Company: GSUI
Filing Date: 2025-12-05
Form Type: S-1
Source: 0001193125-25-309828
Chunk: 96

Company: Grayscale Sui Trust (SUI)
Filing Date: 2025-12-05
Form: S-1
Chunk 96
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 XRP sales that should have been registered under the federal securities laws, but were not. Multiple digital assets the SEC alleged to be securities in the Coinbase, Binance and Kraken Complaints were first sold to the public in similar circumstances or ICOs. Subsequently, in July 2023, the District Court for the Southern District of New York held that while XRP is not a security, certain sales of XRP to certain buyers amounted to “investment contracts” under theHoweytest. For a discussion of the evolution of the SEC’s complaint against Ripple Labs, see “Risk Factors—Risk Factors Related to the Regulation of Digital Assets, the Trust and the Shares—The SEC has previously taken the view that SUI is a “security,” and a final determination that SUI or any other digital asset is a “security” may adversely affect the value of SUI and the value of the Shares, and result in potentially extraordinary, nonrecurring expenses to, or termination of, the Trust.”

If SUI is determined to be a “security” or transactions in SUI are determined to be securities transactions under federal or state securities laws by the SEC or a state regulatory agency, or in a proceeding in a court of law or otherwise, it will have material adverse consequences for SUI and an investment in the Shares. If SUI or transactions in SUI are determined to be a security or a securities transaction, it is likely to become difficult or impossible for SUI to be traded, cleared or custodied in the United States through the same channels used by non-security digital assets, which could in turn materially and adversely affect the trading value, liquidity, market participants’ ability to convert SUI into U.S. dollars and general acceptance of SUI and cause users to migrate to other digital assets. As such, any determination that SUI or transactions in that digital asset are a security under federal or state securities laws may adversely affect the value of SUI and, as a result, an investment in the Shares.

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Changes in SEC policy could adversely impact the value of the Shares.

The effect of any future regulatory change on the Trust or the digital assets held by the Trust is impossible to predict, but such change could be substantial and adverse to the Trust and the value of the Shares. If the SEC were to approve any ETF other than ours in the future, such an ETF may be perceived to be a superior investment product offering exposure to digital assets compared to the Trust because the value of the shares issued