Company: GSUI
Filing Date: 2025-12-05
Form Type: S-1
Source: 0001193125-25-309828
Chunk: 87

Company: Grayscale Sui Trust (SUI)
Filing Date: 2025-12-05
Form: S-1
Chunk 87
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 the terms “investment contract” and “note,” and the SEC has typically analyzed whether a particular digital asset is a security or the offer and sale of a digital asset is a securities transaction by reference to whether it meets the tests developed by the federal courts interpreting these terms, known as theHoweyandRevestests, respectively. For many digital assets, whether or not theHoweyorRevestests are met is difficult to resolve definitively, and substantial legal arguments can often be made both in favor of and against a particular digital asset qualifying as a security or a particular offer and sale of a digital asset qualifying as a securities transaction under one or both of theHoweyandRevestests. Adding to the complexity, the SEC staff has indicated that the security status of a particular digital asset can change over time as the relevant facts evolve, though recent arguments advanced in ongoing litigation may suggest that the SEC no longer believes the status of a digital asset can change over time.

As part of determining whether SUI is a security or a transaction in SUI by the Sponsor is a securities transaction, for purposes of the federal securities laws, the Sponsor takes into account a number of factors, including the various definitions of “security” under the federal securities laws and federal court decisions interpreting elements of these definitions, such as the U.S. Supreme Court’s decisions in theHoweyandRevescases and their progeny, as well as reports, orders, press releases, public statements and speeches by the SEC, its commissioners and its staff providing guidance on when a digital asset may be a security or when an offer and sale of a digital asset may be a securities transaction for purposes of the federal securities laws. Finally, the Sponsor discusses the security status of SUI and the Sponsor’s transactions in SUI with external counsel, and has received a memorandum regarding the status of SUI under the federal securities laws from external counsel. Through this process the Sponsor believes that it is applying the proper legal standards in determining that SUI is not a security in light of the uncertainties inherent in theHoweyandRevestests. However, such policies and procedures are risk-based judgments made by the Sponsor and not a legal standard or determination binding on any regulatory body or court. The Sponsor has been contacted by staff from the SEC’s Division of Enforcement with respect to securities law compliance matters involving SUI and has responded to the SEC staff. The Sponsor subsequently received a termination notice from the SEC staff with respect to this inquiry.

In light of the uncertainties and the fact-based nature of the analysis