Company: HODL
Filing Date: 2025-03-26
Form Type: 10-K
Source: 0000930413-25-000995
Chunk: 236

Company: VanEck Bitcoin ETF
Filing Date: 2025-03-26
Form: 10-K
Item: Item 1A
Chunk 236
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 their behalf by third parties are relatively untested in a bankruptcy of an
entity such as the Bitcoin Custodian and the Additional Bitcoin Custodian 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 Bitcoin Custodian or the Additional Bitcoin Custodian, 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.

Each of the Custody Agreement and the Additional Bitcoin
Custody Agreement contain an agreement by the parties to treat the bitcoin credited to the Trust’s Custody Account (as defined
in the Custody Agreement) and the Trust’s Custodial Account (as defined in the Additional Bitcoin Custody Agreement) as
financial assets under Article 8 of the New York Uniform Commercial Code (“Article 8”), in addition to stating that
the Bitcoin Custodian and the Additional Bitcoin Custodian will serve as fiduciary and custodian on the Trust’s behalf.
It is possible that a court would not treat custodied digital assets as part of the Bitcoin Custodian’s or the Additional
Bitcoin Custodian’s general estate in the event the Bitcoin Custodian or the Additional Bitcoin 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

59

how they would rule in such a scenario. In the case
of the Clearing Account, because it is an omnibus account in which the assets of multiple customers – including the Trust’s
assets – are held together, it is likely the Trust would be treated as a general unsecured creditor in respect of the Clearing
Account held with the Bitcoin Custodian in the event of the Bitcoin Custodian’s insolvency. The Clearing Agreement does
not contain an Article 8 opt-in. If the Bitcoin Custodian or the Additional Bitcoin Custodian became subject to insolvency proceedings
and a court were to rule that the custodied bitcoin were part of the Bitcoin Custodian’s or the Additional Bitcoin Custodian’s
general estate and not the property of the Trust, then the Trust would be treated as a general unsecured creditor in the Bitcoin
Custodian’s or the Additional Bitcoin Custodian’s insolvency proceedings and the Trust could be subject to the loss
of all