Company: HBAR
Filing Date: 2025-09-09
Form Type: S-1
Source: 0000950170-25-113803
Chunk: 124

Company: Grayscale Hedera Trust ETF
Filing Date: 2025-09-09
Form: S-1
Chunk 124
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0 (the “Investment Company Act”)). See “—Description of the Trust Agreement— Termination of the Trust” for additional discussion of the circumstances under which the Trust could be dissolved. See “Risk Factors—Risk Factors Related to the Trust and the Shares—A determination that HBAR or any other digital asset is a “security” may adversely affect the value of HBAR and the value of the Shares, and result in potentially extraordinary, nonrecurring expenses to, or termination of, the Trust.”

Characteristics of the Shares

The Shares are intended to offer investors an opportunity to gain exposure to digital assets through an investment in securities. The logistics of accepting, transferring and safekeeping of HBAR are dealt with by the Sponsor and Custodian, and the related expenses are built into the value of the Shares. Therefore, shareholders do not have additional tasks or costs over and above those generally associated with investing in any other security.

The Shares have certain other key characteristics, including the following:

Easily Accessible and Relatively Cost Efficient . Investors in the Shares can also directly access the Digital Asset Markets. The Sponsor believes that investors will be able to more effectively implement strategic and tactical asset allocation strategies that use HBAR by using the Shares instead of directly purchasing and holding HBAR, and for many investors, transaction costs related to the Shares will be lower than those associated with the direct purchase, storage and safekeeping of HBAR.

Market-Traded and Transparent . The Shares are expected to be listed on NASDAQ. The Sponsor believes the listing of the Shares on NASDAQ will provide investors with an efficient means to implement various investment strategies. The Trust will not hold or employ any derivative securities. Furthermore, the value of the Trust’s assets will be reported each day on www. etfs.grayscale.com/hbar.

Minimal Credit Risk . The Shares represent an interest in actual HBAR owned by the Trust. The Trust’s HBAR are not subject to borrowing arrangements with third parties and are subject to counterparty and minimal credit risk with respect to the Custodian. This contrasts with the other financial products such as CoinShares exchange-traded notes, TeraExchange swaps and HBAR futures and options traded on the Chicago Mercantile Exchange and the Intercontinental Exchange through which investors gain exposure to digital assets through the use of derivatives that are subject to counterparty and credit risks.

Safekeeping System . The Custodian has been appointed to control and secure the HBAR for the Trust using offline storage, or cold storage, mechanisms to secure the Trust’s private key