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

Chunk 40 of 98
Word Count: 1463
Character Count: 9011

Document Content:

apply in respect of System Failures or Downtime, which are subject to other respective provisions of the Custody Agreement. The occurrence of an event described in the Force Majeure provision shall not affect the validity and enforceability of any remaining provisions of the Custody Agreement. In the event of potential losses incurred by the Trust as a result of the BNB Custodian losing control of the Trust's BNB or failing to properly execute instructions on behalf of the Trust, the BNB Custodian's liability with respect to the Trust will be subject to certain limitations which may allow it to avoid liability for potential losses or may be insufficient to cover the value of such potential losses. Furthermore, the insurance maintained by the BNB Custodian may be insufficient to cover its liabilities to the Trust. Both the Trust and the BNB Custodian are required to indemnify each other under certain circumstances.

Subject to the Force Majeure provision and as limited by the limitations of liability in the Custody Agreement, the BNB Custodian shall be liable to the Trust for the Loss (defined below) of any of the Trust's BNB or fiat currency to the extent that such Loss was caused by the negligence, fraud, willful or reckless misconduct of the BNB Custodian or breach by the BNB Custodian of its Standard of Care. The Custody Agreement provides that "Loss" means if, at any time the Trust's BNB Account or Fiat Account, as applicable, does not hold the BNB or fiat currency that had been (1) received by BNB Custodian in connection with the Trust's BNB Account or Fiat Account pursuant to the Custody Agreement, or (2) duly sent to the BNB Custodian by the Trust or Authorized Participants in connection with the Trust's BNB Account pursuant to the Custody Agreement but not received because of a failure caused by the BNB Custodian. The Custody Agreement provides that "Loss" shall include situations where the BNB Custodian fails to execute a valid withdrawal request, BNB are withdrawn from the Trust's BNB Account other than pursuant to a withdrawal request, or the Trust is not able to timely withdraw BNB from the BNB Account pursuant to a withdrawal request, in each case due to a failure caused by the BNB Custodian; provided, however, that the BNB Custodian's failure to permit timely withdrawals because it has determined that it cannot do so due to the requirements of applicable laws and regulations or because of the operation of its fraud detection controls shall not be considered a Loss, provided the BNB Custodian is acting reasonably and in good faith. The Custody Agreement provides that should a Loss of the Trust's BNB or fiat currency due to the negligence, fraud, willful or reckless misconduct of the BNB Custodian or a breach by the BNB Custodian of its Standard of Care occur, the BNB Custodian will, as soon as practicable, return to the Trust a quantity of the same digital asset that is equal to the quantity of digital assets involved in the Loss, or return to the Trust a quantity of the same fiat currency that is equal to the quantity of fiat currency involved in the Loss (if the Loss involved the Fiat Account). However, the Trust does not control the BNB Custodian and cannot guarantee that the BNB Custodian will perform its obligations to the Trust under the Custody Agreement, in a timely manner or at all. The Custody Agreement provides that (i) the BNB Custodian does not own or control the underlying software protocols of networks which govern the operation of digital assets (including the BNB Chain), (ii) the BNB Custodian makes no guarantees regarding their security, functionality, or availability, and (iii) in no event shall the BNB Custodian be liable for or in connection with any acts, decisions, or omissions made by developers or promoters of digital assets, including BNB.

Similarly, under the Clearing Agreement, the BNB Custodian's liability in connection with the Clearing Services is limited as follows, among others: the BNB Custodian does not have any responsibility for any sale or purchase of BNB for cash to a Liquidity Provider or Authorized Participant or their designee through the Clearing Services (such a transaction, a "Clearing Transaction"), other than as specifically identified in the Clearing Agreement. The BNB Custodian may rely upon, without liability on its part, any clearing request submitted through [     ]'s platform. Absent gross negligence, willful misconduct or fraud, the BNB Custodian shall not be liable for any loss resulting from a clearing request or the use of Clearing Services. Validation and confirmation procedures used by [     ] are designed only to verify the source of clearing requests and that each party has met its respective obligations in respect of a clearing request and not to detect errors in the content of a clearing request or to prevent duplicate clearing requests. The Trust is responsible for losses resulting from clearing requests provided by it and for any errors made by or on behalf of the Trust, any errors resulting, directly or indirectly, from fraud or the duplication of any clearing request by or on behalf of the Trust, or any losses resulting from the malfunctioning of any devices used by the Trust or loss or compromise of credentials used by the Trust to deliver clearing requests. The BNB Custodian may reject, refuse to settle or otherwise not complete any request to settle a BNB transaction through the Clearing Services for any reason necessary to comply with applicable laws and regulations or in connection with its fraud or other compliance controls and systems, and the BNB Custodian shall have no liability whatsoever to the Trust, any transaction counterparty or any other party in connection with or arising out of the BNB Custodian rejecting, refusing or otherwise not completing the settlement of a transaction through the Clearing Services. The BNB Custodian will not settle transactions through the Clearing Services: (i) if either party to a Clearing Transaction has not fully funded its accounts held with the BNB Custodian and used in connection with the Clearing Services (in the Trust's case, the Clearing Account and Fiat Account), as applicable, with the required fiat currency amount or BNB amount, as applicable, prior to the agreed expiration time; (ii) if either party to a Clearing Transaction has not confirmed its acceptance of the clearing request to the BNB Custodian prior to the agreed expiration time; (iii) if either party to a transaction is not a [     ] customer; or (iv) for any other reason as determined by the BNB Custodian

in its sole discretion to comply with applicable laws and regulation or in connection with the BNB Custodian's fraud or other compliance controls and systems. Although the BNB Custodian has represented to the Sponsor that Clearing Transactions ordinarily settle automatically within minutes once the BNB and cash have been funded by both the Trust and the Liquidity Provider or Authorized Participant or their designee in their respective accounts at the BNB Custodian used in connection with the Clearing Services (in the Trust's case, the Clearing Account and Fiat Account), the BNB Custodian is not required by the Clearing Agreement to settle the Clearing Transaction that quickly. These and the other limitations on the BNB Custodian's liability may allow it to avoid liability for potential losses, even if the BNB Custodian directly caused such losses.

The Clearing Agreement provides that it is subject to [     ]'s user agreement (the "User Agreement"). Pursuant to the User Agreement, [     ] agrees to take reasonable care and use commercially reasonable efforts in executing [     ]'s responsibilities to the Trust pursuant to the User Agreement, or such higher care where required by law or as specified by the User Agreement. [     ] uses commercially reasonable efforts to provide the Trust with a reliable and secure platform. From time to time, interruptions, errors or other deficiencies in service may occur due to a variety of factors, some of which are outside of our control. These factors can contribute to delays, errors in service, or system outages, creating difficulties in accessing the Trust's account, withdrawing fiat currency or BNB, depositing fiat currency or BNB, and/or placing and/or canceling orders.

Under the User Agreement, [     ] is not liable for any delays, failure in performance or interruption of service which result directly or indirectly from any cause or condition, whether or not foreseeable, beyond [     ]'s reasonable control, including, but not limited to, any act of God, nuclear or natural disaster, epidemic, action or inaction of civil or military authorities, act of war, terrorism, sabotage, civil disturbance, strike or other labor dispute, accident, state of emergency or interruption, loss, or malfunction of equipment or utility, communications, computer (hardware or software), Internet or network provider services.