Important Information
Grayscale Operating, LLC (“GSO”) is the parent holding company of Grayscale Advisors, LLC (“GSA”), an SEC-registered investment adviser, as well Grayscale Securities, LLC (“GSS”), an SEC-registered broker/dealer and member of FINRA, and Grayscale Investments Sponsors, LLC ("Grayscale"). Grayscale is not registered as an investment adviser under the Investment Advisers Act of 1940 and none of the investment products (“Products”) sponsored or managed by Grayscale are registered under the Investment Company Act of 1940.
Private placement securities are speculative, illiquid, and entail a high level of risk, including the risk that an investor could lose their entire investment. The Products are not suitable for any investor that cannot afford loss of the entire investment.
Carefully consider investment objectives, risk factors, fees and expenses before investing. This and other information can be found in each Product’s private placement memorandum, which may be obtained from Grayscale and, for each Product that is an SEC reporting company, the SEC’s website, or for each Product that reports under the OTC Markets Alternative Reporting Standards, the OTC Markets website. Reports prepared in accordance with the OTC Markets Alternative Reporting Standards are not prepared in accordance with SEC requirements and may not contain all information that is useful for an informed investment decision. Read these documents carefully before investing.
The shares of each Product are intended to reflect the price of the digital asset(s) held by such Product (based on digital asset(s) per share), less such Product’s expenses and other liabilities. Because each Product does not currently operate a redemption program, there can be no assurance that the value of such Product’s shares will reflect the value of the assets held by such Product, less such Product’s expenses and other liabilities, and the shares of such Product, if traded on any secondary market, may trade at a substantial premium over, or a substantial discount to, the value of the assets held by such Product, less such Product’s expenses and other liabilities, and such Product may be unable to meet its investment objective.
If the shares trade at a premium, investors who purchase shares on the secondary market will pay more for their shares than investors who purchase shares directly from authorized participants. In contrast, if the shares trade on the secondary market at a discount, investors who purchase shares directly from authorized participants will pay more for their shares than investors who purchase shares on the secondary market.
Grayscale intends to attempt to have shares of its Products quoted on a secondary market. However, there is no guarantee that we will be successful. Although the shares of certain products have been approved for trading on a secondary market, investors in the new products should not assume that the shares will ever obtain such an approval due to a variety of factors, including questions regulators, such as the SEC, FINRA, or other regulatory bodies may have regarding such products. As a result, shareholders of such products should be prepared to bear the risk of investment in the shares indefinitely.
The shares of each Product are not registered under the Securities Act of 1933, the Securities Exchange Act of 1934 (except for Products that are SEC reporting companies), the Investment Company Act of 1940, or any state securities laws. The Products are offered in private placements pursuant to the exemption from registration provided by Rule 506(c) under Regulation D of the Securities Act of 1933 and are only available to accredited investors. As a result, the shares of each Product are restricted and subject to significant limitations on resales and transfers. Potential investors in any Product should carefully consider the long-term nature of an investment in that Product prior to making an investment decision. The shares of certain Products are also publicly quoted on OTC Markets and shares that have become unrestricted in accordance with the rules and regulations of the SEC may be bought and sold throughout the day through any brokerage account.
Except as noted below, Grayscale does not store, hold, or maintain custody or control of any Product’s digital assets, but instead has entered into a Custodian Agreement on behalf of each Product with Coinbase Custody Trust Company, LLC (the “Custodian”), a third party to facilitate the security of each Product’s digital assets. The Custodian controls and secures each Product’s digital asset account, a segregated custody account to store private keys, which allow for the transfer of ownership or control of the digital asset, on each Product’s behalf. If the Custodian resigns or is removed by Grayscale or otherwise, without replacement, it could trigger early termination of such Product. Grayscale currently serves as a key maintainer for any Product’s TAO holdings.
The Products are distributed by Grayscale Securities, LLC (Member FINRA/SIPC). SIPC coverage does not apply to the crypto asset products or services mentioned.