SEC Filing Document

Company: Grayscale BNB ETF
Ticker: GBNB
CIK: 2106762
Filing Type: S-1/A
Document Type: S-1/A
Date Filed: 2026-05-15
Accession Number: 0001193125-26-227224
Exchange: 
SIC Code: 6221
SIC Description: Commodity Contracts Brokers & Dealers
URL: https://www.sec.gov/Archives/edgar/data/2106762/000119312526227224/bnb_s-1_amendment_2.htm

Chunk 46 of 90
Word Count: 1471
Character Count: 9466

Document Content:

Trust would be permitted to accept only Staking Consideration received in the form of BNB, and would not be permitted to accept any Other Staking Consideration in the form of other digital assets. Neither the Trust, nor the Sponsor on behalf of the Trust, would have the ability under the Staking Arrangements to take advantage of any variations in the market to improve the investments of shareholders, including with respect to variations based on the value of BNB or the amount of Staking Consideration received as staking rewards. As a whole, the Staking Arrangements would permit the Trust to retain ownership of its BNB at all times for U.S. federal income tax purposes while simultaneously protecting and conserving the Trust Estate by mitigating the risk that another party or group could control a majority of the BNB Smart Chain and engage in transactions that could reduce the Trust Estate’s value.

A Staking Provider must meet certain requirements in order to be selected to participate in the Provider-Facilitated Staking model contemplated by the Staking Arrangements. For example, each Staking Provider would be required to be unrelated to both the Trust and the Sponsor. Moreover, a Staking Provider would also be required to regularly enter into staking arrangements with unrelated persons involving activities similar to the Staking Arrangements. Under the Staking Arrangements, the Staking Provider would bear all of its own expenses (including those on account of its validation activities).

The Staking Provider would be the node operator and would be obligated to operate the validator through which the Trust’s BNB is staked to ensure that validation occurs. The Trust’s BNB would be staked from the Trust’s wallets administered by the Custodian, and the Staking Provider would perform any related validation activities. The Trust would not itself undertake any validation activities, and the Sponsor would not be required to perform any services. Moreover, the Sponsor would not be required to make any decisions or take any actions, other than (i) selecting the Staking Provider(s) and entering into the corresponding Staking Arrangement(s), and (ii) determining, from time to time, what portion of the Trust’s BNB to stake and informing the Staking Provider(s) of those determinations.

Subject to the Staking Condition being satisfied and subject to compliance with certain related requirements, the Sponsor anticipates that it will engage in Staking with respect to all of the Trust’s BNB at all times, except (i) as necessary to pay the Sponsor’s Fee and the Sponsor’s Staking Fee, (ii) as necessary to pay any additional Trust expenses, (iii) as necessary to satisfy existing and reasonably foreseen potential redemption requests as determined by the Sponsor, (iv) as necessary to reduce the BNB obtained by the Trust as Staking Consideration to cash for distribution at regular intervals, (v) as necessary to reduce the BNB obtained by the Trust as Staking Consideration to cash in connection with the Trust’s liquidation, (vi) as necessary to take protective actions in respect of vulnerabilities in the source code or cryptography underlying the BNB Smart Chain and/or its proof-of-staked-authority protocol, its staking smart contracts or its validator client software, (vii) if the Custodian discontinues its arrangements with the Trust and such discontinuance affects the Trust’s BNB, for so long as is reasonably necessary to re-establish those arrangements or to establish similar arrangements with other parties, (viii) if the Custodian discontinues its arrangements with the Staking Provider and such discontinuance affects the Trust’s BNB, for so long as is reasonably necessary to re-establish those arrangements or to establish similar arrangements with other parties, (ix) in the event of a change in applicable law or regulation, (x) as necessary to maintain a Liquidity Sleeve (as defined herein), (xi) as necessary pursuant to a “contingent liquidity arrangement” within the meaning of Section 6.02(12) of IRS Revenue Procedure 2025-31 or (xii) in accordance with any other exception that is expressly contemplated by an opinion, ruling or tax guidance that satisfies the Staking Condition. All BNB received by the Trust in connection with the creation of new Shares, or as Staking Consideration, would also be staked upon receipt by the Trust, unless one or more of the exceptions described in clauses (i)-(xii) above applies. During the portion of any Uplisted Period during which the Staking Condition has been satisfied with respect to a particular form of Staking, the Trust Agreement imposes further requirements relating to IRS Revenue Procedure 2025-31.

