Company: HBAR
Filing Date: 2025-09-09
Form Type: S-1
Source: 0000950170-25-113803
Chunk: 17

Company: Grayscale Hedera Trust ETF
Filing Date: 2025-09-09
Form: S-1
Chunk 17
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 infrastructure of which is collectively maintained by a decentralized user base. The Hedera Network allows people to exchange tokens of value, called HBAR, which are recorded using distributed ledger technology. HBAR can be used to pay for goods and services, including computational power on the Hedera Network, or it can be converted to fiat currencies, such as the U.S. dollar, at rates determined on Digital Asset Exchanges or in individual end-user-to-end-user transactions under a barter system.

The Hedera Network is a public distributed ledger technology (“DLT”) network that enables people to interact and transact online efficiently and securely without the need for third-party companies. The purpose of the Hedera Network is to provide a stable, trustworthy network for a wide variety of decentralized, enterprise-grade applications. Although the primary purpose of the Hedera Network is not to operate a payments system or store of value, like most public DLT networks, the Hedera Network requires a digital asset to properly operate and incentivize consensus and behavior on the DLT network. HBAR is the native digital asset of the Hedera Network. HBAR is used to power decentralized applications, build peer-to-peer transactional models, and protect the network from malicious actors.

The price of HBAR on public Digital Asset Trading Platforms has a limited history, and during this history, HBAR prices on the Digital Asset Markets more generally, and on Digital Asset Trading Platforms individually, have been volatile and subject to influence by many factors, including operational interruptions. While the Index is designed to limit exposure to the interruption of individual Digital Asset Trading Platforms, the Index Price, and the price of HBAR generally, remain subject to volatility experienced by Digital Asset Trading Platforms, and such volatility could adversely affect the value of the Shares. For example, during the twelve months ended June 30, 2025, the Index Price ranged from $0.04 to $0.38, with the straight average being $0.16. See “Business—Overview of theHedera Industry and Market—Historical HBAR Prices.”

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Several U.S. regulators, including the Financial Crimes Enforcement Network of the U.S. Department of the Treasury (“FinCEN”), the Commodity Futures Trading Commission (“CFTC”), the U.S. Internal Revenue Service (“IRS”), and state regulators, including the New York Department of Financial Services (“NYDFS”), have made official pronouncements or issued guidance or rules regarding the treatment of HBAR and other digital assets. However, other