SEC Filing Document

Company: VanEck BNB ETF
Ticker: 
CIK: 2066824
Filing Type: S-1
Document Type: S-1
Date Filed: 2025-05-05
Accession Number: 0002066824-25-000002
Exchange: 
SIC Code: 6221
SIC Description: Commodity Contracts Brokers & Dealers
URL: https://www.sec.gov/Archives/edgar/data/2066824/000206682425000002/vaneckbnbetfs-1.htm

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"off-blockchain transactions" involve the transfer of control over, or ownership of, a specific digital wallet holding BNB or the reallocation of ownership of certain BNB in a pooled-ownership digital wallet, such as a digital wallet owned by a Digital Asset Trading Platform. In contrast to on-blockchain transactions, which are publicly recorded on the BNB Chain, information and data regarding off-blockchain transactions are generally not publicly available. Therefore, off-blockchain transactions are not truly BNB transactions in that they do not involve the transfer of transaction data on the BNB Chain and do not reflect a movement of BNB between addresses recorded in the BNB Chain. For these reasons, off- blockchain transactions are subject to risks as any such transfer of BNB ownership is not protected by the protocol behind the BNB Chain or recorded in, and validated through, the blockchain mechanism. Creation of New BNB Initial Creation of BNB Proof-of-Stake Process

Unlike proof-of-work, in which validators expend computational resources to compete to validate transactions and are rewarded coins in proportion to the amount of computational resources expended, in proof-of-stake,

validators risk or "stake" coins to compete to be randomly selected to validate transactions and are rewarded coins in proportion to the amount of coins staked. Any malicious activity, such as validating multiple blocks, disagreeing with the eventual consensus or otherwise violating protocol rules, results in the forfeiture or "slashing" of a portion of the staked coins. Proof-of-stake is believed by some to be more energy efficient and scalable than proof-of-work. Every [ ] seconds, approximately, a new block is added to the BNB Chain with the latest transactions processed by the network, and the validator that generated this block is awarded BNB.

Limits on BNB Supply

BNB Market and BNB Exchanges

BNB can be transferred in direct peer-to-peer transactions through the direct sending of BNB over the BNB Chain from one BNB address to another. Among end-users, BNB can be used to pay other members of the BNB Chain for goods and services under what resembles a barter system. Consumers can also pay merchants and other commercial businesses for goods or services through direct peer-to-peer transactions on the BNB Chain or through third-party service providers.

In addition to using BNB to engage in transactions, investors may purchase and sell BNB to speculate as to the value of BNB in the BNB market, or as a long-term investment to diversify their portfolio. The value of BNB within the market is determined, in part, by the supply of and demand for BNB in the global BNB market, market expectations for the adoption of BNB as a store of value, the number of merchants that accept BNB as a form of payment, and the volume of peer-to-peer transactions, among other factors.

BNB spot markets provide investors with a website that permits investors to open accounts with the spot market and then purchase and sell BNB. Prices for trades on BNB spot markets are typically reported publicly. An investor opening a trading account must deposit an accepted government-issued currency into their account with the spot market, or a previously acquired digital asset, before they can purchase or sell assets on the spot market. The process of establishing an account with a BNB spot market and trading BNB is different from, and should not be confused with, the process of users sending BNB from one BNB address to another BNB address on the BNB Chain. This latter process is an activity that occurs on the BNB Chain, while the former is an activity that occurs entirely on the private website operated by the spot market. The spot market typically records the investor's ownership of BNB in its internal books and records, rather than on the BNB Chain. The spot market ordinarily does not transfer BNB to the investor on the BNB Chain unless the investor makes a request to the spot market exchange to withdraw the BNB in their exchange account to an off-exchange BNB wallet.

Outside of spot markets, BNB can be traded OTC in transactions that are not publicly reported. The OTC market is largely institutional in nature, and OTC market participants generally consist of institutional entities, such as firms that offer two-sided liquidity for BNB, investment managers, proprietary trading firms, high-net-worth individuals that trade BNB on a proprietary basis, entities with sizeable BNB holdings, and family offices. The OTC market provides a relatively flexible market in terms of quotes, price, quantity, and other factors, although it tends to involve large blocks of BNB. The OTC market has no formal structure and no open-outcry meeting place. Parties engaging in OTC transactions will agree upon a price—often via phone or email—and then one of the two parties will then initiate the transaction. For example, a seller of BNB could initiate the transaction by sending the BNB to the buyer's BNB address. The buyer would then wire U.S. dollars to the seller's bank account. OTC trades are sometimes hedged and eventually settled with concomitant trades on BNB spot markets.

Authorized Participants will deliver, or facilitate the delivery of, BNB or cash to the Trust's account with the BNB Custodian in exchange for Shares of the Trust, and the Trust, through the BNB Custodian, will deliver BNB or cash when such Authorized Participants redeem Shares of the Trust. Based on the CCData [ ], MarketVector selects the top five exchanges by rank for inclusion in the MarketVectorTM [ ], which the Trust will then use to price its NAV at the end of every business day. See "The Trust and BNB Prices— Description of the MarketVectorTM [ ] Construction and Maintenance" for more information.

Regulation of BNB Chain and Government Oversight

As digital assets have grown in both popularity and market size, the U.S. Congress and a number of U.S. federal and state agencies (including FinCEN, SEC, CFTC, FINRA, the Consumer Financial Protection Bureau ("CFPB"), the Department of Justice, the Department of Homeland Security, the Federal Bureau of Investigation, the IRS, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Federal Reserve and state financial institution and securities regulators) have been examining the operations of digital asset networks, digital asset users and the digital asset exchange markets, with particular focus on the extent to which digital assets can be used to launder the proceeds of illegal activities or fund criminal or terrorist enterprises and the safety and soundness of exchanges or other service-providers that hold or custody digital assets for users. Many of these state and federal agencies have issued consumer advisories regarding the risks posed by digital assets to investors. In addition, federal and state agencies, and other countries have issued rules or guidance about the treatment of digital asset transactions or requirements for businesses engaged in digital asset activity. Federal and state agencies, and other countries and international bodies have issued rules or guidance about the treatment of digital asset transactions or requirements for businesses engaged in digital asset activity. Moreover, the failure of FTX Trading Ltd. ("FTX") in November 2022 and the resulting market turmoil substantially increased regulatory scrutiny in the United States and globally and led to SEC and criminal investigations, enforcement actions and other regulatory activity across the digital asset ecosystem. In January 2025, President Trump issued the “Strengthening American Leadership in Digital Financial Technology” Executive Order. This executive order outlines the federal government’s policy to support the responsible growth and use of digital assets and related technology. Replacing the digital assets executive order issued by Former President Biden in 2022, the Executive Order promotes the development of dollar-backed stablecoins, fair access to banking services and the access and use for lawful purposes of public blockchain networks. This shift in federal policy with respect to digital assets may lead to further provisions of clarity and the removal of uncertainty related to digital assets.