Company: GSUI
Filing Date: 2025-12-05
Form Type: S-1
Source: 0001193125-25-309828
Chunk: 119

Company: Grayscale Sui Trust (SUI)
Filing Date: 2025-12-05
Form: S-1
Chunk 119
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 increase in the NAV per Share.

The inability of Authorized Participants and market makers to hedge their SUI exposure may adversely affect the liquidity of Shares and the value of an investment in the Shares.

Authorized Participants and market makers will generally want to hedge their exposure in connection with Basket purchase and redemption orders. To the extent Authorized Participants and market makers are unable to hedge their exposure due to market conditions (e.g., insufficientSUIliquidity in the market, inability to locate an appropriate hedge counterparty, extreme volatility in the price ofSUI, wide spreads between prices quoted on different Digital Asset Trading Platforms, the closing of Digital Asset Trading Platforms due to fraud, failures, security breaches or otherwise etc.), such conditions may make it difficult to purchase or redeem Baskets or cause them to not create or redeem Baskets. In addition, the hedging mechanisms employed by Authorized Participants and market makers to hedge their exposure toSUImay 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 Shares and the spread at which the Shares trade on the open market.

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Arbitrage transactions intended to keep the price of the Shares closely linked to the price of SUI may be problematic if the process for the purchase and redemption of Baskets encounters difficulties, which may adversely affect an investment in the Shares.

If the processes of creation and redemption of Shares (which depend on timely transfers ofSUIto and by the Custodian) encounter any unanticipated difficulties due to, for example, the price volatility ofSUI, the insolvency, business failure or interruption, default, failure to perform, security breach, or other problems affecting the Custodian, the closing of Digital Asset Trading Platforms to fraud, failures, security breaches or otherwise, or network outages or congestion, spikes in transaction fees demanded by validators, or other problems or disruptions affecting the Blockchain, then potential market participants, such as the Authorized Participants and their customers, 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 underlyingSUImay not take the risk that, as a result of those difficulties, they may not be able to realize the profit they expect.

Alternatively, in the case of a network outage or other problems affecting the Sui Network, the processing of transactions on the Sui Network may be disrupted, which in turn may prevent Liquidity Providers from depositing or