STAMFORD, Conn., July 08, 2024 (GLOBE NEWSWIRE) — Grayscale Investments®, the world’s largest crypto asset manager* offering more than 20 crypto asset investment products, today announced that it has set a record date for the initial creation and distribution (the “Initial Distribution”) of shares of Grayscale Ethereum Mini Trust (“ETH Trust”) to shareholders of Grayscale Ethereum Trust (ticker: ETHE) (“ETHE”) of July 18, 2024 (the “Record Date”). Grayscale intends to list the ETH Trust on NYSE Arca under the ticker symbol “ETH”, subject to necessary regulatory approvals.
As part of the planned initial distribution, each shareholder who holds shares of ETHE stock (the “ETHE Shares”) as of 4:00 pm ET on the record date will be entitled to receive shares of ETH Trust, a Delaware statutory trust sponsored by Grayscale (the “ETH Shares”), as described in a Preliminary Information Statement on Schedule 14C first filed with the Securities and Exchange Commission on April 23, 2024 and last amended on July 8, 2024 (the “Preliminary Information Statement”). ETHE will also file a Definitive Information Statement on Schedule 14C with the Securities and Exchange Commission after the record date.
For the Initial Distribution, ETHE will contribute 10% of the Ether it holds as of 4:00 PM ET on the Record Date to the ETH Trust, and each holder of ETHE Shares as of 4:00 PM ET on the Record Date will be entitled to receive ETH Shares pro rata based on a 1:1 ratio. That is, for each ETHE Share held by an ETHE Shareholder as of 4:00 PM ET on the Record Date, such ETHE Shareholder will be entitled to receive one ETH Share on the Distribution Date, as described below and in the Preliminary Information Statement. ETHE Shareholders are not required to pay any consideration, exchange or transfer their existing ETHE Shares, or take any other action to receive ETH Shares.
|
Recorded date |
July 18, 2024 |
|
ETHE Share Ratio: ETH |
1:1 |
|
% of ETHE |
Ten% |
|
Distribution date |
Follow the conditions stated |
Importantly, the launch of the ETH Trust and the initial distribution of ETH Shares to ETHE Shareholders are subject to regulatory review and customary conditions. The “Distribution Date” will be the first date after the Record Date on which the conditions to the Initial Distribution are satisfied, including (i) the filing and effectiveness of the ETH Trust’s registration statement on Form 8-A to register the ETH Shares under the Securities Act, (ii) the effectiveness of the ETH Trust’s registration statement on Form S-1 (Registration No. 333-278878) under the Securities Act, and (iii) the ETH Shares being approved for listing on the NYSE Arca. The Distribution Date will be no earlier than July 19, 2024. In addition, because these conditions have not been satisfied as of today, there can be no assurance that the Initial Distribution will be made according to Grayscale’s expected schedule or at all.
Subject to the limitations and qualifications set forth in the Preliminary Information Statement filed by ETHE (including with respect to the qualification of both ETHE and the ETH Trust as grantor trusts for U.S. federal income tax purposes and the proper allocation of existing tax base between the ETHE Shares and the ETH Shares), ETHE and the beneficial owners of the ETHE Shares are not expected to recognize any gain or loss for U.S. federal income tax purposes as a result of the Initial Distribution. Accordingly, neither ETHE’s contribution of Ethers to the ETH Trust nor ETHE’s distribution of shares of ETH Trust shares to ETHE shareholders as of 4:00 p.m. Eastern Time on the Record Date are expected to be reported as giving rise to any income, gain, loss, deduction, credit or income to the beneficial owners of ETHE Shares (or any intermediary holding ETHE Shares).
After July 18, 2024 (the “Ex-Date”), ETHE Shares will trade without the right to receive ETH Shares in the Initial Distribution. It is not expected that there will be an “when-issued” market for ETH Shares prior to the Distribution Date. Following the Initial Distribution, ETHE Shareholders as of 4:00 PM ET on July 18, 2024 will automatically see both ETHE Shares and ETH Shares in their portfolio or investment account on the Distribution Date.
The Grayscale team will communicate additional updates as necessary, including important updates regarding the expected distribution date, pending regulatory approvals and customary conditions, and announcing the first day of trading for the Grayscale Ethereum Trust and Grayscale Ethereum Mini Trust on NYSE Arca.
*Based on assets under management as of June 28, 2024
No offers or solicitations
This communication is for informational purposes only in your capacity as a stockholder of ETHE and does not constitute an offer to sell or the solicitation of an offer to buy any securities or the solicitation of any vote or approval, nor will there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. Stockholder approval of the Initial Distribution is not required under applicable law, and the Company is not seeking stockholder approval of ETHE.
