custodian(s), fund accountant, distributor and obtain authorization of accrual changes and
expense payments;
|
| ◾ |
Prepare and calculate income projections as mutually agreed for periodic and/or annual distributions to be made by the Trust;
|
| ◾ |
Oversee and review calculation of fees paid to the Sponsor, custodian(s), transfer agent and other Trust service providers;
|
| ◾ |
Respond to, or refer to the Sponsor or the distributor or the transfer agent of the Trust, shareholder inquiries relating to the Trust;
|
| ◾ |
Provide periodic testing of portfolios to assist the Sponsor in complying with Internal Revenue Code mandatory qualification requirements, the requirements of the 1933 Act, 1934 Act, and Trust prospectus and statement of additional
information limitations as may be mutually agreed upon;
|
| ◾ |
Review and provide assistance on shareholder communications;
|
| ◾ |
Assist counsel and the Trust in the handling of routine regulatory examinations and provide reasonable assistance to the Trust’s legal counsel in response to any non-routine regulatory matters;
|
| ◾ |
Provide policies and procedures related to services provided by BNY and, if mutually agreed, certain of the BNY Affiliates; summary procedures thereof; and periodic certification and sub-certification letters;
|
| ◾ |
Provide supporting schedules to be utilized for the preparation of TD F 90-22.1 by the Trust;
|
| ◾ |
Assist with the SEC Rule 424(i) calculations and notices.
|
VALUATION AND COMPUTATION ACCOUNTING SERVICES
BNY shall provide the following valuation and computation accounting services for the Trust:
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| 1. |
Calculate Net Asset Value in the manner specified in the Offering Materials (which, for the service described herein, shall include the Net Asset Value error policy, where applicable).
|
| 2. |
Obtain security and digital asset quotes from pricing services as directed and approved by the Sponsor, or if such quotes are unavailable, then obtain such prices from the Sponsor, and in either case, calculate the market value of the
Trust’s assets in accordance with the Trust's valuation policies or guidelines; provided, however, that BNY shall not under any circumstances be under a duty to independently price or value any of the Trust's assets itself or to confirm or
validate any information or valuation provided by the Sponsor or any other pricing source, nor shall BNY have any liability relating to inaccuracies or otherwise with respect to such information or valuations as long as BNY’s actions or
omissions regarding such information or valuation satisfies the Standard of Care provided in this Agreement;
|
| 3. |
BNY shall maintain the following records on a daily basis for each Fund.
|
| i. |
Report of priced portfolio securities
|
| ii. |
Statement of net asset value per share
|
| 4. |
BNY shall prepare and maintain on behalf of the Trust all books and records of the, as well as any other documents necessary or advisable for compliance with applicable regulation as may be mutually agreed to between the Trust and BNY.
Without limiting the generality of the foregoing, BNY will prepare and maintain the following records upon receipt of information in proper form from the Trust, the Sponsor or authorized agents of a Trust:
|
• General
Ledger
• General
Journal
• Cash
Receipts Journal
• Cash
Disbursements Journal
• Subscriptions
Journal
• Redemptions
Journal
• Accounts
Receivable Reports
• Accounts
Payable Reports
• Open
Subscriptions/Redemption Reports
• Transaction
(Securities) Journal
• Broker
Net Trades Reports
• Reconciliations
| 5. |
BNY shall prepare a Holdings Ledger on a quarterly basis, and a Buy-Sell Ledger (Broker’s Ledger) on a semiannual basis for the Trust. BNY shall produce Schedule D on an annual basis the Trust.
|
The above reports may be prepared according to any other required frequency to meet the requirements of the Internal Revenue Service, the SEC, and the Trust’s Auditors.
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| 6. |
For internal control purposes, BNY uses the Account Journals produced by The Bank of New York Mellon Custody System to record daily settlements of the following for each Fund:
|
| i. |
Securities bought
|
| ii. |
Securities sold
|
| iii. |
Commodity futures contracts bought
|
| iv. |
Commodity futures contracts sold
|
| v. |
Interest received
|
| vi. |
Dividends received
|
| vii. |
Capital stock sold
|
| viii. |
Capital stock redeemed
|
| ix. |
Other income and expenses
|
| ◾ |
All portfolio purchases for the Trust are recorded to reflect expected maturity value and total cost including any prepaid interest, as applicable.
|
FINANCIAL REPORTING
BNY shall provide the following financial reporting services for the Trust:
| 1. |
Prepare, for review and approval by the Sponsor, Trust counsel and independent accountants, financial information for the Trust’s quarterly and annual reports, proxy statements and other communications required or otherwise to be sent to
Trust shareholders including but not limited to financial statements for the Trust and schedules of investments;
|
| 2. |
Prepare the Trust’s periodic shareholder reports, including certain information furnished by the Trust to BNY, as required pursuant to the Securities and Exchange Act of 1934;
|
| 3. |
Prepare for review and approval by the Sponsor, Trust counsel and independent accountants current reports (including monthly financial statements) with the appropriate regulatory agencies; review text of letters to shareholders
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” (which shall also be subject to review by the Trust’s legal counsel);
|
| 4. |
Provide policies and procedures related to services provided by BNY and, if mutually agreed, certain of the BNY Affiliates; summary procedures thereof; and periodic certification and sub-certification letters; and
|
| 5. |
Prepare, circulate and maintain the Trust’s financial reporting production calendar;
|
TAX SERVICES
BNY shall provide the following tax services for the Trust:
38
| 1. |
Prepare annual grantor trust tax reporting statements for client review and approval.
|
ETF SERVICES
| 1. |
Create and disseminate basket files based on trade date information.
|
| 2. |
Create and deliver in-kind files for outsourced custody, accounting, sponsor and APs.
|
| 3. |
Maintain an ETF Order Desk which includes the processing of create/redeem order, maintaining authorized users for each Authorized Participant and reconciliation of shares outstanding to DTC.
|
| 4. |
Maintain API connectivity with digital custodians for settlement confirmations.
|
IRS CIRCULAR 230 DISCLOSURE:
To ensure compliance with requirements imposed by the Internal Revenue Service, BNY informs the Trust that any U.S. tax advice contained in any communication from BNY
to the Trust (including any future communications) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any
transaction or matter addressed herein or therein.
39
|
|
Exhibit 10.7
|
TRANSFER AGENCY AND SERVICE AGREEMENT
THIS AGREEMENT is made as of September 26, 2025, by and among Invesco Galaxy Solana ETF (hereinafter the “Trust”),
a Delaware statutory trust, having its principal office and place of business at 3500 Lacy Road, Suite 700, Downers Grove, IL 60515, THE BANK OF NEW YORK MELLON, a New York corporation authorized to do a banking business having its principal office
and place of business at 240 Greenwich Street, New York, New York 10286 (the “Bank”), and solely with respect to Section 2 hereof, INVESCO CAPITAL MANAGEMENT LLC, a Delaware limited liability company having its principal office and place of business
at 3500 Lacey Road, Suite 700, Downers Grove, Illinois 60515 (the “Sponsor”).
WHEREAS, the Trust will ordinarily issue for purchase and redeem shares of the Trust (the “Shares) only in
aggregations of Shares known as “Creation Units” (currently 5,000 shares) (each a “Creation Unit”) principally in kind;
WHEREAS, The Depository Trust Company, a limited purpose trust company organized under the laws of the State of New
York (“DTC”), or its nominee (Cede & Co.), will be the registered owner (the “Shareholder”) of all Shares; and
WHEREAS, the Trust desires to appoint the Bank as its transfer agent, dividend disbursing agent, and agent in
connection with certain other activities, and the Bank desires to accept such appointment;
NOW, THEREFORE, in consideration of the mutual covenants herein contained, the parties hereto agree as follows:
1. Terms of Appointment; Duties of the Bank
1.1 Subject to the terms and conditions set forth in this Agreement, the Trust hereby employs and appoints the Bank to act as, and the Bank agrees to
act as, its transfer agent for the authorized and issued Shares, and as the Trust’s dividend disbursing agent.
1.2 Pursuant to such appointment, the Bank agrees that it will perform the following services:
(a) In accordance with the terms and conditions of this Agreement and the Authorized Participant Agreements prepared by the Sponsor, a copy of which
is attached hereto as Exhibit A, the Bank shall:
(i) Perform and facilitate the performance of purchases and redemption of Creation Units;
(ii) Prepare and transmit by means of DTC’s book‑entry system payments for dividends and distributions on or with respect to the Shares, if any,
declared by the Trust;
(iii) Maintain the record of the name and address of the Shareholder and the number of Shares issued by the Trust and held by the
Shareholder;
(iv) Record the issuance of Shares of the Trust and maintain a record of the total number of Shares of the Trust which are outstanding and authorized,
based upon data provided to it by the Trust. The Bank shall have no obligation, when recording the issuance of Shares, to monitor the
issuance of such Shares or to take cognizance of any laws relating to the issue or sale of such Shares, which functions shall be the
sole responsibility of the Trust.
(v) Prepare and transmit to the Trust and the Trust’s administrator and to any applicable securities exchange (as specified to the Bank by the Trust
or its administrator) information with respect to purchases and redemptions of Shares;
(vi) On days that the Trust may accept orders for purchases or redemptions, calculate and transmit to the Sponsor and the Trust’s administrator the
number of outstanding Shares;
(vii) On days that the Trust may accept orders for purchases or redemptions (pursuant to the Authorized Participant Agreement), transmit to
the Trust’s administrator, the Trust and DTC the amount of Shares purchased on such day;
(viii) Confirm to DTC the number of Shares issued to the Shareholder, as DTC may reasonably request;
(ix) Prepare and deliver other reports, information and documents to DTC as DTC may reasonably request;
(x) Extend the voting rights to the Shareholder for extension by DTC to DTC participants and the beneficial owners of Shares in accordance with
policies and procedures of DTC for book-entry only securities;
(xi) Distribute or maintain, as directed by the Trust, amounts related to purchases and redemptions of Creation Units, dividends and distributions,
variation margin on derivative securities and collateral;
(xii) Maintain those books and records of the Trust specified by the Trust in Schedule A attached hereto;
(xiii) Prepare a monthly report of all purchases and redemptions of Shares during such month on a gross transaction basis, and identify on a
daily basis the net number of Shares either redeemed or purchased on such Business Day and with respect to each Authorized Participant (as defined in each Authorized Participant Agreement) purchasing or redeeming Shares, the amount of Shares
purchased or redeemed;
(xiv) Receive from the Sponsor (as defined in the Authorized Participant Agreement) or from its agent purchase orders from Authorized
Participants for Creation Unit Aggregations of Shares received in good form and accepted by or on behalf of the Trust by the Sponsor, transmit appropriate trade instructions to the National Securities Clearance Corporation, if applicable, and
pursuant to such orders issue the appropriate number of Shares of the Trust and hold such Shares in the account of the Shareholder of the Trust;
(xv) Receive from the Authorized Participants redemption requests, deliver the appropriate documentation thereof to the Trust’s sponsor with respect
to redemptions for cash and for redemptions in-kind, generate and transmit or cause to be generated and transmitted confirmation of receipt of such redemption requests to the Authorized Participants submitting the same; transmit appropriate trade
instructions to the National Securities Clearance Corporation, if applicable, and redeem the appropriate number of Creation Unit Aggregations of Shares held in the account of the Shareholder; and
2
(xvi) Confirm the name, U.S taxpayer identification number and principal place of business of each Authorized Participant.
(xvii) The Bank may execute transactions directly with Authorized Participants to the extent necessary or appropriate to enable the Bank to
carry out any of the duties set forth in items (i) through (xvi) above. The Trust will be responsible for confirming the receipt of assets in connection with creation
activity and the withdrawal of assets in connection with redemption activity prior to the creation or redemption of Creation Units by the Bank. The Bank has no responsibility to independently verify the accuracy of such information provided to
it by the Trust.
(xviii) Except as otherwise instructed by the Trust, the Bank shall process all transactions for the Trust in accordance with the policies and
procedures mutually agreed upon between the Trust and the Bank with respect to the proper net asset value to be applied to purchases received in good order by the Bank or from an Authorized Participant before any cut-offs established by the Trust,
and such other matters set forth in items (i) through (xvi) above as these policies and procedures are intended to address.
(xix) Provide reasonable assistance to the Trust in routine regulatory examinations and in response to any non-routine regulatory matters.
(b) The Bank may maintain and manage, as agent for the Trust, such accounts as the Bank shall deem necessary for the performance of its duties under
this Agreement, including, but not limited to, the processing of Creation Unit purchases and redemptions; and the payment of dividends and distributions. The Bank may maintain such accounts at financial institutions deemed appropriate by the Bank
in accordance with applicable law.
(c) In addition to the services set forth in the above sub-section 1.2(a), the Bank shall: perform the customary services of a transfer agent and
dividend disbursing agent including, but not limited to, maintaining the account of the Shareholder, maintaining the items set forth on Schedule A attached hereto, and performing such services identified in each Participant Agreement.
(d) The following shall be delivered to DTC participants as identified by DTC as the Shareholder for book-entry only securities:
(i) Annual and semi‑annual reports of the Trust;
(ii) Trust proxies, proxy statements and other proxy soliciting materials;
(iii) Trust prospectus and amendments and supplements thereto, including stickers; and
(iv) Other communications as the Trust may from time to time identify as required by law or as the Trust may reasonably request
(v) The Bank shall provide additional services, if any, as may be agreed upon in writing by the Trust and the Bank.
(e) The Bank shall keep records relating to the services to be performed hereunder, in the form and manner to the extent required by Section 31 of
the Investment Company Act of 1940 and the rules thereunder (the “Rules”) as if the Trust was subject to such Rules, all such books and records shall be the
3
property of the Trust, will be preserved, maintained and made available in accordance with such Section and Rules, and will be
surrendered promptly to the Trust on and in accordance with its request.
(f) It is understood and agreed by the parties hereto that under no circumstances will the services performed by the Bank pursuant to this Agreement
include any service, function or activity that would constitute a “virtual currency business activity” for purposes of the regulations issued by the Superintendent of the New York State Department of Financial Services (23 N.Y.C.R.R. Part 200).
