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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growth or sustainability of the BNB Chain ecosystem in the United States and globally, or otherwise negatively affect the value of BNB held by the Trust. The effect of any future regulatory change on the Trust or the BNB held by the Trust is impossible to predict, but such change could be substantial and adverse to the Trust and the value of the Shares. For more information, see "Risk Factors—Digital asset markets in the United States exist in a state of regulatory uncertainty, and adverse legislative or regulatory developments could significantly harm the value of BNB or the Shares, such as by banning, restricting or imposing onerous conditions or prohibitions on the use of BNB, mining activity, digital wallets, the provision of services related to trading and custodying BNB, the operation of the BNB Chain, or the digital asset markets generally." THE TRUST AND BNB PRICES Overview of the Trust

The Trust is an exchange-traded fund that issues Shares that trade on the Exchange. The Trust is a passive investment vehicle that does not seek to pursue any investment strategy beyond tracking the price of BNB and staying some portion of the BNB it holds. As a result, the Trust will not attempt to avoid losses or hedge exposure arising from the risk of changes in the price of BNB. The Trust's investment objective is to reflect the performance of the price of BNB less the expenses of the Trust's operations. In seeking to achieve its investment objective, the Trust will hold BNB and will value its Shares daily based on the reported MarketVectorTM [ ], which is calculated based on prices contributed by exchanges that MarketVector believes represent the top five BNB trading platforms, based on the industry leading CCData [ ] review report. The Trust will not utilize leverage, derivatives or any similar arrangements in seeking to meet its investment objective. The Trust is sponsored by VanEck Digital Assets, LLC, a wholly-owned subsidiary of VanEck. The Trust, the Sponsor and the service providers will not loan or pledge the Trust's assets, nor will the Trust's assets serve as collateral for any loan or similar arrangement. The Trust is not actively managed. It does not engage in any activities designed to obtain a profit from, or to ameliorate losses caused by, changes in the price of BNB. Although the Trust is a passive investment vehicle, it may employ its BNB in Staking Activities, subject to receiving Staking Regulatory Approval, and accordingly may earn staking rewards and/or income from Staking Activities. There can be no assurance that Staking Regulatory Approval will ever be obtained.

The Sponsor believes that the Trust will provide a cost-efficient way for Shareholders to implement strategic and tactical asset allocation strategies that use BNB by investing in the Trust's Shares rather than purchasing, holding and trading BNB directly. The latter alternative would require selecting a BNB trading platform and opening an account or arranging a private transaction, establishing a personal computer system capable of transacting directly on the blockchain, and incurring the risk associated with maintaining and protecting a private key that is irrecoverable if lost, among other difficulties.

BNB Value

The value of BNB is determined by the value that various market participants place on BNB through their transactions. The most common means of determining the value of a BNB is by surveying one or more BNB trading platforms where BNB is traded publicly and transparently. The price of BNB on the BNB market has exhibited periods of extreme volatility, which could have a negative impact on the performance of the Trust.

On exchanges, BNB is traded with publicly disclosed valuations for each executed trade, measured by one or more fiat currencies such as the U.S. dollar or Euro. OTC dealers or market makers do not typically disclose their trade data.

Currently, there are many exchanges operating worldwide, representing a substantial percentage of BNB buying and selling activity, and providing the most data with respect to prevailing valuations of BNB. The below table reflects the average daily trading volume (in thousands of USD) of each of the BNB trading platforms included in the MarketVectorTM [ ] as of [ ] using data reported by MarketVector from [ ] to [ ]:

BNB Exchanges included in the MarketVector TM [ ] as of [ ] Average Daily Volume

The market share for BNB/USD trading of the five constituent platforms over the past four calendar quarters is shown in the table below:

Period

*Source: MarketVector

Trust Structure

The Sponsor designed the Trust in what it believes is a straight-forward structure to provide exposure to BNB. By utilizing the MarketVectorTM [ ], the Trust draws prices for its Shares off of what is in effect a "consolidated tape" for BNB, similar to the consolidated tapes or "ticker tapes" used by major stock exchanges to report trades and quotes. The term "consolidated" refers to the fact that securities, just like BNB, often trade on more than one exchange, and a consolidated tape reports not only a security's trading activity on its primary listing exchange but the trading activity on all or substantially all exchanges on which it is traded. However, the global BNB market is not subject to comparable regulatory guardrails as regulated securities markets. See "Risk Factors—Due to the unregulated nature and lack of transparency surrounding the operations of BNB trading platforms, which may be subject to regulation in a relevant jurisdiction, but may not be complying, they may experience fraud, manipulation, security failures or operational problems, which may adversely affect the value of BNB and, consequently, the value of the Shares."

The use of the MarketVectorTM [ ] is designed to eliminate from the NAV calculation pursuant to which the Trust prices its Shares those BNB trading platforms with indicia of suspicious, fake, or non-economic volume. However, there is no guarantee that such measures will be effective. See "Risk Factors— The MarketVectorTM [ ] may be affected by manipulative or fraudulent practices in the global BNB market or at constituent platforms." In addition, the use of five BNB trading platforms is designed to mitigate the potential for idiosyncratic exchange risk, as the failure of any individual BNB trading platform should not materially impact pricing for the Trust. Moreover, any attempt to manipulate the NAV would require a substantial amount of capital distributed across a majority of the five exchanges, and potentially coordinated activity across those exchanges, making it more difficult to conduct, profit from, or avoid the detection of market manipulation. The Sponsor believes that this is especially true in a well-arbitraged and distributed market, as MarketVector believes the real BNB market to be.

In addition to the above safeguards, the MarketVectorTM [ ] is calculated over twenty three-minute intervals pursuant to a methodology referred to as an equal-weighted average of the volume-weighted median price. The use of twenty consecutive three-minute segments over a sixty-minute period means a malicious actor would need to sustain efforts to manipulate the market over an extended period of time, or would need to replicate efforts multiple times, potentially triggering review from the exchange or regulators, or both. The use of a "median" price by its nature limits the ability of outlier prices that may have been caused by attempts to manipulate the price on a particular exchange, to impact the NAV, as it systematically excludes those prices from the NAV calculation.

Description of the [MarketVectorTM [ ]] Construction and Maintenance

The Sponsor has entered into a licensing agreement with MarketVector to use the MarketVectorTM [ ]. The Trust is entitled to use the MarketVectorTM [ ] pursuant to a sub-licensing arrangement with the Sponsor. The MarketVectorTM [ ] is a U.S. dollar-denominated composite reference rate for the price of BNB. The index administrator is Market Vector, a wholly-owned subsidiary of VanEck. On each day that the Exchange is open for regular trading, as promptly as practical after 4:00 p.m. Eastern time, the Administrator determines the NAV of the Trust, based on the MarketVectorTM [ ]. In determining the Trust's NAV, the Administrator values the BNB held by the Trust based on the price set by the MarketVectorTM [ ] as of 4:00 p.m. Eastern time.

The Index is calculated daily between 00:00 and 24:00 (CET) and the Index values are disseminated every 15 seconds to data vendors. The Index is disseminated in USD and the closing and intraday value is calculated over twenty three-minute intervals pursuant to a methodology referred to as an equal-weighted average of the volume-weighted median price. The intra-day data available in the MarketVectorTM [ ] is published once every 15 seconds throughout each trading day. The intra-day levels and closing levels of the MarketVectorTM [ ] are published by MarketVector. The current exchange composition of the MarketVectorTM [ ] is [ ]. The MarketVectorTM [ ] index was launched on [ ].