Subject to the satisfaction of the Staking Condition with respect thereto, the Sponsor may implement certain liquidity procedures that it believes will ensure that the Trust will satisfy existing and reasonably foreseen redemption requests. Specifically, the Sponsor intends to maintain a portion of unstaked BNB in the Trust (the “Liquidity Sleeve”). Because the BNB in the Liquidity Sleeve is freely transferable, there is no timing mismatch between settlement of Shares in primary market redemptions and the BNB transfer time. The percentage of the Trust’s BNB comprising the Liquidity Sleeve will be dynamic and subject to adjustment based on anticipated primary and secondary market activity of the Shares and the BNB unbonding process. If the Trust engages in Staking, the Sponsor will seek to stake as much of the Trust’s BNB as is practicable (i.e., up to 100%) at all times, with the remainder of the Trust’s BNB remaining unstaked in order to address the various exceptions and other considerations described herein, including the satisfaction of the Staking Condition. The Sponsor cannot provide an

expected percentage of the Trust’s assets that will be held in the Liquidity Sleeve in the ordinary course as the size of the Liquidity Sleeve may be adjusted in order to address liquidity needs, anticipated redemption activity, and other considerations described herein and further described in the Trust’s staking policy. The Sponsor will make the Trust’s staking policy available to shareholders on the Sponsor’s website. The percentage of the Trust’s BNB that is staked each day will be reported the following day at 4:00 p.m., New York time, on etfs.grayscale.com/gbnb.

In the future and subject to the satisfaction of the Staking Condition thereto, the Sponsor, on behalf of the Trust, may be able to enter into short-term financing arrangements or implement other mechanisms to manage BNB liquidity constraints. For example, in the future, the Sponsor may arrange for the Trust to enter into redemption orders involving the delivery of BNB to a Liquidity Provider on a delayed basis (i.e., when the appropriate number of the Trust’s BNB are or become freely transferable), after the Liquidity Provider has delivered cash to the Trust to settle the redemption order. Under a delayed delivery order, the Variable Fee payable by an Authorized Participant would be adjusted, based on the estimated length of time to BNB delivery, to compensate the Liquidity Provider for agreeing to accept settlement on a delayed basis. No further adjustment to the Variable Fee would be made, and the Trust would not be required to further compensate the Liquidity Provider (or be entitled to compensation from the Liquidity Provider) if the actual date of BNB delivery differed from the estimated delivery date. It is also possible that, in connection with future redemption orders, the Sponsor may make arrangements for the Trust to obtain liquid BNB from the Custodian or another institutional liquidity provider in exchange for the Trust’s present or future delivery of a similar number of BNB tokens, although the details of any such future arrangement are not presently known. These and other liquidity risk policies and procedures are intended to be consistent with NASDAQ’s generic listing standards as well as IRS Revenue Procedure 2025-31. However, there can be no assurance that such arrangements would be available as intended or provide sufficient liquidity to satisfy redemption requests.

Under the Staking Arrangements, any Staking Consideration earned would accrue in accordance with the BNB Smart Chain’s rewards distribution mechanism to the Trust’s wallets administered by the Custodian. Periodically, the Trust would either (i) distribute BNB received as Staking Consideration to the Trust’s beneficiaries (likely using a liquidating agent), (ii) sell that BNB for cash and distribute the proceeds to the Trust’s beneficiaries, (iii) retain the BNB in the Trust, (iv) pay a portion of the Staking Consideration to the Sponsor (the “Sponsor’s Staking Fee”) as consideration for its facilitation of the Staking Arrangements or (v) a combination of the foregoing, in the Sponsor’s sole discretion. Before engaging in Staking, the Sponsor expects to implement a staking policy with respect to the Trust, which describes the frequency of, and conditions under which the Trust would make such distributions, if any, to the Trust’s beneficiaries. The Sponsor would make such staking policy available to shareholders on the Sponsor’s website. The Trust (through the Custodian) would maintain control and remain the record and beneficial owner of the staked tokens at all times, and the tokens would remain associated with the Trust’s wallet.