2. Fees and Expenses
2.1 The Bank shall receive from the Sponsor such compensation for its services provided pursuant to this Agreement as may be agreed to from time to
time in a written fee schedule approved by the parties. The fees are accrued daily and billed monthly and shall be due and payable upon receipt of the invoice. Upon the termination of this Agreement before the end of any month, the fee for the
part of the month before such termination shall be prorated according to the proportion which such part bears to the full monthly period and shall be payable upon the date of termination of this Agreement.
2.2 In addition to the fee paid under Section 2.1 above, the Sponsor agrees to reimburse the Bank for reasonable out-of-pocket expenses, including
but not limited to confirmation production, postage, forms, telephone, microfilm, microfiche, tabulating proxies, records storage, or advances incurred by the Bank for the items set out in the fee schedule or relating to dividend distributions and
reports (whereas all expenses related to creations and redemptions of Trust securities shall be borne by the relevant Authorized Participant in such creations and redemptions). In addition, any other expenses incurred by the Bank at the request or
with the consent of the Sponsor, will be reimbursed by the Sponsor.
2.3 The Sponsor agrees to pay all fees and reimbursable expenses within ten business days following the receipt of the respective billing notice
accompanied by supporting documentation, as appropriate. Postage for mailing of dividends, proxies, Trust reports and other mailings to all shareholder accounts shall be advanced to the Bank by the Trust at least seven (7) days prior to the mailing
date of such materials.
2.4 The Trust hereby represents and warrants to the Bank that (i) the terms of this Agreement, (ii) the fees and expenses associated with this
Agreement, and (iii) any benefits accruing to the Bank or to the Sponsor in connection with this Agreement, including, but not limited to, any fee waivers, reimbursements, or payments made, or to be made, by the Bank to Sponsor or to any affiliate
of the Sponsor relating to this Agreement have been fully disclosed to the Trust or the Sponsor and that, if required by applicable law, the Trust or the Sponsor has approved or will approve the terms of this Agreement, and any such fees, expenses,
and benefits.
3. Representations and Warranties of the Bank
The Bank represents and warrants to the Trust that:
It is a banking company duly organized and existing and in good standing under the laws of the State of New York.
It is duly qualified to carry on its business in the State of New York.
It is empowered under applicable laws and by its Charter and By-Laws to act as transfer agent and dividend
disbursing agent and to enter into, and perform its obligations under, this Agreement.
4
It is duly registered as a transfer agent under Section 17A(c)(2) of the Securities Exchange Act of 1934, as
amended (the “1934 Act”), it will remain so registered for the duration of this Agreement, and it will promptly notify the Trust in the event of any material change in its status as a registered transfer agent.
All requisite corporate proceedings have been taken to authorize it to enter into and perform this Agreement.
It has and will continue to have access to the necessary facilities, equipment and personnel to perform its duties
and obligations under this Agreement.
4. Representations and Warranties of the Trust
The Trust represents and warrants to the Bank that:
It is duly organized and existing and in good standing under the laws of Delaware.
It is empowered under applicable laws and by its Declaration of Trust and Trust Agreement to enter into and perform
this Agreement.
A registration statement under the Securities Act of 1933, as amended, on behalf of the Trust has become effective,
will remain effective, and appropriate state securities law filings have been made and will continue to be made, with respect to all Shares of the Trust being offered for sale.
5. Indemnification
5.1 The Bank shall not be responsible for, and the Trust shall indemnify and hold the Bank and its directors, officers, employees and agents harmless
from and against, any and all losses, damages, costs, charges, counsel fees, including, without limitation, those incurred by the Bank in a successful defense of any claims by the Trust, payments, expenses and liability (“Losses”) which may be
sustained or incurred by or which may be asserted against the Bank in connection with or relating to this Agreement or the Bank’s actions or omissions with respect to this Agreement, or as a result of acting upon any instructions reasonably
believed by the Bank to have been duly authorized by the Trust or upon reasonable reliance of information or records given or made by the Trust; except for any Losses arising out of or resulting from the Bank’s negligence or willful misconduct.
6. Standard of Care and Limitation of Liability
The Bank shall have no responsibility and shall not be liable for any Losses, except that the Bank shall be liable
to the Trust for direct money damages caused by its own negligence or willful misconduct or that of its employees. The parties agree that any encoding or payment processing errors shall be governed by this standard of care, and not Section 4-209 of
the Uniform Commercial Code which shall be superseded by this Article. In no event shall the Bank be liable for special, indirect or consequential damages, regardless of the form of action and even if the same were foreseeable. For purposes of this
Agreement, none of the following shall be or be deemed a breach of the Bank’s standard or care:
(a) The conclusive reliance on or use by the Bank or its agents or subcontractors of information, records, documents or services which (i) are
received by the Bank or its agents or subcontractors, and (ii) have been prepared, maintained or performed by the Trust or any other person or firm on behalf of the Trust including but not limited to any previous transfer agent or registrar.
5
(b) The conclusive reliance on, or the carrying out by the Bank or its agents or subcontractors of, any instructions or requests of the Trust or
instructions or requests on behalf of the Trust.
(c) The offer or sale of Shares by or for the Trust in violation of any requirement under the federal securities laws or regulations, or the
securities laws or regulations of any state that such Shares be registered in such state, or any violation of any stop order or other determination or ruling by any federal agency, or by any state with respect to the offer or sale of Shares in such
state.
7. Concerning the Bank
7.1
(a) The Bank may employ agents or attorneys-in-fact which are not affiliates of the Bank with the prior written consent of the Trust (which consent
shall not be unreasonably withheld); provided, however, that the Bank shall remain liable to the Trust for the acts and omissions of any agents or attorney-in-fact under this Section as it is for its own acts and omissions under this Agreement. The
Bank shall provide a list of unaffiliated agents and attorneys-in-fact, if any, retained by it to provide services to the Trust hereunder upon the reasonable written request of the Trust.
(b) The Bank may, without the prior consent of the Trust, enter into subcontracts, agreements and understandings with any Bank affiliate, whenever
and on such terms and conditions as it deems necessary or appropriate to perform its services hereunder. No such subcontract, agreement or understanding shall discharge Bank from its obligations hereunder.
7.2 The Bank shall be entitled to conclusively rely in good faith upon any written or oral instruction actually received by the Bank and reasonably
believed by the Bank to be duly authorized and delivered. The Trust agrees to forward to the Bank written instructions confirming oral instructions by the close of business of the same day that such oral instructions are given to the Bank. The
Trust agrees that the fact that such confirming written instructions are not received or that contrary written instructions are received by the Bank shall in no way affect the validity or enforceability of transactions authorized by such oral
instructions and effected by the Bank.
7.3 The Bank shall establish and maintain a disaster recovery plan and back-up system at all times satisfying the requirements of its regulators
(the “Disaster Recovery Plan and Back-Up System”). The Bank shall not be responsible or liable for any failure or delay in the performance of its obligations under this Agreement arising out of or caused, directly or indirectly, by circumstances
beyond its control which are not a result of its gross negligence, including without limitation, acts of God; earthquakes; fires; floods; wars; civil or military disturbances; sabotage; epidemics; riots; interruption, loss or malfunctions of
transportation, computer (hardware or software) or communication services; labor disputes; acts of civil or military authority; governmental actions; or inability to obtain labor, material, equipment or transportation, provided that the Bank has
established and is maintaining the Disaster Recovery Plan and Back-Up System, or if not, that such delay or failure would have occurred even if the Bank had established and was maintaining the Disaster Recovery Plan and Back-Up System. Upon the
occurrence of any such delay or failure the Bank shall use commercially reasonable best efforts to resume performance as soon as practicable under the circumstances.
7.4 The Bank shall have no duties or responsibilities whatsoever except such duties and responsibilities as are specifically set forth in this
Agreement and the Participation Agreement, and no
6
covenant or obligation shall be implied against the Bank in connection with this Agreement, except as set forth in this Agreement and
the Participation Agreement.
7.5 At any time the Bank may apply to an officer of the Trust for written instructions with respect to any matter arising in connection with the
Bank’s duties and obligations under this Agreement, and the Bank, its agents, and subcontractors shall not be liable for any action taken or omitted to be taken in good faith in accordance with such instructions. Such application by the Bank for
instructions from an officer of the Trust may, at the option of the Bank, set forth in writing any action proposed to be taken or omitted to be taken by the Bank with respect to its duties or obligations under this Agreement and the date on and/or
after which such action shall be taken, and the Bank shall not be liable for any action taken or omitted to be taken in accordance with a proposal included in any such application on or after the date specified therein unless, prior to taking or
omitting to take any such action, the Bank has received written or oral instructions in response to such application specifying the action to be taken or omitted. In connection with the foregoing, the Bank may consult with legal counsel of its own
choosing at its own expense, and advise the Trust if any instructions provided by the Trust at the request of the Bank pursuant to this Article or otherwise would, to the Bank’s knowledge, cause the Bank to take any action or omit to take any
action contrary to any law, rule, regulation or commercially reasonable practice for similarly situated service providers. In the event a situation or circumstance arises whereby the Bank adopts a course of conduct in reliance upon written legal
advice it has received (which need not be a formal opinion of counsel) and the course of conduct is not identical to the course of conduct contained in the instructions received from the Trust, the Bank may reply upon and follow the written legal
advice without liability hereunder provided it otherwise acts in compliance with this Agreement and consults with the Trust regarding its determination.
7.6 The Bank, its agents and subcontractors may act upon any paper or document, reasonably believed to be genuine and to have been signed by the
proper person or persons, or upon any instruction, information, data, records or documents provided to the Bank or its agents or subcontractors by or on behalf of the Trust by machine readable input, telex, CRT data entry or other similar means
authorized by the Trust, and shall not be held to have notice of any change of authority of any person, until receipt of written notice thereof from the Trust.
7.7 The Bank shall retain title to and ownership of any and all data
bases, computer programs, screen formats, report formats, interactive design techniques, derivative works, inventions, discoveries, patentable or copyrightable matters, concepts, expertise, patents, copyrights, trade secrets, and other related
legal rights utilized by the Bank in connection with the services provided by the Bank hereunder. Notwithstanding the foregoing, the parties hereto acknowledge that the Trust shall retain all ownership rights in Trust data residing on the Bank’s
electronic system.
7.8 Notwithstanding any provisions of this Agreement to the contrary, the Bank shall be under no duty or obligation to inquire into, and shall not be
liable for:
(a) The legality of the issue, sale or transfer of any Shares, the sufficiency of the amount to be received in connection therewith, or the authority
of the Trust to request such issuance, sale or transfer;
(b) The legality of the purchase of any Shares, the sufficiency of the amount to be paid in connection therewith, or the authority of the Trust to
request such purchase;
(c) The legality of the declaration of any dividend by the Trust, or the legality of the issue of any Shares in payment of any stock dividend; or
(d) The legality of any recapitalization or readjustment of the Shares.
7
8. Providing of Documents by the Trust and Transfers of Shares
8.1 The Trust shall promptly furnish to the Bank with a copy of its Declaration of Trust and Trust Agreement and all amendments thereto.
8.2 In the event that DTC ceases to be the Shareholder, the Bank shall re-register the Shares in the name of the successor to DTC as Shareholder upon
receipt by the Bank of such documentation and assurances as it may reasonably require.
8.3 The Bank shall have no responsibility whatsoever with respect to of any beneficial interest in any of the Shares owned by the Shareholder.
8.4 The Trust shall deliver to the Bank the following documents on or before the effective date of any increase, decrease or other change in the
total number of Shares authorized to be issued:
(a) A certified copy of the amendment to the Trust’s Declaration of Trust and Trust Agreement with respect to such increase, decrease or change; and
(b) An opinion of counsel for the Trust, in a form satisfactory to the Bank, with respect to (i) the validity of the Shares, the obtaining of all
necessary governmental consents, whether such Shares are fully paid and non-assessable and the status of such Shares under the Securities Act of 1933, as amended, and any other applicable federal law or regulations (i.e., if subject to registration, that they have been registered and that the Registration Statement has become effective or, if exempt, the specific grounds therefore), and (ii) the
due and proper listing of the Shares on all applicable securities exchanges.
8.5 Prior to the issuance of any additional Shares pursuant to stock dividends, stock splits or otherwise, and prior to any reduction in the number
of Shares outstanding, the Trust shall deliver to the Bank:
(a) A certified copy of the order or consent of each governmental or regulatory authority required by law as a prerequisite to the issuance or
reduction of such Shares, as the case may be, and an opinion of counsel for the Trust that no other order or consent is required; and
(b) An opinion of counsel for the Trust, in a form satisfactory to the Bank, with respect to (i) the validity of the Shares, the obtaining of all
necessary governmental consents, whether such Shares are fully paid and non-assessable and the status of such Shares under the Securities Act of 1933, as amended, and any other applicable federal law or regulations (i.e., if subject to registration, that they have been registered and that the Registration Statement has become effective or, if exempt, the specific grounds therefore), and (ii) the
due and proper listing of the Shares on all applicable securities exchanges.
8.6 The Bank and the Trust agree that all books, records, confidential, non-public, or proprietary information and data pertaining to the business of
the other party which are exchanged or received pursuant to the negotiation or the carrying out of this Agreement (“Confidential Information”) shall remain confidential, and shall not be voluntarily disclosed to any person other than its auditors,
accountants, regulators, employees, agents, attorneys-in-fact or counsel, except as may be, or may become required by law, by administrative or judicial order or by rule. The foregoing confidentiality obligation shall not apply to any information
to the extent: (i) it is already known to the receiving party at the time it is obtained; (ii) it is or becomes publicly known or available through no wrongful act of the receiving party: (iii) it is rightfully received from a third party who, to
the receiving party’s knowledge, is not under a duty of confidentiality; (iv) it is released by the protected party to a third party without restriction; or (v) it has been
8
or is independently developed or obtained by the receiving party without reference to the information provided by the protected party.
8.7 In case of any requests or demands for the inspection of the Shareholder records of the Trust, the Bank will promptly employ reasonable
commercial efforts to notify the Trust and secure instructions from an authorized officer of the Trust as to such inspection. The Bank reserves the right, however, to exhibit the Shareholder records to any person whenever it is reasonably advised
by its counsel that it may be held liable for the failure to exhibit the Shareholder records to such person.
