SEC Filing Document

Company: VanEck BNB ETF
Ticker: 
CIK: 2066824
Filing Type: S-1/A
Document Type: S-1/A
Date Filed: 2025-10-30
Accession Number: 0001628280-25-047581
Exchange: 
SIC Code: 6221
SIC Description: Commodity Contracts Brokers & Dealers
URL: https://www.sec.gov/Archives/edgar/data/2066824/000162828025047581/vaneckbnbs-1a1.htm

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the Additional BNB Custody Agreement. With respect to the Excluded Liabilities, the Additional BNB Custodian's liability to the Trust for any losses arising out of or in connection with the Additional BNB Custodian's defense and indemnity obligations under the Additional BNB Custody Agreement will be limited, in the aggregate, to an amount equal to five million U.S. dollars ($5,000,000.00 USD). In general, the Additional BNB Custodian is not liable under the Additional BNB Custody Agreement unless in the event of its negligence, fraud, material violation of applicable law or willful misconduct. The Additional BNB Custodian is not liable for delays, suspension of operations, failure in performance, or interruption of service to the extent it is directly due to a cause or condition beyond the reasonable control of the Additional BNB Custodian. Furthermore, the insurance maintained by the Additional BNB Custodian may be insufficient to cover its liabilities to the Trust.

The Additional BNB Custodian requires up to twenty-four (24) hours between any request to withdraw BNB from the Trust's Additional BNB Account and submission of the Trust's withdrawal to the BNB Chain. It may be necessary to retrieve certain information from offline storage in order to facilitate a withdrawal in accordance with the Trust's instructions, which may delay the initiation or crediting of such withdrawal from the Trust's Additional BNB Account. BNB shall not be deposited or withdrawn upon less than twenty-four (24) hours' notice initiated from the Trust's Additional BNB Account. The time of such request shall be the time such notice is transmitted from the Trust's Additional BNB Account. In the context of the foregoing and during such twenty-four (24) hours' notice period, the Additional BNB Custodian makes no representations or warranties with respect to the availability and/or accessibility of (1) the BNB, (2) a Custody Transaction (as defined in the Additional BNB Custody Agreement, which includes a deposit or withdrawal), (3) the Additional BNB Account, or (4) the Custodial Services (as defined

in the Additional BNB Custody Agreement). While the Additional BNB Custodian will make reasonable efforts to process client initiated deposits in a timely manner, the Additional BNB Custodian makes no representations or warranties regarding the amount of time needed to complete processing of deposits as such processing is dependent upon many factors outside of the Additional BNB Custodian's control.

Moreover, in the event of an insolvency or bankruptcy of the BNB Custodian or the Additional BNB Custodian in the future, given that the contractual protections and legal rights of customers with respect to digital assets held on their behalf by third parties are relatively untested in a bankruptcy of an entity such as the BNB Custodian and the Additional BNB Custodian in the virtual currency industry, there is a risk that customers' assets – including the Trust's assets – may be considered the property of the bankruptcy estate of the BNB Custodian or the Additional BNB Custodian, and customers – including the Trust – may be at risk of being treated as general unsecured creditors of such entities and subject to the risk of total loss or markdowns on value of such assets.

Each of the Custody Agreement and the Additional BNB Custody Agreement contain an agreement by the parties to treat the BNB credited to the Trust's Custody Account (as defined in the Custody Agreement) and the Trust's Custodial Account (as defined in the Additional BNB Custody Agreement) as financial assets under Article 8 of the New York Uniform Commercial Code ("Article 8"), in addition to stating that the BNB Custodian and the Additional BNB Custodian will serve as fiduciary and custodian on the Trust's behalf. It is possible that a court would not treat custodied digital assets as part of the BNB Custodian's or the Additional BNB Custodian's general estate in the event the BNB Custodian or the Additional BNB Custodian were to experience insolvency. However, due to the novelty of digital asset custodial arrangements courts have not yet considered this type of treatment for custodied digital assets and it is not possible to predict with certainty how they would rule in such a scenario. In the case of the Clearing Account, because it is an omnibus account in which the assets of multiple customers – including the Trust's assets – are held together, it is likely the Trust would be treated as a general unsecured creditor in respect of the Clearing Account held with the BNB Custodian in the event of the BNB Custodian's insolvency. The Clearing Agreement does not contain an Article 8 opt-in. If the BNB Custodian or the Additional BNB Custodian became subject to insolvency proceedings and a court were to rule that the custodied BNB were part of the BNB Custodian's or the Additional BNB Custodian's general estate and not the property of the Trust, then the Trust would be treated as a general unsecured creditor in the BNB Custodian's or the Additional BNB Custodian's insolvency proceedings and the Trust could be subject to the loss of all or a significant portion of its assets. Moreover, in the event of the bankruptcy of the BNB Custodian or the Additional BNB Custodian, an automatic stay could go into effect and protracted litigation could be required in order to recover the assets held with the BNB Custodian or the Additional BNB Custodian, all of which could significantly and negatively impact the Trust's operations and the value of the Shares.

Under the Trust Agreement, the Trustee and the Sponsor will not be liable for any liability or expense incurred, including, without limitation, as a result of any loss of BNB by the BNB Custodian, absent gross negligence or bad faith on the part of the Trustee or the Sponsor or breach by the Sponsor of the Trust Agreement, as the case may be. As a result, the recourse of the Trust or the Shareholders to the Trustee or the Sponsor, including in the event of a loss of BNB by the BNB Custodian, is limited.

The Shareholders' recourse against the Sponsor, the Trustee, and the Trust's other service providers for the services they provide to the Trust, including, without limitation, those relating to the holding of BNB or the provision of instructions relating to the movement of BNB, is limited. For the avoidance of doubt, neither the Sponsor, the Trustee, nor any of their affiliates, nor any other party has guaranteed the assets or liabilities, or otherwise assumed the liabilities, of the Trust, or the obligations or liabilities of any service provider to the Trust, including, without limitation, the BNB Custodian or the Additional BNB Custodian. Consequently, a loss may be suffered with respect to the Trust's BNB that is not covered by the BNB Custodian's or the Additional BNB Custodian's insurance and for which no person is liable in damages. As a result, the recourse of the Trust or the Shareholders, under applicable law, is limited.

The Trust May Be Required, Or The Sponsor May Deem It Appropriate, To Terminate And Liquidate At A Time That Is Disadvantageous To Shareholders.

Pursuant to the terms of the Trust Agreement, the Trust is required to dissolve under certain circumstances. In addition, the Sponsor may, in its sole discretion, dissolve the Trust for a number of reasons, including if the Sponsor determines, in its sole discretion, that it is desirable or advisable for any reason to discontinue the affairs of the Trust.

If the Trust is required to terminate and liquidate, or the Sponsor determines in accordance with the terms of the Trust Agreement that it is appropriate to terminate and liquidate the Trust, such termination and liquidation could occur at a time that is disadvantageous to Shareholders, such as when the actual exchange rate of BNB is lower than the Index was at the time when Shareholders purchased their Shares. In such a case, when the Trust's BNB is sold as part of its liquidation, the resulting proceeds distributed to Shareholders will be less than if the actual exchange rate at such time were higher at the time of sale.

The Sponsor Is Solely Responsible For Determining The Value Of The BNB Holdings And BNB Holdings Per Share, And Any Errors, Discontinuance Or Changes In Such Valuation Calculations May Have An Adverse Effect On The Value Of The Shares.