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On March 6, 2023, 210K Capital filed a suit in Delaware Chancery Court (the “210K Capital Action” and, together with the Fir Tree Action, the “Demands”) against the Sponsor and the Trust alleging that the Sponsor and the Trust violated 210K Capital’s information rights and seeking to compel access to the requested books and records.
−Removed: On July 10, 2023, the Sponsor, Fir Tree, and 210K Capital entered into a Settlement Agreement which resolved the Demands, in which the Sponsor and the Trust agreed to voluntarily produce certain books and records in response to the Demands without any admission of liability or fault and, without conceding the shareholders’ entitlement to any information, and without the payment of any money.
+Added: On July 10, 2023, the Sponsor, Fir Tree, and 210K Capital entered into a Settlement Agreement which resolved the Demands, in which the Sponsor and the Trust agreed to voluntarily produce certain books and records in response to the Demands without any admission of liability or fault, without conceding the shareholders’ entitlement to any information, and without the payment of any money.
+Added: On September 21, 2023, Fir Tree and 210K Capital filed stipulations of dismissal for the Demands.
On January 30, 2023, Osprey Funds, LLC (“Osprey”) filed a suit in Connecticut Superior Court against the Sponsor alleging that statements the Sponsor made in its advertising and promotion of the Trust violated the Connecticut Unfair Trade Practices Act, and seeking statutory damages and injunctive relief.
On April 17, 2023, the Sponsor filed a motion to dismiss the complaint and, following briefing, a hearing on the motion to dismiss was held on June 26, 2023.
+Added: On October 23, 2023, the Court denied the Sponsor’s motion to dismiss.
The Sponsor and the Trust believe this lawsuit is without merit and intend to vigorously defend against it.
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On June 29, 2022, the Sponsor filed a petition for review of the SEC’s final order in the United States Court of Appeals for the District of Columbia Circuit.
−Removed: The DC Circuit Court of Appeals heard oral arguments in the case on March 7, 2023.
−Removed: As of the date of this Quarterly Report, the Sponsor’s petition remains pending and the Sponsor expects to receive a decision from the DC Circuit Court of Appeals by fall of 2023.
+Added: On August 29, 2023, the D.C.
+Added: Circuit Court of Appeals granted the Sponsor’s petition and vacated the SEC’s order as arbitrary and capricious.
+Added: The SEC did not seek panel rehearing or rehearing en banc.
+Added: On October 23, 2023, the D.C.
+Added: Circuit Court of Appeals remanded the matter to the SEC.
+Added: There is no guarantee that the ruling by the D.C.
+Added: Circuit Court of Appeals will ultimately result in approval of NYSE Arca’s 19b-4 application to list the Shares of the Trust on NYSE Arca as an exchange traded product.
On March 6, 2023, Alameda Research, Ltd.
−Removed: (“Alameda”) filed a suit against the Sponsor, DCG, Michael Sonnenshein and Barry Silbert in the Court of Chancery of the State of Delaware alleging various breach of contract and fiduciary duty claims, including that the defendants had breached the terms of the trust agreements for the Trust and Grayscale Ethereum Trust (ETH) for failing to reduce its fees and authorize a redemption program.
+Added: (“Alameda”) filed a suit against the Sponsor, DCG, Michael Sonnenshein and Barry Silbert in the Court of Chancery of the State of Delaware alleging various breach of contract and fiduciary duty claims, including that the defendants had breached the terms of the trust agreements for the Trust and Grayscale Ethereum Trust (ETH) for failing to reduce the Sponsor’s fees and operate a redemption program (the “Initial Complaint”).
On April 4, 2023, the Sponsor, DCG, Michael Sonnenshein and Barry Silbert moved to dismiss the Alameda complaint.
−Removed: On May 19, 2023, the Sponsor filed its brief in support of its motion to dismiss.
−Removed: Alameda has indicated in court filings that it intends to amend its initial complaint in response to the pending motions to dismiss.
+Added: On May 19, 2023, the Sponsor filed a brief in support of its motion to dismiss.
+Added: On September 15, 2023, Alameda filed an amended complaint alleging breach of contract and fiduciary duty claims concerning the Sponsor’s purported failure to operate a redemption program that are substantially similar to those alleged in the Initial Complaint.
+Added: The Amended Complaint eliminated certain causes of action asserted in the Initial Complaint concerning purported breaches of the terms of the trust agreements and breaches of fiduciary duty based on the Sponsor’s fees for the Trust and Grayscale Ethereum Trust.
The Sponsor believes this lawsuit is without merit and intends to vigorously defend against it.
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The Sponsor and/or the Trust may be subject to additional legal proceedings and disputes in the future.
+Added: There have been no material changes to the Risk Factors last reported under “Part I, Item 1A.
+Added: Risk Factors” of the registrant’s Annual Report on Form 10-K, and under “Part II, Item 1A.
+Added: Risk Factors” of the registrant’s Quarterly Report on Form 10-Q for the period ended June 30, 2023.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.