9. Information Security
9.1 The Bank has implemented, and agrees to maintain, information security policies and programs consistent with industry guidelines and all
applicable statutes, rules or regulations, that include commercially reasonable administrative, physical and technical safeguards designed to (i) protect the privacy, confidentiality, integrity and availability, against any reasonably foreseeable
threats or hazards to the Trust’s Confidential Information and (ii) reasonably protect against accidental, unlawful or unauthorized access, copying, damage, destruction, disclosure, distribution, loss, manipulation, modification, processing, use,
reuse, interception, or transmission of such Confidential Information. This Article 9 shall survive the termination of this Agreement for so long as the Bank is in possession of the Trust’s Confidential Information.
10. Customer Right of Access.
The Bank shall, upon the Trust’s request, provide the Trust with a summary of the results of its latest SOC 1 or
equivalent control audit prepared by the Bank’s external auditors. In addition and no more than annually, the Bank will participate in a Trust’s reasonable information security questionnaire processes. Upon reasonable request, the Bank will arrange
for its relevant subject matter experts to meet with the relevant subject matter experts of the Trust once annually to review the Bank’s security controls and any deficiencies identified in the SOC 1 audit report. The Trust may view the Bank’s
security-related policies and procedures, however, no documentation may be copied, shared, transmitted or removed from the Bank’s premises, except as mutually agreed. The parties shall mutually agree upon a convenient time and place for such
meeting. Not more than once each year, and subject to the Bank’s reasonable security requirements and availability of personnel, the Bank will at the Trust’s request arrange a tour of the Bank’s data processing facilities for the Trust’s subject
matter experts. The Bank will also, subject to its reasonable security requirements, permit site visits of its data processing facilities by governmental agencies with regulatory authority over the Trust. In the event that the Trust identifies any
control deficiencies, the Bank will discuss such findings with the Trust and if appropriate the parties shall work together to develop a mutually agreeable remediation plan. All nonpublic documentation and information disclosed to the Trust in
accordance with this Section shall be deemed proprietary and confidential information of the Bank. The Trust shall not disclose such documentation or information to any third party or use it for any purpose other than evaluating the Bank’s security
controls, except that the Trust may disclose the Bank’s SOC 1 summary to the Trust’s external auditors, provided that such external auditors are required to maintain the confidentiality of the summary and any related information. The Trust shall
reimburse the Bank for any costs and expenses incurred in connection with any review of the Bank’s security controls.
11. Termination of Agreement
11.1 The term of this Agreement shall be three years commencing upon regulatory approval by the U.S. Securities and Exchange Commission permitting
shares of the Trust to be offered for sale (the "Initial Term") and shall automatically renew for additional one-year terms (each a “Subsequent Term”)
9
unless either party provides written notice of termination at least ninety (90) days prior to the end of the Initial Term or any
Subsequent Term or, unless earlier terminated as provided below:
(a) Either party hereto may terminate this Agreement prior to the expiration of the Initial Term in the event the other party breaches any material
provision of this Agreement, including, without limitation in the case of the Trust, its obligations under Section 2.1, provided that the non-breaching party gives written notice of such breach to the breaching party and the breaching party does
not cure such violation within 90 days of receipt of such notice.
(b) Either party hereto may terminate this Agreement immediately by sending notice thereof to the other party upon the happening of any of the
following: (i) a party commences as debtor any case or proceeding under any bankruptcy, insolvency or similar law, or there is commenced against such party any such case or proceeding; (ii) a party commences as debtor any case or proceeding seeking
the appointment of a receiver, conservator, trustee, custodian or similar official for such party or any substantial part of its property or there is commenced against the party any such case or proceeding; (iii) a party makes a general assignment
for the benefit of creditors; or (iv) a party states in any medium, written, electronic or otherwise, any public communication or in any other public manner its inability to pay debts as they come due. Either party hereto may exercise its
termination right under this Section 9.1(b) at any time after the occurrence of any of the foregoing events notwithstanding that such event may cease to be continuing prior to such exercise, and any delay in exercising this right shall not be
construed as a waiver or other extinguishment of that right.
(c) The Trust may terminate this Agreement at any time upon ninety (90) days’ prior written notice in the event
that the Trust’s sponsor determines to liquidate the Trust. The Bank may terminate this Agreement at any time upon ninety (90) days’ written notice for any reason. Should the Agreement be terminated by the Trust or the Bank for any reason and if
requested by the Trust, the Bank agrees to continue performing the services contemplated in this Agreement pursuant to the terms and conditions of this Agreement at the rates set forth in the then current fee schedule and for a reasonable period of
time to be agreed upon by the parties in good faith, in order to provide for the orderly transition of services to an alternative service provider designated by the Trust so that, to the extent feasible, the services are maintained without
interruption. The Trust shall reimburse (or cause the Sponsor to reimburse) the Bank for additional costs (to be mutually agreed upon by the parties) which are reasonably incurred by the Bank in the transition.
11.2 Should the Trust exercise its right to terminate, all out‑of‑pocket expenses associated with the movement of records and material will be borne
by the Trust.
11.3 The terms of Article 2 (with respect to fees and expenses incurred prior to termination), Article 5 and Article 6 shall survive any termination
of this Agreement.
12. Assignment
12.1 Neither this Agreement nor any rights or obligations hereunder may be assigned by either party without the written consent of the other party;
provided, however, either party may assign this Agreement to a party controlling, controlled by or under common control with it.
12.2 This Agreement shall inure to the benefit of and be binding upon the parties and their respective permitted successors and assigns.
10
13. Severability and Beneficiaries
13.1 In case any provision in or obligation under this Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the validity, the
legality and enforceability of the remaining provisions shall not in any way be affected thereby provided obligation of the Trust to pay is conditioned upon provision of services.
13.2 This Agreement is solely for the benefit of the Bank and the Trust, and none of any Authorized Participant (as defined in the Authorized
Participant Agreement), the Sponsor, any Shareholder or beneficial owner of any Shares shall be or be deemed a third party beneficiary of this Agreement.
14. Amendment
This Agreement may be amended or modified by a written agreement executed by both parties.
15. New York Law to Apply
This Agreement shall be construed in accordance with the substantive laws of the State of New York, without regard
to conflicts of laws principles thereof. The Trust and the Bank hereby consent to the jurisdiction of a state or federal court situated in New York City, New York in connection with any dispute arising hereunder. The Trust hereby irrevocably
waives, to the fullest extent permitted by applicable law, any objection which it may now or hereafter have to the laying of venue of any such proceeding brought in such a court and any claim that such proceeding brought in such a court has been
brought in an inconvenient forum. The Trust and the Bank each hereby irrevocably waives any and all rights to trial by jury in any legal proceeding arising out of or relating to this Agreement.
16. Merger of Agreement
This Agreement constitutes the entire agreement between the parties hereto and supersedes any prior agreement with
respect to the subject matter hereof whether oral or written.
17. Notices
All notices and other communications as required or permitted hereunder shall be in writing and sent by first class
mail, postage prepaid, addressed as follows or to such other address or addresses of which the respective party shall have notified the other.
If to the Bank:
The Bank of New York Mellon
240 Greenwich Street
New York, New York 10286
Attention: ETF Operations
with a copy to:
The Bank of New York Mellon
240 Greenwich Street
New York, New York 10286
Attention: Legal Dept. – Asset Servicing
11
If to the Trust:
Invesco Capital Management LLC
3500 Lacey Road, Suite 700
Downers Grove, IL 60515
Attention: Legal Department and Fund Treasurer
with a copy to:
11 Greenway Plaza, Suite 1000
Houston, TX 77046
Attention: General Counsel
18. Information Sharing
The Bank of New York Mellon Corporation is a global financial organization that provides services to clients
through its affiliates and subsidiaries in multiple jurisdictions (the “BNY Mellon Group”). The BNY Mellon Group may centralize functions including audit, accounting, risk, legal, compliance, sales, administration, product communication,
relationship management, storage, compilation and analysis of customer-related data, and other functions (the “Centralized Functions”) in one or more affiliates, subsidiaries and third-party service providers. Solely in connection with the
Centralized Functions, (i) the Trust consents to the disclosure of and authorizes the Bank to disclose information regarding the Trust (“Customer-Related Data”) to the BNY Mellon Group and to its third-party service providers who are subject to
confidentiality obligations with respect to such information and (ii) the Bank may store the names and business contact information of the Trust’s employees and representatives on the systems or in the records of the BNY Mellon Group or its service
providers. The BNY Mellon Group may aggregate Customer-Related Data with other data collected and/or calculated by the BNY Mellon Group, and notwithstanding anything in this Agreement to the contrary the BNY Mellon Group will own all such aggregated
data, provided that the BNY Mellon Group shall not distribute the aggregated data in a format that identifies Customer-Related Data with a particular customer. The Trust confirms that it is authorized to consent to the foregoing.
19. Counterparts
This Agreement may be executed by the parties hereto in any number of counterparts, and all of said counterparts
taken together shall be deemed to constitute one and the same instrument.
[Signature page follows.]
12
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in their names and on their behalf
by and through their duly authorized officers, as of the latest date set forth below.
INVESCO GALAXY SOLANA ETF
| By: |
/s/ Kelli Gallegos
Name: Kelli Gallegos Title: Principal Financial and Accounting Officer – Investment Pools |
Date:
THE BANK OF NEW YORK MELLON
| By: |
/s/ Gerard Connors
Name: Gerard Connors Title: Senior Vice President |
Date:
13
SCHEDULE A
Books And Records To Be Maintained By The Bank
Source Documents requesting Creations and Redemptions (including dates and times of orders)
Correspondence/AP Inquiries
Reconciliations, bank statements, copies of canceled checks, cash proofs
Daily/Monthly reconciliation of outstanding Shares between the Trust and DTC
Dividend Records
Year-end Statements and Tax Forms
14
EXHIBIT A
Form of Authorized Participant Agreement
15
Exhibit 10.8
Lukka Calculation Services Subscription Agreement
L2022100100317
v01-9-20-23
This Lukka Calculation Services Subscription Agreement (this “Subscription”) is entered into as of October 1, 2023 (the “Subscription Effective Date”) by and between Lukka Calculation Services, LLC (“Lukka Calculations”) and Invesco Ltd. (“Customer”).
Capitalized terms used and not specifically defined herein shall have the meanings set forth in that certain Master Services Agreement dated as of February 1, 2022 among
the parties hereto and Lukka, Inc. (the “MSA”). The terms and conditions of the MSA are hereby incorporated herein by reference and shall in all aspects govern this Subscription. To the extent that any of
the provisions of the MSA conflict with, or are inconsistent with, any of the provisions of this Subscription, the provisions of this Subscription will take precedence, unless specifically set forth to the contrary in this Subscription. By its
execution of this Subscription, Lukka Calculations is hereby joined as a party to the MSA and shall be bound by, and hereby agrees to, all representations, warranties, covenants, terms, conditions, duties and waivers applicable to “Lukka” under
the MSA.
| 1. |
Calculation Services Subscription. Lukka Calculations shall provide Customer with (i) the value of a particular calculation as further described in the table immediately below (each, a “Calculation”)
at a mutually agreed upon periodicity, (ii) updates to the Calculation at rebalance based on constituent selections and weightings determined by Customer and (iii) dissemination of the values of the Calculation to Customer and those
other identified parties (each a “Data Distribution Partner”) as may be mutually agreed upon by the parties (collectively, the “Services”), subject to the
terms and conditions set forth herein. Any reports or other deliverables to be prepared and delivered by Lukka Calculations as part of the Services (collectively, the “Deliverables”) will be
distributed to Customer and any Data Distribution Partners in a format and within a time frame to be determined by Lukka Calculations and Customer. All such Deliverables will be considered finalized upon receipt by Customer.
|
|
Group
|
Product
|
Quantity
|
Comments
|
|||||
|
Implementation
|
Standard Maintenance
|
1
|
$[ ] / year
|
|||||
|
Custom Pricing Methodology Build
|
—
|
N/A
|
||||||
|
Fungible
|
Single Asset
|
Real Time
|
1
|
$[ ] /year / product
|
||||
|
Spot Asset
|
Maximum of 5 products allowed
|
|||||||
|
Calculations
|
Minutely
|
—
|
||||||
|
Intraday
|
—
|
|||||||
|
End of Day (EOD)
|
—
|
|||||||
|
Multi-Asset
|
Real Time
|
—
|
||||||
|
Minutely
|
—
|
|||||||
|
Intraday
|
—
|
|||||||
|
End of Day (EOD)
|
—
|
|||||||
|
Other Asset
|
Single Asset
|
Real Time
|
—
|
|||||
|
Calculations
|
Minutely
|
—
|
||||||
|
Intraday
|
—
|
|||||||
|
End of Day (EOD)
|
—
|
|||||||
|
Multi-Asset
|
Real Time
|
—
|
||||||
|
Minutely
|
—
|
|||||||
|
Intraday
|
—
|
|||||||
|
End of Day (EOD)
|
—
|
|||||||
|
Other
|
Custom Build
|
—
|
| 2. |
Customer Acknowledgements. With respect to, and as a condition to, Lukka Calculations’ provision of the Services, Customer hereby acknowledges and agrees, in addition to and not in replacement of, any acknowledgements or
representations set forth in the MSA, that:
|
| a. |
Customer Data. Customer is solely responsible for providing Lukka Calculations with all Customer Data reasonably necessary to allow Lukka Calculations to perform the Services. Lukka Calculations will rely on any and all such
Customer Data provided by Customer and will not independently verify the accuracy or completeness of any such Customer Data. Accordingly, Lukka Calculations shall not be responsible for any inaccuracy or omissions in any such Customer
Data. Customer agrees to provide Lukka Calculations with the Customer Data in Lukka Calculations’ standard format and mechanisms (when needed).
|
| b. |
No Guarantee of Coverage. Lukka Calculations is not required to use any information provided to it by any third parties, including Customer, and Lukka Calculations may select the sources of such third party data at its sole
discretion. While Lukka Calculations will use commercially reasonable efforts to include the greatest coverage possible within an instrument type, due to the nature and availability of third party data, Lukka Calculations makes no
guarantee that any particular instrument or asset will be covered within the Services.