Forward-Looking Statements
Certain statements contained herein may be forward-looking statements and other forward-looking statements, which are based on Grayscale’s beliefs and assumptions and involve known and unknown risks and uncertainties that may cause actual events to differ materially from those expressed or implied in such statements. Grayscale undertakes no obligation to update the forward-looking statements contained herein, and users should not place undue reliance on such statements, which speak only as of the date hereof. While Grayscale has taken reasonable care to ensure that the information contained herein is accurate, no express or implied representation or warranty (including any liability to third parties) is made by Grayscale as to its accuracy, reliability or completeness. Users should not make investment decisions based on these forward-looking statements. There can be no assurance that the Initial Distribution will be made according to Grayscale’s expected schedule, or at all.
The importance of getting professional tax advice
This communication is not intended to be, and does not constitute, tax advice. As further described in the section entitled “Material U.S. Federal Income Tax Consequences of the Initial Distribution” in the Preliminary Information Statement filed by ETHE, the U.S. federal income tax consequences of the Initial Distribution are complex, uncertain in certain respects and may be affected by the circumstances unique to the beneficial owners of ETHE Shares. Beneficial owners of ETHE Shares who received ETH Shares in the Initial Distribution, and intermediaries holding ETHE Shares or ETH Shares, should consult their own tax advisors regarding the U.S. federal income tax consequences of the Initial Distribution, including the proper allocation of existing tax base between ETHE Shares and ETH Shares. Please see the Preliminary Information Statement filed by ETHE for further information, including the Initial Distribution and other U.S. federal income tax considerations related to the ownership of ETH Shares.
Additional information and where to find it
A definitive information statement on Schedule 14C will be provided to ETHE shareholders on or after the record date in substantial compliance with Regulation 14C under the Securities Exchange Act and for the purpose of notifying ETHE shareholders of the Initial Distribution. The information statement will describe the Grayscale Ethereum Mini Trust, the risks of owning shares in the Grayscale Ethereum Mini Trust and other details regarding the Initial Distribution and will be made available on our website at www.grayscale.com/documents#regulatoryfilings. ETHE shareholders will not be required to pay any consideration, exchange or surrender their existing ETHE shares or take any other action to receive shares of the Grayscale Ethereum Mini Trust in connection with the Initial Distribution.
Unlike most mutual funds and ETFs, ETHE is not a fund registered under the Investment Company Act of 1940 and is not subject to regulation under the 1940 Investment Company Act.
Grayscale Ethereum Trust and Grayscale Ethereum Mini Trust Risk Disclosure:
An investment in the Grayscale Ethereum Trust or Grayscale Ethereum Mini Trust may be considered speculative and is not intended as a complete investment program. An investment in ETHE or Grayscale Ethereum Mini Trust should be considered by those who have the financial ability to maintain their investment and can bear the risk of total loss associated with an investment in ETHE or Grayscale Ethereum Mini Trust. The extreme fluctuations in trading prices that many digital assets, including Ether, have recently experienced and may continue to experience, may have a material adverse effect on the value of ETHE and Grayscale Ethereum Mini Trust, and shares of each trust may lose all or substantially all of their value. Digital assets are a new and rapidly evolving industry. The value of ETHE and Grayscale Ethereum Mini Trust will depend on the acceptance of digital assets, the capabilities and development of blockchain technology, and the fundamental investment characteristics of the digital assets. Digital asset networks are developed by diverse contributors, and the perception that certain prominent contributors will no longer contribute to the network may have an adverse effect on the market price of the relevant digital assets. Digital assets may be subject to concentrated ownership, and large-scale sales or distributions by holders of such digital assets may adversely affect the market price of such digital assets. The value of ETHE and the Grayscale Ethereum Mini Trust is directly related to the value of the underlying digital assets, which may be highly volatile and fluctuate due to a variety of factors.
A registration statement relating to the Grayscale Ethereum Mini Trust has been filed with the SEC but has not yet become effective. Investments cannot be made in, and funds will not be accepted for, the Grayscale Ethereum Mini Trust until the registration statement becomes effective. Investors should carefully consider the investment objectives, risks, charges and expenses of the Grayscale Ethereum Mini Trust before investing. A preliminary prospectus containing information about the Grayscale Ethereum Mini Trust is available by emailing info@grayscale.com. The information in the preliminary prospectus is not complete and is subject to change. You should read the final prospectus carefully before investing. When available, it will be available from the same sources. This communication is not an offer to sell shares and is not a solicitation of an offer to buy shares in any state in which the offer or sale is not permitted.
Grayscale Investments, LLC is the sponsor of the Grayscale Ethereum Trust and the Grayscale Ethereum Mini Trust.
About Grayscale Investments®
Grayscale provides investors access to the digital economy through a suite of regulated, forward-thinking investment products. Founded in 2013, Grayscale is the world’s largest crypto asset manager with a proven track record and deep expertise. Investors, advisors, and allocators turn to Grayscale for single-asset, diversified, and thematic exposure. Some Grayscale products are distributed by Grayscale Securities, LLC (member FINRA/SIPC) and some products are managed by Grayscale Advisors, LLC.
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