Company: OSOL
Filing Date: 2025-10-22
Form Type: S-1
Source: 0001493152-25-018952
Chunk: 45

Company: Osprey Solana Trust
Filing Date: 2025-10-22
Form: S-1
Chunk 45
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 Participants and other third-party service providers to perform certain functions essential to managing the affairs of the Trust. [In addition, Liquidity Providers are relied upon to facilitate the purchase and sale of SOL in connection with creations and redemptions of Shares in cash (“Cash Orders”), and] the Transfer Agent and the Sponsor are relied upon to facilitate such Cash Orders. Any disruptions to a service provider’s business operations, resulting from business failures, financial instability, security failures, government mandated regulation or operational problems, could have an adverse impact on the Trust’s ability to access critical services and be disruptive to the operations of the Trust and require the Sponsor or the Sponsor, as the case may be, to replace such service provider. Moreover, the Sponsor could decide to replace a service provider to the Trust, or the Sponsor may decide to replace a Liquidity Provider, for other reasons.

If the Sponsor decides, or is required, to replace Coinbase Custody Trust Company, LLC as the custodian of the Trust’s SOL, U.S. Bank as the cash custodian, or Coinbase Custody Trust Company as the prime broker controlling and securing the Trust’s Settlement Balance, transfer of the respective maintenance responsibilities of the Vault Balance or the Settlement Balance to another party or parties will likely be complex and could subject the Trust’s SOL to the risk of loss during the transfer, which could have a negative impact on the performance of the Shares or result in loss of the Trust’s assets.

Moreover, the legal rights of customers with respect to digital assets held on their behalf by a third-party custodian, such as the Custodial Entities, in insolvency proceedings are currently uncertain. [The Prime Execution Agent Agreement contains an agreement by the parties to treat the digital assets credited to the Trust’s Vault Balance and Settlement Balance as financial assets under Article 8 in addition to stating that the SOL Custodian will serve as fiduciary and custodian on the Trust’s behalf with respect to the Trust’s SOL held in the Vault Balance, and that any SOL credited to the Settlement Balance will be treated as custodial assets.]

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The Custodial Entities’ parent, Coinbase Global, has also stated in its most recent public securities filings that in light of the inclusion of provisions relating to Article 8 in its custody and prime broker client agreements, it believes that a court would not treat custodied digital assets as part of its general estate in the event the Custodial Entities were to experience insolvency. However, due to the novelty of digital asset custodial arrangements courts have not yet considered this type