|
| c. |
NO RELIANCE. NEITHER LUKKA CALCULATIONS NOR ANY OTHER PARTY MAKES ANY WARRANTY, EXPRESS OR IMPLIED, REGARDING THE SERVICES OR THE RESULTS TO BE OBTAINED BY CUSTOMER OR ANY OTHER PERSON FROM THE USE OF THE SERVICES. CUSTOMER IS
SOLELY RESPONSIBLE FOR ANY RESULTS, INCLUDING ANY RESULTS REFLECTED IN A REGULATORY OR OTHER FILING, OBTAINED FROM THE SERVICES, INCLUDING, WITHOUT LIMITATION, THE QUALITY, USEFULNESS, COMPLETENESS, SUITABILITY, ACCURACY OR CONTENT OF
SUCH RESULTS. ACCORDINGLY, THE SERVICES, INCLUDING ANY DATA INCLUDED THEREIN OR RELATING THERETO AND ANY DELIVERABLES DELIVERED THEREWITH, ARE PROVIDED “AS IS” WITHOUT WARRANTY, EXPRESS OR IMPLIED, OF ANY KIND, TO CUSTOMER OR ANY THIRD
PARTY, AND LUKKA CALCULATIONS HEREBY DISCLAIMS ANY REPRESENTATION OR WARRANTY AS TO (I) THE ACCURACY, FITNESS, UTILITY, COMPLETENESS OR APPLICATION OF THE SERVICES (INCLUDING ANY DELIVERABLES DELIVERED THEREWITH) FOR ANY PURPOSE,
INCLUDING, BUT NOT LIMITED TO, PRICING, TRADING, HEDGING, RISK MANAGEMENT OR ACCOUNTING DECISIONS AND (II) THE RESULTS TO BE OBTAINED BY CUSTOMER OR ANY THIRD PARTY IN CONNECTION WITH THE USE OF THE SERVICES (INCLUDING ANY DELIVERABLES
DELIVERED THEREWITH). CUSTOMER UNDERSTANDS AND AGREES THAT ALL DECISIONS CONCERNING PRICING, TRADING, HEDGING, RISK MANAGEMENT AND ACCOUNTING DECISIONS ARE CUSTOMER’S SOLE RESPONSIBILITY, TO BE MADE USING CUSTOMER’S OWN JUDGMENT.
|
| d. |
Dissemination and Publication. Customer may distribute the Services, including any Deliverables, to any third party (including any Data Distribution Partner) and any third party (including any Data Distribution Partner) may
make use of the Services, including any Deliverables, in connection with any regulatory, investor or other communication or filing by or on behalf of Customer, so long as, in each instance, Customer (i) attributes the Services to Lukka
Calculations and (ii) agrees to indemnify any such third party recipient of the Services from and against any losses incurred by such recipient as a result of or in connection with the Services. Customer hereby agrees to indemnify,
defend and hold harmless Lukka Calculations and its affiliates and its and their directors, officers, agents, employees, successors and assigns and all providers of third party data, and each of their affiliates, directors, officers,
agents, employees, members, partners, successors and assigns (the “Indemnitees”) from and against any and all losses, liabilities, damages, costs (including reasonable attorneys’ fees) and expenses arising as a result of any claims,
suits or proceedings brought by any third party against any of the Indemnitees arising from or in connection with such third party’s use of the Services.
|
| e. |
Public Appearance. Lukka Calculations shall not be required to give testimony as a witness or otherwise appear in any capacity in any legal or administrative hearing or procedure, or to have any continued service
responsibility unless compensated in advance by Customer.
|
| f. |
No Duty to Update. Any calculations provided as part of the Services reflect the prevailing circumstances at the original date of delivery of the Services by Lukka Calculations, and unless otherwise agreed between Customer and
Lukka Calculations in writing, Lukka Calculations expressly disclaims any obligation to update, revise or correct any such calculations to reflect the occurrence of future events, even in the event that any or all of the information
underlying such calculations is shown to be in error.
|
| g. |
Services Not Professional Advice. In no event shall the Services be construed as the rendering by Lukka Calculations of professional advice or services. Before making any decision or taking any action regarding its instruments
or the tax treatment thereof, Customer shall consult with an appropriate, licensed tax, accounting, or other professional. For the avoidance of doubt, Lukka Calculations’ personnel are not investment advisors or investment
professionals. Such expertise is not covered in the Services and the Customer agrees that, if such expertise is required, it shall be provided by others at the direction and discretion of the Customer.
|
| h. |
No Personal Liability. Lukka Calculations is a limited liability company and therefore any claim made by the Customer arising out of any act or omission of any director, officer, agent, or employee of Lukka Calculations, in
the execution or performance of its contractual or professional responsibilities shall be made solely against Lukka Calculations and not against any such director, officer, agent, or employee.
|
| 3. |
Description of Fees. The Base Fees described below are based on the Services subscribed for by Customer from time to time pursuant to this Subscription (collectively, the “Service Fees”).
|
|
Description of Base Fees
|
Fees
|
|
|
Implementation Fees
|
$ [] /year
|
|
|
One-Time Implementation Discount
|
||
|
Calculation Fees
|
$ [] /year
|
|
|
One-Time Early Signing Discount (Applicable if this Subscription is executed by Customer prior to 9/29/23, 5pm EST)
|
$ []
|
|
|
First Year Minimum Fees
|
$ []
|
| 4. |
Reimbursable Expenses. Any travel or other expenses required in connection with or related to Lukka Calculations’ responsibilities or services under this Subscription will be approved by Customer in advance, and Customer will
promptly reimburse Lukka Calculations for any so approved expenses.
|
| 5. |
Billing.
|
| a. |
All one-time Service Fees will be billed on the Subscription Effective Date.
|
| b. |
All recurring Service Fees will be billed annually in advance beginning on the Subscription Effective Date.
|
| c. |
All Service Fees are non-refundable, no refunds or credits for partial months of this Subscription, downgrades, or refunds for unused Services are permitted.
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| 6. |
Subscription Period. One (1) year initial term commencing on the Subscription Effective Date. Thereafter this Subscription will automatically renew for successive Subscription Periods as further described in Section 13.1 of
the MSA.
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| 7. |
Early Termination Fee. If Lukka Calculations terminates this Subscription for Customer’s nonpayment or if this Subscription is otherwise abandoned or disregarded by Customer before the end of the then current Subscription
Period other than for reason of Lukka Calculations’s material breach of the terms hereof or the MSA, Customer shall pay to Lukka Calculations, by wire transfer of immediately available funds, in accordance with the billing terms in the
MSA, an early termination fee equal to $[ ], which such amount shall compensate Lukka Calculations for the considerable time, effort and expense undertaken by Lukka Calculations to service and prepare for Customer, including, for
example, contracting, scoping, and/or onboarding Customer. This early termination fee shall be reduced by the Service Fees (if any) already paid by Customer pursuant to this Subscription and, once received by Lukka Calculations, the
early termination fee shall be deemed to be liquidated damages and Lukka Calculations shall not seek to recover any other money damages or obtain any equitable relief from Customer with respect to such termination.
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| 8. |
Subscription Additions.
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| a. |
Customer may at any time request (via email) to add up to four (4) additional Fungible Spot Asset Indices—
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| b. |
Single Asset—Real Time that were not included as of the Subscription Effective Date (each, a “Subscription Addition”), in each case for the applicable increase to the fees set forth in Section 3 above.
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| c. |
Any Subscription Additions agreed to and accepted by Lukka (email being sufficient for such purpose) will begin promptly, but no later than the first day of the next calendar month, and billing for any Subscription Additions will
begin on the first day of the next calendar month. (By way of example, a Subscription Addition requested by Customer on February 5th may potentially begin in February, but will be billable to Customer as of March 1st).
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| d. |
With respect to any Subscription Addition that is renewable, the initial bill for such Subscription Addition will include all fees due by Customer for such Subscription Addition from the start date of such Subscription Addition
through Customer’s next regular recurring billing date. Thereafter, such Subscription Additions will be billed as part of Customer’s regular recurring Services until canceled per the MSA. (By way of example, if Customer’s recurring fees
are billed annually on January 1st and Customer then adds a recurring Subscription Addition that begins on February 5th, on March 1st, Customer will receive an initial invoice which bills Customer for the initial ten months of the
Subscription Addition (March 1 through December 31); and thereafter, the recurring Subscription Addition will be billed annually on January 1st just like Customer’s other recurring fees).
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| e. |
For the avoidance of doubt, no Services may be removed or downgraded (whether by e-mail request or otherwise) during a Subscription Period.
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[Signature Page Follows]
In Witness Whereof, the parties authorized representatives have executed this Lukka Calculation Services Subscription as of the Subscription Effective Date set forth above.
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CUSTOMER INVESCO LTD
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LUKKA CALCULATION SERVICES, LLC
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By: Lukka, Inc., its Sole Member
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Signature: /s/Andy Stokes
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Signature: /s/ Robert Materazzi
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By: Andy Stokes
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By: Robert Materazzi
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Title: Strategic Sourcing Manager
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Title: Chief Executive Officer
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Date: 29th September 2023
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Date: 9/29/2023
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Address: Perpetual Park Drive, Henley-on- Thames, Oxfordshire RG9 1HH UK
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Address: 800 Laurel Oak Drive, Unit 300
Naples, FL 34108
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Billing Contact:
Billing Email:
Exhibit 10.9
EXECUTION AGENT AGREEMENT
This Execution Agent Agreement is entered into as of December 22, 2023 (the “Effective Date”), by and between Invesco Capital Management LLC (“Invesco”)
and Galaxy Digital Funds LLC (“Galaxy”). Invesco and Galaxy may each be referred to herein individually as a “Party” and collectively as the “Parties.”
WHEREAS the Parties have entered into an agreement to collaborate to design, develop and co-market United States ETFs that invest in Digital Assets (the “Strategic Alliance Agreement”);
WHEREAS the Strategic Alliance Agreement provides that Galaxy will provide certain execution agent services to Invesco; and
WHEREAS the Parties have entered into this Execution Agent Agreement (the “Agreement”) to detail the execution agent services to be
provided by Galaxy;
NOW THEREFOR, in consideration of the mutual promises and covenants set forth below and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the Parties hereby agree as follows:
1.1. Usage. Capitalized
terms used in this Agreement and not otherwise defined herein shall have the meanings ascribed to such terms in the Strategic Alliance Agreement.
2.1. Execution Agent Services.
For each Digital Asset ETF, Invesco hereby appoints Galaxy as Execution Agent and Galaxy shall, in such capacity, provide the services set out on Exhibit A (the “Execution Agent Services”). Invesco represents,
warrants and agrees that it will have, at all times necessary to permit Galaxy to perform the Execution Agent Services for a Digital Asset ETF, full power and authority on behalf of such Digital Asset ETF to so appoint Galaxy and to authorize Galaxy
to act as agent on behalf of such Digital Asset ETF in the manner contemplated hereby. Galaxy will be fully responsible for providing the Execution Agent Services (a) in accordance with all applicable Laws, codes, ordinances, orders, rules and
regulations of local, state, and federal governments and agencies and instrumentalities, including, without limitation, all standards and regulations of appropriate regulatory commissions and similar agencies, as each of the foregoing may be updated
from time to time; (b) in accordance with the Proper Instructions (defined below), as well as the terms and subject to the conditions set forth on Exhibit A, the related Product Specification, and this Agreement; (c) using personnel of required
skill, experience, and qualifications; (d) in a timely, workmanlike, and professional manner; and (e) in accordance with industry standards in Galaxy’s field ((a) – (e), the “Performance Standards”). Prior to
the date on which the Execution Agent Services are to begin, Galaxy will obtain, and at all times during the Term of this Agreement maintain, all necessary up-to-date licenses, registrations, qualifications and consents required by or applicable to
the provision of the Execution Agent Services. Galaxy’s personnel and representatives will comply with all policies and procedures communicated by Invesco, including, without limitation, Invesco’s security and data protection policies. For the sake
of clarity, nothing in this Agreement will be construed to prevent Invesco, in its sole discretion, from itself (or through its Affiliates) performing services that are similar to or identical to the Execution Agent Services, in which case Galaxy,
upon instruction from Invesco, shall cease to perform such Execution Agent Services for some or all of the Digital Asset ETFs, as applicable. Invesco acknowledges that Galaxy’s provision of the Execution Agent Services is not exclusive to the Digital
Asset ETFs, and that, subject to the terms of this Agreement, Galaxy is free to provide such services to other persons other than in connection with a Future Digital Asset ETF, or the sponsor/issuer thereof in connection with a Future Digital Asset
ETF (it being understood that Galaxy may provide such services in connection with a New
Product described in a New Product Proposal that has been rejected by Invesco pursuant to Section 2.11 of the Strategic Alliance Agreement).
| 2.2. |
Proper Instructions
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2.2.1 Subject to
the other provisions of this Agreement and Exhibit A hereof, with respect to the Execution Agent Services, Galaxy shall act on instructions it reasonably believes to be from Invesco upon receipt of any written or faxed authorization or instruction
including any instructions it reasonably believes to have been transmitted by electronic communication by Invesco or a Third Party designee as previously communicated to Galaxy, or by such other means as may from time to time be agreed between
Invesco and Galaxy (“Proper Instructions”). Proper Instructions may be in the form of standing instructions.
2.2.2 Galaxy is under no obligation
to review the propriety or legality of any Proper Instructions received by it.
2.2.3 Galaxy shall act on Proper
Instructions unless it believes, acting in good faith, that they are manifestly fraudulent, unlawful or constitute a suspicious transaction for the purposes of applicable money laundering regulations, have been given in error, are inadequate, are
unclear, do not make fully apparent the intention of Invesco with respect to the applicable Digital Asset ETF or a transaction in which it is involved, or are not communicated to Galaxy prior to any dealing deadlines agreed between Invesco and Galaxy
from time to time. Galaxy shall promptly inform Invesco where it is not willing to act on any Proper Instructions for any of the reasons provided in this Section 2.2.3, provided that Galaxy shall be under no
obligation to inform Invesco in such circumstances where to do so may contravene applicable Law.
