Company: GSUI
Filing Date: 2025-12-05
Form Type: S-1
Source: 0001193125-25-309828
Chunk: 108

Company: Grayscale Sui Trust (SUI)
Filing Date: 2025-12-05
Form: S-1
Chunk 108
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 Corporation membership.

The Sui Network may impose penalties (i.e., “slashing”) if a validator commits malicious acts related to the validation of transactions. Currently on the Sui Network, slashing generally operates theoretically possible by social consensus, rather than being automatically applied by the protocol’s code. If two-thirds of validators determine that a validator should be slashed for low operational performance, malicious behavior, or poor community membership, that validator's rewards will be slashed. Slashing on the Sui Network does not slash a validator's staked SUI.

There can be no guarantee that slashing penalties and resulting lost opportunity to receive staking rewards will not occur as a result of the activities of a Staking Provider. Furthermore, a Staking Provider’s liability to the Trust is expected to be limited, and a Staking Provider may lack the assets or insurance in order to support the restitution for of any lost opportunity to receive staking rewards. While the Staking Arrangements may provide for indemnification up to a specified cap, slashing insurance or other

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reimbursement programs, there can be no guarantee that the Trust would recover any lost opportunity to receive staking rewards, if it is subject to penalties imposed by the Sui Network.

Staked SUI tokens will be inaccessible for a variable period of time, determined by a range of factors, which could result in certain liquidity risk to the Trust.

Under current Sui Network protocols, staked SUI tokens are permitted to be un-staked by the holder of the private keys for the withdrawal address of such SUI tokens. However, as part of the “activating” and “de-activating” or “cooling down” processes of staking. “Activation” is the funding of a validator to be included in the active set, thereby allowing the validator to participate in the Sui Network’s proof-of-stake consensus protocol. “De-activating” is the request to exit from the active set and no longer participate in the Sui Network’s proof-of-stake consensus protocol. As part of these “activating” and “de-activating” processes of staking on the Sui Network, any staked SUI will be inaccessible for a period of time, denominated in “epochs.” On the Sui Network, epochs are targeted to last approximately 24 hours, though actual epoch durations may vary slightly due to validator coordination and other timing effects inherent in the network’s consensus protocol. De-activation typically completes when the current