21Shares Ethereum ETF

What they do

The Trust holds ether at four Ether Custodians — Coinbase Custody Trust Company, BitGo Bank & Trust, Anchorage Digital Bank, and BitGo New York Trust — and values its Shares daily against the CME CF Ether-Dollar Reference Rate — New York Variant. It issues and redeems Shares only in 10,000-Share Creation Baskets, in cash or in-kind for ether, and does not buy or sell ether other than for creations, redemptions and certain expenses. BNY Mellon serves as Administrator, Transfer Agent, and Cash Custodian, and Coinbase, Inc. acts as Prime Broker. The Trust has no officers, directors, or employees and is managed by the Sponsor, a wholly owned subsidiary of 21co Holdings Limited, whose ultimate parent is FalconX.

Revenue drivers

• Sponsor fee on ether holdings — The Trust pays a unitary Sponsor Fee of 0.21% of its ether holdings; this is the Trust's principal ongoing expense, not a revenue line, and the Sponsor waived the entire fee for six months from the July 23, 2024 listing or the first $500 million of Trust assets, whichever came first.
• Staking rewards on a portion of ether — The Trust's objective includes reflecting rewards from staking a portion of its ether, to the extent the Sponsor determines staking can be done without undue legal or regulatory risk, including the risk of jeopardizing grantor trust tax status.
• Share creation and redemption activity — The Trust continuously issues and redeems 10,000-Share Creation Baskets at the applicable NAV per Share on the creation order date, in cash or in-kind for ether; basket activity changes the number of outstanding Shares and the Trust's ether holdings.

Recent performance

The 10-K reports annual net income of $1.4 million for 2025. At June 30, 2026, total assets were $12.9 million and shareholder equity was $12.9 million, while total liabilities were $2.6 million as of March 31, 2026. Cash and equivalents were $59,241 at June 30, 2024, the earliest balance shown in the XBRL data.

Strategy

The Sponsor notified the Pricing Benchmark Provider on June 30, 2026 of termination, effective August 31, 2026, of the licensing agreement for the CME CF Ether-Dollar Reference Rate — New York Variant. The Sponsor intends to enter an FTSE licensing agreement on or about August 24, 2026 for index data to develop, calculate and market the Trust, with the change applied prospectively. Management states the benchmark change is not expected to materially affect NAV, the fair value measurement of the Trust's ether, or results of operations. The Trust continues to pursue staking rewards only when the Sponsor determines it can do so without undue legal or regulatory risk. The Trust remains a passive vehicle whose Sponsor does not actively manage the ether held.

Risks

• Ether price volatility — The Shares' value relates directly to the value of ether, which may be highly volatile and subject to sharp fluctuations.
• Ethereum network development — The value of the Shares depends on the development and acceptance of the Ethereum network, and a slowing or stopping of that development could adversely affect the Trust.
• Custodian security threats — Security threats to the Trust's accounts with the Ether Custodians could halt Trust operations and cause a loss of Trust assets or reputational damage.
• Private key irrevocability — Due to the nature of private keys, ether transactions are irrevocable and stolen or incorrectly transferred ether may be irretrievable, which could adversely affect an investment in the Trust.

Outlook

Management states the change in pricing benchmark provider, from the CME CF Ether-Dollar Reference Rate — New York Variant to FTSE, is not expected to have a material impact on NAV, the fair value measurement of the Trust's ether, or results of operations, and does not represent a change in accounting principle. The change will be applied prospectively from the date the successor benchmark becomes effective. The Trust and Sponsor face competition from other exchange-traded products offering exposure to spot ether or other digital assets, and there can be no assurance the Trust will grow to or maintain an economically viable size.