2.2.4 Unless otherwise provided in the
Agreement, a Proper Instruction continues in full force and effect until specifically cancelled or superseded by a subsequent Proper Instruction. Galaxy will use its reasonable efforts to take account of any Proper Instruction being specifically
cancelled or superseded by a subsequent Proper Instruction, but shall not be liable for acting upon any Proper Instruction that has been so cancelled or superseded if it has not had adequate time acting diligently to take account of such Proper
Instruction being so cancelled or superseded.
2.2.5 For
avoidance of doubt, subject to the conditions of this Section 2.2, the failure of Galaxy to act upon, or in accordance with, a Proper Instruction shall be deemed a material breach of this agreement.
2.3. Galaxy’s Authority. Galaxy’s duties and authority to act as Execution Agent hereunder, as well as other rights and obligations contained herein, are limited to the duties and authority expressly provided for in this
Agreement and any other duties that Invesco and Galaxy agree in writing in accordance with Section 11.15 of the Strategic Alliance Agreement shall be performed by Galaxy from time to time and no implied duties or obligations shall be read into this
Agreement or the Strategic Alliance Agreement. Galaxy shall not, and shall not be deemed to, assume the obligations or duties of Invesco with respect to any Digital Asset ETF unless such duties and obligations are expressly provided to be performed
by Galaxy pursuant to this Agreement or the Parties agree in writing in accordance with Section 11.15 of the Strategic Alliance Agreement that Galaxy shall perform such duties.
2.4. Exclusivity.
The exclusivity provisions set forth in Section 2.10 of the Strategic Alliance Agreement shall govern this Agreement.
3.1. Confidentiality
Obligations. The Party receiving Confidential Information (the “Receiving Party”) of the other Party (the “Disclosing Party”) shall keep confidential, and shall
exercise at least the same degree of care (and in no event less than a reasonable degree of care) with respect to, the Disclosing Party’s Confidential Information that the Receiving Party exercises to protect its own Confidential Information and, at
a minimum, the receiving Party shall adopt, maintain and follow security practices and procedures that are sufficient to safeguard the Disclosing Party’s Confidential Information from any (a) unauthorized disclosure, access, use or modification, and
(b) misappropriation, theft, destruction, or loss. Without limiting the generality of the foregoing, the Receiving Party shall only use or reproduce the Disclosing Party’s Confidential Information to the extent necessary to enable the Receiving Party
to fulfill its obligations or exercise its rights under this Agreement.
3.2. Authorized Disclosure.
The obligations of confidentiality under the Agreement shall not apply to the extent that disclosure is reasonably necessary to:
| 3.2.1 |
Prosecute or defend litigation;
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3.2.2 comply with applicable Laws,
including the rules and regulations promulgated by the United States Securities and Exchange Commission;
provided, that in each case, such Party shall reasonably consider the other Party’s comments regarding confidential treatment sought
for such disclosure.
3.3. Without limiting either Party’s
obligations under Section 3.1 or exceptions in 3.2, each Party (a) shall maintain and comply with internal policies, procedures and controls reasonably designed to prevent information related to the Digital Asset ETFs, and the Execution Agent
Services being performed for the Digital Asset ETFs, from being disclosed to, shared with or used by any Third Party or, with respect to Galaxy, any Affiliate whose primary or principal business is trading Digital Assets or that may use such
information to the detriment of the Digital Asset ETF, and (b) shall not disclose, or allow to be disclosed, such information to such Persons.
4.1. Compliance with Law -
General. In connection with its participation in the Strategic Alliance, and in carrying out its obligations and services under this Agreement, each Party shall comply with all applicable Laws, maintain all required regulatory registrations
and licenses, shall not misappropriate, infringe or otherwise violate any proprietary interest (including intellectual property rights), and shall not materially breach any contractual agreement or any civil duty imposed by law, such as tort duties,
insofar as such contractual agreements or civil duties relate to such Party’s ability to perform its obligations under this Agreement. During the Term of this Agreement, the Parties acknowledge and agree that each Party has an affirmative obligation
to promptly report to the other Party any concerns about, or indications of, actual or possible violations of applicable Laws of which they become aware that would reasonably be expected to have a material effect on either Party’s ability to perform
its obligations under this Agreement. If any change in applicable Law requires either Party to adopt specific standards related to Execution Agent Services performed under this Agreement, or to a Digital Asset ETF, then the Parties agree to make
modifications to the Execution Agent Services or Digital Asset ETFs as are required to enable the Parties to comply with any changes in applicable Law. Each Party shall make all required changes at no charge to the other Party, it being understood
that Invesco shall have sole discretion over any modifications to the Digital Asset ETFs. Galaxy shall cooperate with Invesco in connection with any investigation of Invesco or any Digital Asset ETF by the Securities and Exchange Commission or any
other Governmental Authority; provided that any reasonable costs and expenses incurred by Galaxy in connection with any such investigation shall be reimbursed by Invesco.
4.2. Export
Controls. Unless authorized by a United States regulation or export license, neither Party shall, in connection with the activities contemplated by this Agreement, export or re-export, directly or indirectly any product (or any part of a
product), process, or service to: (i) any country (or nationals of a country) in Country Group E of the Export Administration Regulations of the United States (“EAR”) or any other country subject to sanctions
administered by the Office of Foreign Assets Control, or (ii) any non-civil (i.e. military) end users or for any non-civil end uses in any country in Country Group D:1 of the EAR, as these lists may be modified from time-to-time. Each Party
represents, warrants and covenants that it is not currently debarred, suspended or otherwise prohibited or restricted from exporting, re- exporting, receiving, purchasing, processing or otherwise obtaining any item, product, article, commodity,
software or technology regulated by any agency of the United States, and that it shall immediately notify the other Party in the event that any of the foregoing occurs. The Parties agree to comply with any import or other restrictions and to use
commercially reasonable efforts to cooperate with and assist the other Party in connection therewith and in connection with the EAR restrictions.
4.3. Anti-Money
Laundering and Know-Your-Customer. Each Party shall maintain policies and implement procedures and controls, including, without limitation, policies and procedures for sanctions screening, reasonably designed to ensure compliance with all
applicable Laws pertaining to anti-money laundering, anti-terrorism and sanctions, including Section 326 of the USA PATRIOT Act (31 U.S.C. § 531.8(I)), and shall comply with all such applicable Laws.
4.4. Cyber Security. Both
Parties shall comply with applicable privacy and cyber security Laws. The Parties shall use all reasonable legal, organizational, physical, administrative and technical measures, and security procedures to safeguard and ensure the security of their
respective systems and any data provided by the other Party or relating to a Digital Asset ETF against unauthorized access, disclosure, duplication, use, modification or loss.
4.5. Diversity, Equity and
Inclusion. The Parties shall comply with all anti-discrimination and equal opportunities laws and regulations applicable to each of its personnel, including the Americans with Disabilities Act 1964, the Telecommunications Act 1996 and other
similar laws.
5.1. Indemnification.
The indemnification provisions set forth in Section 7 of the Strategic Alliance Agreement shall apply to this Agreement.
6.1. Limitation of Liability.
The limitation of liability provisions set forth in Section 8 of the Strategic Alliance Agreement shall apply to this Agreement.
7.1. Representations and
Warranties of Each Party. Each of the Parties makes the following representations, warranties and covenants:
7.1.1 Authority.
As of the Effective Date, it has the full right, power and authority to enter into this Agreement. This Agreement has been duly executed by such Party and constitutes a legal, valid and binding obligation of such Party, enforceable in accordance with
its terms, except as such enforceability may be limited by considerations of public policy, the effects of bankruptcy, insolvency or other
applicable Laws affecting the enforcement of creditors’ rights generally and judicial principles affecting the availability of specific performance and general principles of equity, whether considered in a proceeding
at law or in equity.
7.1.2 No Conflicts. The execution, delivery and performance of this Agreement by such Party does not conflict with or materially breach any agreement, instrument or understanding, oral or written, to
which it is a party or by which it is bound, nor violate any applicable Laws of any Governmental Authority having jurisdiction over it.
7.1.3 Data Privacy and Security. It has been and is compliant with applicable privacy and cyber security Laws, and it has and uses reasonable legal, organizational, physical, administrative and technical measures, and security procedures to
safeguard and ensure the security of its systems and data against unauthorized access, disclosure, duplication, use, modification or loss. It has policies, procedures and controls in place that are reasonably designed to prevent information related
to the Digital Asset ETFs, and, in the case of Galaxy, the Execution Agent Services being performed for the Digital Asset ETFs, from being disclosed to, shared with or used by any Third Party, and any Affiliate whose primary or principal business is
trading Digital Assets or that may use such information to the detriment of the Digital Asset ETF.
7.2. Additional
Representations and Warranties of Galaxy. Galaxy represents, warrants and covenants as of the Effective Date that its performance of the Execution Agent Services on behalf of the Digital Asset ETFs will not in any way result in any payment,
commission or other form of compensation to Galaxy or any Affiliate of Galaxy, other than the fees contemplated by this Agreement.
7.3. Disclaimer of Warranties.
EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, NONE OF THE PARTIES OR THEIR AFFILIATES MAKES ANY REPRESENTATION OR EXTENDS ANY WARRANTY OR CONDITION OF ANY KIND, EITHER EXPRESS OR IMPLIED, WITH RESPECT TO THE PRODUCT SPECIFICATIONS, DIGITAL ASSET
ETFS OR ANY RELATED INTELLECTUAL PROPERTY, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. EACH PARTY UNDERSTANDS AND AGREES THAT NEITHER PARTY CAN ASSURE THE SUCCESSFUL REGISTRATION, LAUNCH, PROFIT
OR COMMERCIAL VIABILITY OF ANY DIGITAL ASSET ETF.
8.1 Term and Termination.
The term and termination provisions set forth in Section 10 of the Strategic Alliance Agreement shall apply to this Agreement.
9.1. Dispute Resolution.
The Parties shall resolve any dispute, claim or controversy between the Parties arising under this Agreement (any such dispute, claim or controversy, an “Agreement Dispute”) pursuant to the terms of this
Section 9.1.
9.1.1 In the event of an Agreement Dispute, the Parties
shall discuss and negotiate in good faith a solution acceptable to the Parties and in the spirit of this Agreement. If, after negotiating in good faith pursuant to the foregoing sentence, the Parties fail to reach agreement within thirty (30) days
(or such longer period as agreed in writing by the Parties), then the Agreement Dispute may be referred to the executive officers of each Party for resolution at the request of either Party.
9.1.2 If, after negotiating in good
faith, the Parties’ executive officers fail to reach agreement within ten (10) days of submission to such executive officers (or such longer period as agreed in writing by the Parties), then either Party may submit the Agreement Dispute to any
mutually agreed to mediation service for mediation by providing to the mediation service a joint, written request for mediation, setting forth the subject of the dispute and the relief requested. The Parties shall cooperate with one another in
selecting a mediation service, and shall cooperate with the mediation service and with one another in selecting a neutral mediator and in scheduling the mediation proceedings. The Parties shall use commercially reasonable efforts in participating in
the mediation. The mediator’s fees and expenses and the costs incidental to the mediation shall be shared equally between the Parties. The Parties further agree
that all offers, promises, conduct, and statements, whether oral or written, made in the course of the mediation by any of the parties, their agents, employees, experts, and attorneys, and by the
mediator and any employees of the mediation service, are confidential, privileged, and inadmissible for any purpose, including impeachment, in any litigation, arbitration or other proceeding involving the parties, provided that evidence that is
otherwise admissible or discoverable shall not be rendered inadmissible or non- discoverable as a result of its use in the mediation.
9.1.3 If mediation pursuant to
Section 9.1.2 fails to reach agreement within ninety (90) days of submission to mediation, then the Agreement Dispute may be resolved and settled by arbitration administered by the American Arbitration Association in accordance with its Commercial
Arbitration Rules. A reasoned written award shall be required and shall be made within nine (9) months of the filing of the notice to arbitrate and the arbitrator(s) shall agree to comply with this schedule before accepting appointment. The
arbitrator(s) shall have authority to award damages to either Party, and to award the payment of attorney fees and costs to the prevailing Party. Judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction
thereof. The arbitration shall be conducted in English language in accordance with the United States Arbitration Act.
9.1.4 If the Parties cannot resolve any
Agreement Dispute pursuant to the other provisions of this Section 9.1, then either Party may file suit in a court of competent jurisdiction in accordance with the provisions of Section 9.6.
9.2. Equitable Relief. Notwithstanding
anything in this Agreement to the contrary, a Party may seek a temporary restraining order or a preliminary injunction from any court of competent jurisdiction in order to prevent immediate and irreparable injury, loss, or damage on a provisional
basis, pending the decision of the arbitrator(s) on the ultimate merits of any dispute. Each Party acknowledges that a breach by a Party of Section 3 (Confidentiality) may cause the non-breaching Party irreparable damages, for which an award of
damages would not be adequate compensation and agrees that, in the event of such breach or threatened breach, the non-breaching Party shall be entitled to seek equitable relief, including a restraining order, injunctive relief, specific performance
and any other relief that may be available from any court, in addition to any other remedy to which the non-breaching Party may be entitled at law or in equity. Such remedies shall not be deemed to be exclusive but shall be in addition to all other
remedies available at law or in equity.
9.3. Independent Contractors.
Nothing in this Agreement shall create or imply an association, partnership or joint venture between the Parties hereto, it being agreed and understood that the Parties are independent contractors; and neither Party, with respect to a third party,
shall have the power or authority to bind or obligate the other Party in any way.
9.4. Notices. All
notices, requests, consents, claims, demands, waivers, and other communications hereunder shall be in writing addressed to the other Party at its address as set forth below or at such different address of which written notice has been given in
accordance with this paragraph:
If to Invesco:
Invesco Capital Management LLC
Attn: Adam Henkel
3500 Lacey Road, Suite 700
Downers Grove, Illinois
Email: Adam.Henkel@Invesco.com
Phone: 630-684-6724
If to Galaxy:
Galaxy Digital Funds LLC
Attn: Andrew Siegel
107 Grand Street, 8th Floor
New York, NY 10013
Email: Andrew.Siegel@galaxydigital.io
Phone: 212-390-9216
Notices sent in accordance with this Section shall be deemed effectively given: (a) when received, if delivered by hand (with written confirmation of receipt); (b) when received, if sent by a nationally recognized
overnight courier (receipt requested); (c) on the date sent by e-mail (so long as the recipient acknowledges receipt), if sent during normal business hours of the recipient, and on the next business day if sent after normal business hours of the
recipient; or (d) on the third (3rd) business day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid.
