Nasdaq Proposes Listing 21Shares SUI ETF for SUI Token Tracking

The Nasdaq Stock Market LLC has submitted a proposed rule change to the Securities and Exchange Commission to list and trade shares of the 21Shares SUI ETF under Nasdaq Rule 5711(d). This rule governs the listing and trading of Commodity-Based Trust Shares on the Exchange. The 21Shares SUI ETF, referred to as the Trust, is a passive investment vehicle designed to track the price of SUI tokens, the native token of the Sui Network. The Trust will not engage in speculative trading or use leverage, derivatives, or similar arrangements to achieve its investment objective.

The Trust is structured as a Delaware statutory trust and will be managed by 21Shares US LLC, the Sponsor. The Trustee, CSC Delaware Trust Company, will oversee the Trust's operations, while a third-party Administrator will handle administrative tasks. The Trust's investment objective is to track the performance of SUI, as measured by the CME CF Sui—Dollar Reference Rate—New York Variant, adjusted for the Trust's expenses and other liabilities. The Pricing Benchmark is calculated by CF Benchmarks Ltd. based on the aggregated trade flow of major SUI trading platforms.

The Trust will hold SUI and value its shares daily based on the Pricing Benchmark. Authorized Participants, who are financial firms authorized to purchase or redeem shares from the Trust, will facilitate the creation and redemption of shares. These transactions will be conducted in blocks of 10,000 shares, known as Baskets, and will involve cash deposits and withdrawals rather than direct transfers of SUI. The SUI Counterparty, a designated third party, will handle the delivery and conversion of SUI related to creation or redemption orders.

The Trust is not an investment company registered under the Investment Company Act of 1940 and is not subject to regulation under the Commodity Exchange Act of 1936. The Trust will not engage in activities that generate additional SUI or rewards, and it will disclaim any incidental rights or assets received from forks or airdrops. The Trust's net asset value (NAV) will be calculated daily based on the Pricing Benchmark, and the NAV per share will be determined by dividing the NAV by the number of outstanding shares.

The Sui Network, on which SUI operates, is a decentralized blockchain platform designed to support a wide range of applications, particularly in decentralized finance (DeFi), non-fungible tokens (NFTs), and other blockchain-based services. The network aims to address scalability and efficiency issues by leveraging advanced consensus mechanisms and innovative data structures. The Sui Network uses a delegated proof-of-stake consensus mechanism, which is more energy-efficient and scalable than traditional proof-of-work mechanisms. The network's architecture allows for secure and decentralized cross-chain interactions and is designed to be highly interoperable with other blockchain networks.

The SUI token serves multiple purposes on the Sui Network, including staking, paying gas fees, acting as a medium of exchange, and participating in governance. The total supply of SUI is capped at 10 billion, and the token is stored on the blockchain and linked to a unique digital address or wallet. The wallet holds the cryptographic keys associated with SUI, rather than the SUI itself, and ownership is established by recording the unique address and the amount of SUI held on the blockchain.

The Pricing Benchmark, which is used to value the Trust's shares, is a standardized reference rate published by the Benchmark Provider. It is designed to reflect the performance of SUI in U.S. dollars and is calculated daily based on the notional value of SUI trading activity across major SUI spot exchanges. The Benchmark Provider administers the Pricing Benchmark and ensures its integrity through codified policies and compliance with the UK Benchmarks Regulation.

The Trust will provide information regarding its SUI holdings and other relevant data on its website, which will be publicly accessible at no charge. The website will include the prior business day's NAV per share, the prior business day's Nasdaq official closing price, and other quantitative information. The intraday indicative value (IIV) will be calculated and disseminated every 15 seconds during the regular market session to reflect changes in the value of the Trust's SUI holdings.

The creation and redemption of shares will be facilitated by Authorized Participants, who will deliver cash to create shares and receive cash when redeeming shares. The SUI Counterparty will handle the delivery and conversion of SUI related to creation or redemption orders. The Trust will maintain ownership and control of SUI in a manner consistent with good delivery requirements for spot commodity transactions. The Commission has approved or disapproved exchange filings to list and trade series of Trust Issued Receipts, including spot-based Commodity-Based Trust Shares, based on whether the listing exchange has in place a comprehensive surveillance sharing agreement with a regulated market of significant size related to the underlying commodity to be held.