9.5. Further Assurances and
Cooperation. Each Party agrees that it shall execute and deliver, or cause the execution and delivery of, such further documents and instruments as may be reasonably necessary or proper to fully effectuate this Agreement and the transactions
contemplated hereby.
9.6. Governing
Law. This Agreement, and the construction, performance and validity of this Agreement, shall be governed by and construed in accordance with the laws of the State of New York without regard to the conflicts of law principles of the State of
New York.
9.7. Force Majeure.
Neither party shall be liable or responsible to the other party, nor be deemed to have defaulted under or breached this Agreement, for any failure or delay in fulfilling or performing any term of this Agreement when and to the extent such failure or
delay is caused by: (a) acts of God, (b) flood, fire, or explosion, (c) war, terrorism, invasion, riot, or other civil unrest, (d) embargoes or blockades in effect on or after the Effective Date, (e) pandemic, or (f) national or regional emergency
(each of the foregoing, a “Force Majeure Event”), in each case ((a) – (f)) provided that (i) such event is outside the reasonable control of the affected Party, (ii)
the affected Party provides prompt notice to the other Party, stating the period of time the occurrence is expected to continue, and (iii) the affected Party uses diligent efforts to end the failure or delay and minimize the effects of such Force
Majeure Event. A Party may terminate this Agreement pursuant to Section 10.2.1 of the Strategic Alliance Agreement if a Force Majeure Event affecting the other Party continues substantially uninterrupted for a period of thirty (30) days or more.
| 9.8. |
Assignment; Binding Effect.
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9.8.1 Assignment to Affiliates. Galaxy and Invesco may assign this Agreement or otherwise transfer their rights and obligations hereunder to an Affiliate by providing (a) ninety (90) days’ prior written notice to the other Party, and (b)
any such other information about the assignment or assignee as reasonably requested by the other Party.
9.8.2 Assignment to Non-Competing Parties. Subject to and except as provided by Section 9.8.3, neither this Agreement nor any rights or obligations of a Party hereunder may be assigned or otherwise transferred to a
Third Party without the prior written consent of the other Party, provided, however, that such written consent shall not be unreasonably withheld in instances in which the Third Party is not a Competing Third
Party (as defined in Section 9.8.3) of the other Party. For purposes of the preceding sentence, and without limiting its generality, any merger, consolidation, or external reorganization involving a Party (regardless of whether that Party is a
surviving or disappearing entity)
and a Third Party shall be deemed to be a transfer of rights, obligations, or performance under this Agreement for which the other Party’s prior written consent is required, but, provided that the Third Party is not a
Competing Third Party of the other Party, shall not be unreasonably withheld by the other Party.
9.8.3 Assignment to Competing Third Parties. Notwithstanding anything to the contrary in this Section 9.8, neither this Agreement nor any rights or obligations of a Party hereunder may be assigned or otherwise transferred to a Third Party
that, as part of its business operations prior to such attempted assignment or transfer offered, developed, marketed, sold or otherwise commercialized products or services that, in the non-assigning Party’s reasonable belief, involved capabilities
and functions duplicative of, or similar in nature to, that of the non-assigning Party (such Third Party being a “Competing Third Party” of the non-assigning Party), without the consent of the non-assigning
Party, which may be withheld for any reason. For purposes of the preceding sentence, and without limiting its generality, any merger, consolidation, or external reorganization involving a Party (regardless of whether that Party is a surviving or
disappearing entity) and a Competing Third Party of the other Party shall be deemed to be a transfer of rights, obligations, or performance under this Agreement for which the other Party’s prior written consent is required and may be withheld for any
reason.
9.8.4 Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective heirs, successors and permitted assigns. Any purported assignment, delegation, or transfer
in violation of this Section 9.8 is void.
9.9. No
Third-Party Beneficiaries. This Agreement is entered into by Invesco and Galaxy as a principal contracting party and not as agent for any other person. Except to the extent expressly stated in this Agreement, nothing contained in this
Agreement shall be interpreted as creating any rights in any third parties or any contractual obligations on the part of the Parties, to any person or persons other than the Parties, including either arising out of, in connection with or relating to
the Contracts (Rights of Third Parties) Act 1999 or otherwise. Except to the extent expressly stated in this Agreement, the Parties do not intend that any term of this Agreement shall be enforceable, by virtue of any statutory authority or otherwise,
by any person who is not a party to this Agreement.
9.10. Performance By
Affiliates. Obligations and tasks of a Party may be performed or managed by such Party’s Affiliates, provided, with respect to Galaxy, that such Affiliate’s primary or principal business is not
trading Digital Assets. Each Party hereby guarantees the performance by its Affiliates of such Party’s obligations under this Agreement, shall remain jointly and severally liable for its Affiliates’ performance, and shall cause its Affiliates to
comply with the provisions of this Agreement in connection with such performance. Any breach by a Party’s Affiliate of any of such Party’s obligations under this Agreement shall be deemed a breach by such Party, and the other Party may proceed
directly against such Party without any obligation to first proceed against such Party’s Affiliate.
9.11. Counterparts; Facsimile
Signatures. This Agreement may be executed in counterparts, each of which counterparts, when so executed and delivered, shall be deemed to be an original, and both of which counterparts, taken together, shall constitute one and the same
instrument even if both Parties have not executed the same counterpart. Signatures provided by any photocopy and transmitted by facsimile, pdf file or other electronic means shall be deemed to be original signatures.
10.1 Fees; Payment Terms.
The execution agent fee, payment and related terms set forth in Section 3 of the Strategic Alliance Agreement shall apply to this Agreement.
11.1 Intellectual
Property. The intellectual property provisions set forth in Section 4 of the Strategic Alliance Agreement shall apply to this Agreement.
12.1 Conflicts Rule. In case of any
inconsistency, with respect to the subject matter hereof, between the provisions of this Agreement and the Strategic Alliance Agreement, the provisions of this Agreement shall control.
{Signature page follows}
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed as of the Effective Date.
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INVESCO CAPITAL MANAGEMENT LLC
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GALAXY DIGITAL FUNDS LLC
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By:
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By: /s/ William Burt
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Name: Brian Hartigan
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Name: William Burt
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Title: Chief Executive Officer
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Title: Chief Operating Officer
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Date: 12/22/2023
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Date: 12/22/2023
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EXHIBIT A
EXECUTION AGENT SERVICES
1. PURCHASES AND SALES OF DIGITAL ASSETS
1.1. In accordance with the receipt of Proper Instructions,
Galaxy agrees to use its reasonable efforts to buy the Digital Assets (as applicable for the relevant Digital Asset ETF) or sell the Digital Assets (as applicable for the relevant Digital Asset ETF) in exchange for cash in the form of United States
Dollars (“USD Cash”) in accordance with a Proper Instruction, and seek to buy or sell the Digital Asset at the same or similar price for such Digital Asset as valued by the Digital Asset ETF’s stated valuation
methodology (the “Reference Price”).
1.2. Notwithstanding Section 1.1 of this Exhibit A, if a
Proper Instruction specifies a specific price, or a maximum or minimum price, to buy or sell relevant Digital Assets, Galaxy shall only buy or sell (as applicable) Digital Assets at a price that complies with that Proper Instruction.
1.3. Galaxy understands and agrees that it
may receive Proper Instructions for transacting in Digital Assets for the purpose of (i) purchasing Digital Assets with the USD Cash proceeds of a creation order received by a Digital Asset ETF; (ii) generating USD Cash to enable a Digital Asset ETF
to satisfy a USD Cash redemption order received by a Digital Asset ETF; (iii) generating USD Cash to enable Invesco to pay applicable fees and expenses of the relevant Digital Asset ETF; (iv) to enable the Digital Asset ETF to redeem shares for USD
Cash as necessary in response to a hard fork or other protocol event; and/or (v) in any other circumstances where the Digital Asset ETF is permitted or is required to purchase or sell Digital Assets in accordance with the Digital Assets ETF’s
prospectus, offering documents, or other
controlling documents (the “Controlling Documents”).
1.4. Subject to any specifications within the Proper
Instructions, Galaxy shall select a method, counterparty and venue (if any) for the execution of each transaction in its discretion but in all cases it shall use reasonable efforts to achieve “best execution” for such transaction, where “best
execution” means taking reasonable steps to obtain the best overall result reasonably possible for the Digital Asset ETF taking into account price, costs, speed, likelihood of execution and settlement, size, nature or any other consideration relevant
to the execution of the relevant transaction, giving priority to obtaining a price that is the same or similar to the Reference Price. Galaxy shall not transmit any orders received
pursuant to a Proper Instruction to any other person or to any other intermediary for execution, except for the avoidance of doubt, as a counterparty to the transaction.
1.5. Galaxy shall designate, validate and maintain the
applicable Digital Asset wallets in accordance with any Proper Instructions received from Invesco. Galaxy shall cooperate with the applicable Digital Asset ETF administrator(s) and custodian(s) as necessary and in accordance with agreed upon
procedures and the Controlling Documents.
1.6. Galaxy will direct the proceeds of all purchases and sales
to the applicable Digital Asset ETF wallet or account, as designated by Invesco, or as otherwise directed by Invesco by way of Proper Instruction, promptly upon settlement of the relevant transaction.
1.7. Galaxy shall, in
a manner consistent with its duty of best execution, ensure that Digital Asset or USD Cash proceeds (as applicable) of a transaction are confirmed in the applicable Digital Asset ETF wallet or account by no later than any deadline as instructed by
Invesco by way of Proper Instruction.
1.8. Proper Instructions may be cancelled
by Invesco only if Galaxy has not acted upon those instructions and subject in all cases to Section 2.2.4 of the Agreement.
1.9. Galaxy shall confirm to Invesco as soon as practicable,
and in any event within one business day of completion of the transaction, that it has purchased or sold the relevant Digital Assets. Such confirmations shall be in writing and shall detail: (i) the time of execution; (ii) the price at which the
relevant Digital Asset was purchased or sold; (iii) the volume of the relevant Digital Asset that was purchased or sold; and (iv) the venue on which, or the counterparty to the transaction in which (as the case may be), the relevant Digital Asset was
purchased or sold.
| 2. |
DUTY OF CARE
|
2.1. In addition to the duty of care provisions contained in
the Agreement, Galaxy is expressly prohibited from using any information that it has gained about any Digital Asset ETF’s trading activities in a Digital Asset pursuant to Proper Instructions to inform (in whole or in part) any decision to purchase
or sell Digital Assets that it makes either for its own account or on behalf of any other person. Except as contemplated by Section 2.2 below, Galaxy shall not execute any purchases or sales in the relevant Digital Assets for its own account until it
has concluded the execution of all outstanding purchases and sales on behalf of the applicable Digital Asset ETF.
2.2. Galaxy shall not aggregate any purchases or sales of
Digital Assets it makes on behalf of a Digital Asset ETF with any purchases or sales of Digital Assets it makes either for its own account or on behalf of any other person unless it does so in a manner that is not reasonably expected to operate to
the disadvantage of the Digital Asset ETF. Without limiting the other provisions of this Exhibit A, Invesco acknowledges that Galaxy executes transactions in Digital Assets for other clients and that it seeks to allocate opportunities to purchase and
sell Digital Assets among its clients, including a Digital Asset ETF, fairly and equitably over time, but that no assurances can be given that any specific opportunity will be allocated to a Digital Asset ETF.
2.3. Notwithstanding any provision of the Agreement or this
Exhibit A thereto, Invesco reserves the right to, in its sole discretion, perform (or have its Affiliate perform) any of the Execution Agent Services described herein (and Galaxy agrees to cease performing any such Execution Agent Services upon
notice from Invesco) for any Digital Asset ETF.
Exhibit 10.10
LUKKA OFFERINGS MASTER SERVICES AGREEMENT
This Lukka Offerings Master Services Agreement (this “Agreement”), is made and entered into as of February 1, 2022 (the “Effective Date”) by and between Lukka, Inc. (“Lukka”) and Invesco Ltd. (“Customer”). In
consideration of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
1.1. Lukka Offerings; Scope. Lukka will provide Customer with the services (the “Services”) and proprietary data products (the “Licensed Data” and together with the Services, the “Lukka Offerings”), in each
case, as are indicated and described in each Subscription Agreement agreed upon by the parties in writing (each, a “Subscription Agreement”) for the period of time set forth in such Subscription Agreement (the “Subscription Period”), and subject
to the terms and conditions set forth in this Agreement. Each Subscription Agreement will incorporate and be governed by the terms and conditions of this Agreement. To the extent that any of the provisions of this Agreement conflict with, or are
inconsistent with, any of the provisions of any Subscription Agreement, the provisions of such Subscription Agreement will take precedence, unless specifically set forth to the contrary in such Subscription Agreement.
1.2. License. In connection with the foregoing, Lukka grants to Customer a limited, non-transferable, non-exclusive, non- sublicensable revocable right, during the Subscription Period, to access and use the
Lukka Offerings. Customer, together with its employees, consultants, agents and advisors (collectively, “Authorized Persons”), will be the only party permitted to use the Lukka Offerings hereunder and such usage will be solely in the ordinary
course of Customer’s business. For purposes of this Agreement, any acts or omissions by an Authorized Person shall be considered that of Customer, and the term “Customer” shall include all Authorized Persons.
1.3. Modifications to the Lukka Offerings. Customer acknowledges that (i) the scope of the Lukka Offerings in any Subscription Agreement includes only those of Lukka’s product and service offerings
described in such Subscription Agreement; and (ii) Lukka may thereafter, in its sole and absolute discretion, periodically upgrade, improve or otherwise modify the Lukka Offerings. In addition, notwithstanding anything contained herein, Customer
acknowledges and agrees that Lukka may, in its sole discretion, from time to time discontinue disseminating or otherwise change, replace or eliminate any portion of the data included within the Lukka Offerings, provided any such modification does
not materially reduce the value or the intended purpose of Customer’s subscription.
2. Restrictions. Except as expressly authorized by this Agreement, Customer may not (and may not attempt to): (a) use the Lukka Offerings for any illegal or unauthorized purpose or engage in, encourage or
promote any illegal activity, or any activity that violates this Agreement; (b) modify or adapt the Lukka Offerings; (c) infringe upon or violate the rights of Lukka pursuant to this Agreement; (d) license, sublicense, resell, distribute, lease,
rent, lend, transfer, assign or otherwise dispose of the Lukka Offerings (or any components thereof); (e) use the Lukka Offerings to transmit, send, upload, create, store or otherwise publish any material that contains viruses, software routines
or other harmful code, files or data designed to permit unauthorized access, to disable, erase or otherwise harm software, hardware or data, or to perform any other harmful actions; (f) copy, frame or mirror any part or content of the Lukka
Offerings; (g) access the Lukka Offerings in order to build a competitive product or service; (h) interfere with or disrupt the integrity or performance of the Lukka Offerings; (i) attempt to gain unauthorized access to the Lukka Offerings or
their related systems or networks; (j) attempt to use or access another user’s account without authorization or create a user account under false or fraudulent pretenses; or (k) use the Lukka Offerings to engage in any activities that may
interfere with the ability of others to access or use the Lukka Offerings.
3. Data Rights.
3.1. Customer Data. All content, data or other materials provided, directly or indirectly, by Customer to Lukka (collectively, “Customer Data”) shall remain the sole
property of the Customer. Customer hereby grants Lukka a non-exclusive, royalty-free license and right to host, use, process, display, reproduce, modify, transmit and store any Customer Data solely to the extent necessary to provide the Lukka
Offerings to Customer. Customer has sole responsibility for the accuracy, quality, integrity, legality, reliability, and appropriateness of Customer Data, and for obtaining all rights related to Customer Data required by Lukka in order to provide
the Lukka Offerings hereunder.
3.2. Service Data. Customer acknowledges and agrees that Lukka may collect and store any derived data resulting from Customer’s use of the Lukka Offerings (excluding Customer Data) hereunder (collectively,
“Service Data”). Lukka may aggregate such Service Data with similar data obtained from other Lukka customers and Lukka may use such aggregated and anonymized data in order to improve the Lukka Offerings.
All such Service Data shall be solely owned by Lukka.
3.3. Third-Party Data. Lukka may make available or otherwise integrate or interoperate certain third-party information with the Lukka Offerings (“Third-Party Data”),
which such Third Party Data is governed by its own terms and conditions outside the scope of this Agreement. To the extent permitted by law, Lukka disclaims all liabilities (including direct, indirect, incidental, punitive or consequential
damages) with respect to the performance or non-performance of such Third-Party Data, including, without limitation, any inaccuracy, incompleteness, failure, delay or outage of such Third-Party Data. Lukka has no obligation to monitor such
Third-Party Data and does not control or endorse the information found in such Third-Party Data. EXCEPT AS EXPRESSLY WARRANTED IN THIS AGREEMENT, ALL SUCH THIRD-PARTY DATA IS PROVIDED “AS IS” AND LUKKA HEREBY DISCLAIMS ALL REPRESENTATIONS,
WARRANTIES AND OTHER TERMS AND CONDITIONS WITH REGARD TO SUCH THIRD-PARTY DATA, WHETHER EXPRESS, IMPLIED OR STATUTORY, INCLUDING ALL WARRANTIES AND CONDITIONS OF SATISFACTORY QUALITY, MECHANTIBILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE AND
NON-INFRINGEMENT.
4. Ownership and Reservation of Rights.
4.1. Lukka Offerings. Customer acknowledges and agrees that Lukka has exclusive and valuable property rights in and to the Lukka Offerings, that such Lukka Offerings constitutes valuable confidential
information, trade secrets and/or proprietary rights of Lukka, not within the public domain, that such Lukka Offerings shall remain valuable confidential information, trade secrets and/or proprietary rights of Lukka and that, but for this
Agreement and the Subscription Agreements attached hereto, Customer would have no rights or access to such Lukka Offerings. Without limiting the generality of the foregoing, Lukka does not grant to Customer any ownership rights in or to the Lukka
Offerings, the related names and trademarks or associated components, including, without limitation, the content and proprietary systems used by Lukka in connection with the Lukka Offerings.
4.2. Customer. Notwithstanding any terms to the contrary in this Agreement, as between the parties, Customer owns all right, title and interest in and to the Customer Data and any and all Intellectual
Property Rights (as defined below) embodied in the foregoing.
4.3. Reservation of Rights. Each party reserves all rights not expressly granted in this Agreement, and no licenses are granted by a party to the other party under this Agreement, whether by implication,
estoppel or otherwise, except as expressly set forth in this Agreement. For the purpose of this Agreement, “Intellectual Property Rights” means all patents, copyrights, moral rights, trademarks, trade
secrets and any other form of intellectual property rights recognized in any jurisdiction, including applications and registrations for any of the foregoing.
5. Fees and Payment Terms.
5.1. Fees. The fees for the Lukka Offerings are based on the applicable Subscription Period and are set forth in the applicable Subscription Agreement (“Subscription Fees”).
Unless otherwise expressly specified in such Subscription Agreement, Customer will pay the Subscription Fees, in advance, prior to the commencement of each Subscription Period. Lukka agrees to submit an invoice to Customer for the Subscription
Fees, and Customer will pay all invoiced amounts within 30 days of the date of each such invoice in U.S. Dollars by check, by ACH from a customer-owned ACH payment platform or by wire transfer of immediately available funds to an account
designated in writing by Lukka. Lukka may, notwithstanding any terms to the contrary in this Agreement, modify or increase the Subscription Fees, at its sole discretion. In the event that Lukka elects to modify the Subscription Fees, Lukka will
provide 120 days’ advance written notice to Customer, and such change will not become effective until the next Subscription Period.
5.2. Taxes and Additional Terms. Customer will be responsible for, and will pay all sales and similar taxes, all license fees and similar fees levied upon the provision of the Lukka Offerings provided under
this Agreement excluding only taxes based solely on Lukka’s net income or status as an employer. In the event that Customer fails
to meet its obligations pursuant to Section 5.1, Lukka may, at its option, take all or some of the following courses of action: (i) subject such unpaid amount to an interest charge equal to the lesser of one and
one-half (11/2%) percent of the unpaid balance per month or the maximum rate allowed under applicable state law and/or (ii) immediately suspend the Lukka Offerings, in each case, until Customer has paid all amounts due and payable pursuant to
this Agreement.
5.3. Continued Use After Expiration. In the event that Lukka, with the agreement of Customer, provides any Lukka Offerings to Customer after the expiration of the term of the Subscription Agreement covering
such Lukka Offerings and the parties do not enter into a new Subscription Agreement governing such Lukka Offerings, the fees set out in the expired Subscription Agreement (and all other relevant terms and conditions of the expired Subscription
Agreement) shall remain in effect and Customer shall be responsible for paying Lukka all such fees, provided that Lukka shall have the right to modify the fees upon advance written notice to Customer.
6. Representations and Warranties.
6.1. Mutual Representations. Each party represents and warrants to the other party that (a) it is validly existing and in good standing under the laws of the place of its incorporation or formation, (b) it
has full power and authority to execute, deliver and perform its obligations under this Agreement and any Subscription Agreement executed hereunder, (c) the person signing this Agreement and any Subscription Agreement executed hereunder on its
behalf has been duly authorized and empowered to enter into such agreement; (d) this Agreement and any Subscription Agreement executed hereunder is valid, binding and enforceable against it in accordance with its terms; and (e) neither the
execution of this Agreement or any Subscription Agreement executed hereunder nor the performance of its obligations hereunder or thereunder will conflict with or result in a breach of, or constitute a default under, any provision of the articles
of incorporation, business license, by-laws or articles of association (or other such charter documents) of such party, or any contract or agreement to which it is a party or is subject.
6.2. Lukka Representations. Lukka represents and warrants to the Customer that the Lukka Offerings as provided by Lukka (i) do not infringe upon the Intellectual Property Rights of any third party and (ii)
will comply with all applicable laws and regulations.
6.3. Customer Representations. Customer represents and warrants to Lukka that (i) it has all requisite rights to use the Customer Data with the Lukka Offerings as contemplated by this Agreement, (ii) none
of the Customer Data infringes, violates or misappropriates any Intellectual Property Rights, rights of privacy, rights of publicity or any other rights of any third party, (iii) the Customer Data does not contain any material or information that
is illegal, libelous or slanderous, and (iv) its use of the Lukka Offerings will comply with all applicable laws and regulations.
7. Covenants and Acknowledgements Regarding Use of the Lukka Offerings. Customer hereby covenants and agrees that Customer shall adopt, implement and maintain adequate internal control procedures regarding
the use of the Lukka Offerings reasonably designed to ensure that Customer’s use of the Lukka Offerings complies with this Agreement. Further, Customer acknowledges and agrees that Lukka does not handle, advise or otherwise manage Customer’s (or
other customer) tax services and in no event do the Lukka Offerings include, nor is Lukka providing, nor intending to provide, legal, tax, accounting or compliance advice. Any regulatory compliance of Customer is solely the responsibility of
Customer and is subject to the Customer’s own diligence and actions.
8. Non-Solicitation. Customer agrees that during the term of this Agreement and for a period of six (6) months thereafter, Customer will not, directly or indirectly, (x) induce any of the employees or
consultants of Lukka with whom Customer has had contact or who were identified to Customer in connection with this Agreement to leave their employment or engagement with Lukka, as the case may be, or (y) solicit for employment or hire, employ or
otherwise contract for the services of any such employee or consultant of Lukka; provided, that this Section 8 shall not preclude Customer from hiring any employee or consultant of Lukka who responds to a general solicitation through a public
medium (including, but not limited to, through use of an employment agency or recruiting firm) not directly or indirectly targeted at employees or consultants of Lukka. The provisions of this Section 8 shall survive any termination of this
Agreement.
9. Disclaimer. CUSTOMER EXPRESSLY ACKNOWLEDGES THAT EXCEPT AS SET FORTH IN SECTION 6 HEREOF, LUKKA DOES NOT MAKE ANY WARRANTIES, EXPRESS OR IMPLIED, TO CUSTOMER OR
ANY THIRD PARTY WITH RESPECT TO THIS AGREEMENT, THE SUBSCRIPTION AGREEMENTS AND THE LUKKA OFFERINGS, INCLUDING, WITHOUT LIMITATION: (i) ANY WARRANTIES WITH RESPECT TO THE TIMELINESS, SEQUENCE, ACCURACY,
COMPLETENESS, CURRENTNESS, MERCHANTABILITY, QUALITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE LUKKA OFFERINGS OR (ii) ANY WARRANTIES AS TO THE RESULTS TO BE OBTAINED BY CUSTOMER OR ANY THIRD PARTY IN CONNECTION WITH THE USE OF THE LUKKA
OFFERINGS. THE LUKKA OFFERINGS ARE PROVIDED, AND CUSTOMER AGREES THAT THE LUKKA OFFERINGS ARE PROVIDED, ON AN “AS IS,” “AS AVAILABLE” BASIS WITHOUT WARRANTIES OF ANY KIND.
10. Indemnity.
10.1. Mutual Indemnity. Each party (the “Indemnifying Party”) shall indemnify and defend the other party and its and their officers, directors, employees, agents and
licensors and, in the case of Lukka, any affiliates providing software or Lukka Offerings under this Agreement (collectively the “Indemnified Parties”), against all losses, claims, actions, demands, suits,
judgments, losses, expenses, damages and costs, including reasonable attorneys’ fees and settlement expenses (collectively “Losses”) that may arise directly or indirectly from the fraud, gross negligence,
breach of this Agreement or willful misconduct by the Indemnifying Party or its officers, directors, employees or agents. The Indemnifying Party, in defending any such claim, action or proceeding, except with the written consent of the
Indemnified Parties, shall not consent to entry of any judgment or enter into any settlement which (i) does not include, as an unconditional term, the grant by the claimant to the Indemnified Parties of a release of all liabilities in respect to
such claim, action, or proceeding; or (ii) otherwise adversely affects the rights of the Indemnified Parties.
10.2. Lukka Indemnity. Lukka shall indemnify and defend Customer, its affiliates, and its and their officers, directors, employees, agents and licensors (collectively, the “Customer
Indemnified Parties”), against all Losses that may arise directly or indirectly in connection with or related to any third party claim to the extent that such third party claim is based upon a claim that the Lukka Offerings or any
portion thereof infringes or violates such third party’s Intellectual Property Rights, provided, however, that if any third party asserts an infringement claim contemplated in this Section, Lukka may, at its sole discretion, (i) defend against
such claim; (ii) modify the Lukka Offerings, or any portion thereof in a manner that reasonably provide functionality that is substantially similar and fully enables Customer to operate its business as needed to the Lukka Offerings prior to the
infringement claim; (iii) obtain a license from such third party to permit Customer to continue to use the Lukka Offerings; or (iv) terminate this Agreement. Lukka, in defending any such claim, action or proceeding, except with the written
consent of the Customer Indemnified Parties, shall not consent to entry of any judgment or enter into any settlement which (i) does not include, as an unconditional term, the grant by the claimant to the Customer Indemnified Parties of a release
of all liabilities in respect to such claim, action, or proceeding; or (ii) otherwise adversely affects the rights of the Customer Indemnified Parties. Notwithstanding the foregoing, Lukka shall have no obligation under this Section 10.2 for or
with respect to any claims, actions, or demands alleging infringement that arise as a result of any modification or revision made to the Lukka Offerings by Customer or Customer’s use of the Lukka Offerings combined with any items not supplied by
Lukka.
11. Limitation of Liability. TO THE MAXIMUM EXTENT PERMITTED BY LAW, EXCEPT WITH RESPECT TO DAMAGES RESULTING FROM BREACHES OF SECTIONS 4 OR 12 OR EACH PARTY’S INDEMNIFICATION OBLIGATIONS, IN NO EVENT WILL: (A)
EITHER PARTY BE LIABLE TO THE OTHER PARTY OR ANY THIRD PARTY FOR ANY LOSS OF PROFITS, LOSS OF USE, LOSS OF REVENUE, LOSS OF GOODWILL, ANY INTERRUPTION OF BUSINESS OR FOR ANY INDIRECT, SPECIAL, INCIDENTAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL
DAMAGES OF ANY KIND ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, WHETHER IN CONTRACT, TORT, STRICT LIABILITY OR OTHERWISE, EVEN IF SUCH PARTY HAS BEEN ADVISED OR IS OTHERWISE AWARE OF THE POSSIBILITY OF SUCH DAMAGES; AND (B) EITHER
PARTY’S TOTAL LIABILITY ARISING OUT OF OR RELATED TO THIS AGREEMENT EXCEED THE SUBSCRIPTION FEES ACTUALLY PAID BY CUSTOMER WITH RESPECT TO THE APPLICABLE SUBSCRIPTION PERIOD WITHIN WHICH THE DAMAGES AROSE. THIS LIMITATION OF EACH PARTY’S
LIABILITY IS CUMULATIVE, WITH ALL PAYMENTS FOR CLAIMS OR DAMAGES IN CONNECTION WITH THIS AGREEMENT BEING AGGREGATED TO DETERMINE SATISFACTION OF THE LIMIT. THE EXISTENCE OF ONE OR MORE CLAIMS WILL NOT ENLARGE THE LIMIT. THIS SECTION WILL BE GIVEN
FULL EFFECT EVEN IF
ANY REMEDY SPECIFIED IN THIS AGREEMENT IS DEEMED TO HAVE FAILED OF ITS ESSENTIAL PURPOSE. FURTHER, NOTWITHSTANDING ANY TERMS TO THE CONTRARY IN THIS AGREEMENT, LUKKA WILL NOT BE LIABLE FOR ANY BREACH OF ITS SERVERS
OR SYSTEMS, ANY HACKING OR ANY UNAUTHORIZED DISCLOSURE, UNAUTHORIZED USE OR ANY UNAUTHORIZED ACCESS TO ANY INFORMATION OR DATA (INCLUDING, BUT NOT LIMITED TO, CUSTOMER DATA) IN ANY MEDIUM.
12. Confidentiality and Non-Disclosure; Publicity.
12.1. Disclosure Restrictions. Any and all proprietary or confidential information, data, or documents provided by or on behalf of a party (the “Disclosing Party”) to
the other party (the “Receiving Party”), whether disclosed in writing, electronically, orally, by inspection of tangible objects, or otherwise, whether or not authorized (collectively, “Confidential Information”), shall be held in strict confidence by the Receiving Party, and the Receiving Party shall take all steps reasonably necessary to preserve the confidentiality thereof using the same
care it uses to protect its own confidential information of like importance, but not less than reasonable care. Without limiting the generality of the foregoing, Confidential Information of Lukka shall include the Lukka Offerings and the Service
Data and Confidential Information of the Customer shall include the Customer Data. The terms of this Agreement, including any Subscription Agreement executed hereunder, shall also be deemed Confidential Information of both parties hereunder. A
party’s Confidential Information shall not be used or disclosed by the other party for any purpose except as necessary to implement or perform this Agreement. The Receiving Party shall limit its use of and access to the Disclosing Party’s
Confidential Information to only those of its employees, advisors or agents whose responsibilities require such use or access. The Receiving Party shall be liable for any breach of this Agreement by any of its employees, advisors, agents or any
other Person who obtains access to or possession of any of the Disclosing Party’s Confidential Information from or through the Receiving Party. Customer acknowledges and agrees to notify Lukka immediately if Customer has reason to believe that
unauthorized persons have obtained access to the Lukka Offerings, including, without limitation, Customer’s user identification numbers, passwords, etc.
12.2. Return of Information. At the written request of the Disclosing Party, the Receiving Party shall promptly destroy or return at Receiving Party’s sole discretion, all tangible and, to the extent
practicable, intangible material in its possession or control embodying the Disclosing Party’s Confidential Information; provided, that where Receiving Party is required by judicial, legislative, governmental, regulatory or
self-regulatory authority or by internal corporate document retention to maintain materials and documents containing Disclosing Party’s Confidential Information, Receiving Party shall not be required to return or destroy the materials and
documents containing such Confidential Information. Notwithstanding termination of this Agreement, the Receiving Party shall continue to be bound by the provisions of this Section 12 so long as such party maintains such Confidential Information.
12.3. Limitations to Confidential Information. For purposes of this Section 12, Confidential Information shall not include information that: (i) at the time of use or disclosure by the Receiving Party is in
the public domain through no fault of, action or failure to act by the Receiving Party; (ii) becomes legally known to the Receiving Party from a third-party source whom the Receiving Party does not know to be subject to any obligation to a
Disclosing Party of confidentiality; (iii) was known by the Receiving Party prior to disclosure of such information by the Disclosing Party to the Receiving Party; or (iv) was independently developed by the Receiving Party without any use of
Confidential Information.
12.4. Restrictions Reasonable. Each party acknowledges that the restrictions in this Section 12 are reasonable and necessary to protect the other’s legitimate business interest. Each party acknowledges that
any breach of any of the provisions of this Section 12 may result in irreparable injury to the other for which money damages may not adequately compensate. If there is a breach, then the injured party shall be entitled, in addition to all other
rights and remedies which it may have at law or in equity, to have a decree to seek specific performance or an injunction issued by any competent court, requiring the breach to be cured or enjoining all persons involved from continuing the
breach.
12.5. Publicity. Neither party shall use the other party’s name, trade name, trademark or logo in connection with any press release or other announcements to the public, the media or the industry,
including, without limitation, referencing the other party by name, tradename, trademark or logo on the party’s website or social media accounts,
without, in each instance, obtaining the prior written approval of such other party.
13. Term and Termination.
13.1. Term. Except as otherwise set forth herein or in any Subscription Agreement, the term of this Agreement shall commence as of the Effective Date and shall continue thereafter in full force and effect
until the termination of Customer’s last outstanding Subscription Agreement. Unless otherwise specified in the Subscription Agreement, after the initial Subscription Period, each Subscription Agreement will then automatically renew for successive
twelve (12) month Subscription Periods until either party provides the other party with a written notice to terminate that Subscription Agreement no less than 90 days prior to the close of the then-current Subscription Period.
13.2. Termination For Cause. Either party may terminate this Agreement for cause, if the other party is in material breach of this Agreement or a Subscription Agreement (including, without limitation,
payment of fees or expenses) and does not remedy or cure such breach (i) within thirty (30) days after its receipt of written notice of such breach or (ii) in the case of any payment default, within five (5) days after receipt of written notice
of the same; provided, however, that the parties agree that a breach by Customer of Section 2 hereof shall not be subject to cure. In addition, Lukka may terminate this Agreement and the license granted hereunder and any Subscription Agreement
entered into herewith, at any time, without prior notice, if Customer has violated any applicable law or regulation in connection with its use of the Lukka Offering in any material way that cannot be cured. Termination of this Agreement for cause
hereunder shall be deemed to automatically terminate all then outstanding Subscription Agreements.
13.3. Effect of Termination. Upon any expiration or termination of this Agreement: (a) all rights and licenses granted to Customer under this Agreement and the Subscription Agreements will immediately
cease, (b) Customer will immediately pay all Subscription Fees then due and payable under any Subscription Agreement; and (c) the parties shall comply with Section 12.2 hereof. Notwithstanding the foregoing, those provisions of this Agreement or
any Subscription Agreement that by their nature are intended to survive termination or expiration of this Agreement or Subscription Agreement shall so survive.
14. General Provisions.
14.1. Entire Agreement and Conflicts. This Agreement, together with each Subscription Agreement attached hereto, sets forth the entire agreement and understanding of the parties relating to the subject
matter hereof, and supersedes all prior or contemporaneous agreements, proposals, negotiations, conversations, discussions and understandings, written or oral, with respect to such subject matter and all past dealing or industry custom.
14.2. Amendments and Waivers. No modification, addition or deletion or waiver of any rights under this Agreement will be binding on a party unless made in a writing clearly understood by the parties to be a
modification or waiver and signed by a duly authorized representative of each party. No failure or delay (in whole or in part) on the part of a party to exercise any right or remedy hereunder will operate as a waiver thereof or effect any other
right or remedy. All rights and remedies hereunder are cumulative and are not exclusive of any other rights or remedies provided hereunder or by law. The waiver of one breach or default or any delay in exercising any rights will not constitute a
waiver of any subsequent breach or default.
14.3. Independent Contractors. Neither party will, for any purpose, be deemed to be an agent, franchisor, franchisee, employee, representative, owner or partner of the other party, and the relationship
between the parties will only be that of independent contractors. Neither party will have any right or authority to assume or create any obligations or to make any representations or warranties on behalf of any other party, whether express or
implied, or to bind the other party in any respect whatsoever.
14.4. Governing Law. This Agreement and the Subscription Agreements will be governed by and construed in accordance with the laws of the State of New York applicable to agreements made and to be entirely
performed within the State of New York, without resort to its conflict of law provisions.
14.5. Severability. If any provision of this Agreement or any Subscription Agreement is invalid, illegal or incapable
of being enforced by any rule of law or public policy, all other provisions of this Agreement or such Subscription Agreement will nonetheless remain in full force and effect so long as the economic and legal
substance of the transactions contemplated by this Agreement or such Subscription Agreement is not affected in any manner adverse to any party. Upon such determination that any provision is invalid, illegal or incapable of being enforced, the
parties will negotiate in good faith to modify this Agreement or such Subscription Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby
are fulfilled.
14.6. Counterparts. This Agreement and the Subscription Agreements may be executed: (a) in two or more counterparts, each of which will be deemed an original and all of which will together constitute the
same instrument; and (b) by the parties by exchange of signature pages by mail or email (if email, signatures in Adobe PDF or similar format).
14.7. Force Majeure. Except for payments due under this Agreement, including, under any Subscription Agreement, neither party will be responsible for any failure to perform or delay attributable in whole or
in part to any cause beyond its reasonable control, including but not limited to acts of God (fire, storm, floods, earthquakes, etc.), civil disturbances, disruption of telecommunications, disruption of power or other essential services,
interruption or termination of service by any service providers being used by Lukka to link its servers to the Internet, labor disturbances, vandalism, cable cut, or any malicious or unlawful acts of any third party.
14.8. Notice. All notices, consents and other communications under or regarding this Agreement and any Subscription Agreement shall be in writing and shall be deemed to have been received on the earlier of
the date of actual receipt, the third business day after being mailed by first class certified air mail, or the first business day after being sent by a reputable overnight delivery service. Any notice may be given by facsimile or email. Each
party’s address for notices is set forth on the signature pages hereto. Either party may change its address for notices by giving written notice of the new address to the other party in accordance with this Section.
14.9. Assignment. This Agreement, including any Subscription Agreement attached hereto, shall bind, benefit and be enforceable by and against Lukka and Customer and, to extent permitted hereby, their
respective successors and assigns. Neither party shall assign this Agreement, the Subscription Agreements or any of its rights hereunder or thereunder, nor delegate any of its obligations hereunder or thereunder, without the other party’s prior
written consent. Any change of control of a party, and any assignment by merger or otherwise by operation of law, shall not constitute an assignment of this Agreement or the Subscription Agreements by a party for purposes of the consent required
by this Section.
14.10. Jurisdiction and Process. Any controversy, claim or dispute arising out of or relating to this Agreement, including any Subscription Agreement attached hereto, or the breach thereof shall be settled
solely and exclusively by binding arbitration in New York, New York administered by JAMS. Such arbitration shall be conducted in accordance with the then prevailing JAMS Streamlined Arbitration Rules & Procedures, with the following
exceptions to such rules if in conflict: (a) one arbitrator shall be chosen by JAMS; (b) each party to the arbitration will pay an equal share of the expenses and fees of the arbitrator, together with other expenses of the arbitration incurred or
approved by the arbitrator; and (c) arbitration may proceed in the absence of any party if written notice (pursuant to the JAMS’ rules and regulations) of the proceedings has been given to such party. Each party shall bear its own attorneys’ fees
and expenses. The parties agree to abide by all decisions and awards rendered in such proceedings. Such decisions and awards rendered by the arbitrator shall be final and conclusive. All such controversies, claims or disputes shall be settled in
this manner in lieu of any action at law or equity. IF FOR ANY REASON THIS ARBITRATION CLAUSE BECOMES NOT APPLICABLE THEN EACH PARTY, (i) TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY AS
TO ANY ISSUE RELATING HERETO IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER MATTER INVOLVING THE PARTIES, AND (ii) SUBMITS TO THE EXCLUSIVE JURISDICTION AND VENUE OF THE FEDERAL OR STATE
COURTS LOCATED IN NEW YORK COUNTY, NEW YORK AND EACH PARTY AGREES NOT TO INSTITUTE ANY SUCH ACTION OR PROCEEDING IN ANY OTHER COURT IN ANY OTHER JURISDICTION. Each party irrevocably and unconditionally waives any objection that it may now or
hereafter have to the laying of venue of any action or proceeding arising out of or relating to this Agreement, including any Subscription Agreement attached hereto, in the courts referred to in this Section.
[Signature Page Follows]
In Witness Whereof, the parties authorized representatives have executed this Lukka Offerings Master Services Agreement as of the Effective Date set forth above.
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CUSTOMER
Signature: /s/ Mark D. Jensen
By: Mark D. Jensen
Title: Director, Global Procurement
Date: 02/04/2022
Address: 1555 Peachtree Street, NE
Atlanta, GA 30309
Email: global.procurement@invesco.com
Billing Contact: Invesco AP
Billing Email: NL-APP-MVQNPO@invesco.com
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LUKKA, INC.
Signature: /s/ Robert Materazzi
By: Robert Materazzi
Title: Chief Executive Officer
Date: 02/04/2022
Address: 130 5th Avenue, 5th Floor
New York, NY 10017
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Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the use in this Registration Statement on Form S-1 of Invesco Galaxy Solana ETF of our report dated October 31, 2025,
relating to the financial statement of Invesco Galaxy Solana ETF, which appears in this Registration Statement. We also consent to the reference to us under the heading “Experts” in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
Chicago, Illinois
October 31, 2025