Exhibit 4.1
Execution Version
MASTER PARTICIPANT AGREEMENT
This Master Participant Agreement (this “Agreement”), dated as of October 3, 2022, is entered into by and among Grayscale Securities, LLC (the “Authorized Participant”), and Grayscale Investments, LLC, a Delaware limited liability company, as sponsor (the “Sponsor”) of each Trust listed on Schedule I to this Agreement (each, a “Trust” and, collectively, the “Trusts”).
SUMMARY
As provided in the trust agreement governing each Trust (each, a “Trust Agreement”), as currently in effect and described in the Confidential Private Placement Memorandum of each Trust (each, a “Memorandum”), common units of fractional undivided beneficial interest in a Trust (“Shares”) may be created or, if authorized by the Sponsor, redeemed by such Trust, in aggregations of 100 Shares (each aggregation, a “Basket”), and integral multiples thereof, and only in transactions with a party who, at the time of the transaction, shall have signed and entered into an effective Participant Agreement with such Trust. Baskets of a Trust are offered only pursuant to the relevant Memorandum, as the same may be amended from time to time thereafter, or any successor Memorandum in respect of Shares of such Trust. Under each Trust Agreement, the Sponsor is authorized to issue Baskets, or delegate authority to issue Baskets, to, and, if redemptions are authorized by the Sponsor, accept redemptions of Baskets from, Authorized Participants. The Authorized Participant may purchase Baskets of a Trust for its own account or as agent for investors who have entered into a subscription agreement (the “Subscription Agreement”) relating to such Trust with the Authorized Participant (each such investor, an “Investor”), but it does not have any obligation or responsibility to the Sponsor or any Trust to affect any sale or resale of Shares. This Agreement sets forth the specific procedures by which an Authorized Participant may create or redeem Baskets of a Trust.
Capitalized terms used but not defined in this Agreement shall have the meanings assigned to such terms in each Trust Agreement. To the extent there is a conflict between any provision of this Agreement and the provisions of a Trust Agreement, the provisions of such Trust Agreement shall control, and to the extent there is a conflict between any provision of this Agreement and the provisions of a Memorandum, such Memorandum shall control; provided, however, that if there is a conflict between the Procedures (defined below) and any provision of a Trust Agreement (other than Section 1.5 and Section 6.4(m) of such Trust Agreement) or a Memorandum, the Procedures shall control; and provided, further, that in the event of any conflict between Section 1.5 and Section 6.4(m) of such Trust Agreement and any of the provisions of this Agreement, the corresponding Memorandum or the Procedures, Section 1.5 and Section 6.4(m) of such Trust Agreement shall control. For the avoidance of doubt, any action which is referred to herein as an action being taken by the Sponsor may be taken by a party whom the Sponsor has duly authorized to take such action. Additionally, any amendments to the Procedures will not require any amendments to any Trust Agreement.
The Authorized Participant may designate one or more third parties, which may be affiliates, to source, deliver and/or receive digital assets on behalf of the Authorized Participant (any such third party, a “Liquidity Provider”). If the Authorized Participant has designated a Liquidity Provider, then where the Authorized Participant is under an obligation to deliver, receive or otherwise transfer digital assets under this Agreement (including pursuant to any provisions of any schedule or attachment hereto), that obligation shall be performed by its Liquidity Provider and not the Authorized Participant. In addition, the Authorized Participant shall cause its Liquidity Provider to comply with any representation, warranty or covenant thereof relating to the delivery, receipt or transfer of digital assets required to be made by the Authorized Participant hereunder. For the avoidance of doubt and notwithstanding anything else herein to the contrary, the Authorized Participant shall be fully liable for any failure of any Liquidity Provider to perform such obligation or make such representation, warranty or covenant and no Liquidity Provider shall receive any fees or other form of compensation from the Sponsor or any of the Trusts hereunder.
To give effect to the foregoing premises and in consideration of the mutual covenants and agreements set forth below, the parties hereto agree as follows:
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In addition, any certificate signed by any officer of the Sponsor and delivered to the Authorized Participant or counsel for the Authorized Participant pursuant hereto shall be deemed to be a representation and warranty by the Sponsor as to matters covered thereby to the Authorized Participant.
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[Signature Page Follows]
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IN WITNESS WHEREOF, the Authorized Participant and the Sponsor, on behalf of itself and each Trust, have caused this Agreement to be executed by their duly authorized representatives as of the date first set forth above.
Grayscale Investments, LLC, the Sponsor of each Trust |
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By: /s/ Michael Sonnenshein |
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Name: Michael Sonnenshein |
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Title: CEO |
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Address: 290 Harbor Drive, 4th Floor Stamford, CT 06902 |
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Email: info@grayscale.com |
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Grayscale Securities, LLC the Authorized Participant |
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By: /s/ Hugh Ross |
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Name: Hugh Ross |
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Title: CEO |
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Address: 290 Harbor Drive, 4th Floor Stamford, CT 06902
Email: gssoperations@grayscale.com
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SCHEDULE I
Trusts | Governing Document | |
1. | Grayscale Bitcoin Trust (BTC), a Delaware statutory trust formed as of September 13, 2013 | Fifth Amended and Restated Declaration of Trust and Trust Agreement of Grayscale Bitcoin Trust (BTC), dated September 12, 2018, by and among Grayscale Investments, LLC, Delaware Trust Company and the Shareholders from time to time thereunder, as amended by Amendment No. 1 and Amendment No. 2 thereto and as the same may be further amended from time to time. |
2. | Grayscale Bitcoin Cash Trust (BCH), a Delaware statutory trust formed as of January 26, 2018 | Amended and Restated Declaration of Trust and Trust Agreement of Grayscale Bitcoin Cash Trust (BCH), dated March 1, 2018, by and among Grayscale Investments, LLC, Delaware Trust Company and the Shareholders from time to time thereunder, as amended by Amendment No. 1 and Amendment No. 2 thereto and as the same may be further amended from time to time. |
3. | Grayscale Basic Attention Token Trust (BAT), a Delaware statutory trust formed as of December 18, 2020 | Amended and Restated Declaration of Trust and Trust Agreement of Grayscale Basic Attention Token Trust (BAT), dated December 18, 2020, by and among Grayscale Investments, LLC, Delaware Trust Company and the Shareholders from time to time thereunder, as the same may be further amended from time to time. |
4. | Grayscale Chainlink Trust (LINK), a Delaware statutory trust formed as of December 18, 2020 | Amended and Restated Declaration of Trust and Trust Agreement of Grayscale Chainlink Trust (LINK), dated December 18, 2020, by and among Grayscale Investments, LLC, Delaware Trust Company and the Shareholders from time to time thereunder, as the same may be further amended from time to time. |
5. | Grayscale Ethereum Trust (ETH), a Delaware statutory trust formed as of December 13, 2017 | Amended and Restated Declaration of Trust and Trust Agreement of Grayscale Ethereum Trust (ETH), dated July 3, 2018, by and among Grayscale Investments, LLC, Delaware Trust Company and the Shareholders from time to time thereunder, as amended by Amendment No. 1 and Amendment No. 2 thereto and as the same may be further amended from time to time. |
6. | Grayscale Ethereum Classic Trust (ETC), a Delaware statutory trust formed as of April 18, 2017 | Second Amended and Restated Declaration of Trust and Trust Agreement of Grayscale Ethereum Classic Trust (ETC), dated February 28, 2018, by and among Grayscale Investments, LLC, Delaware Trust Company and the Shareholders from time to time thereunder, as amended by Amendment No. 1, Amendment No. 2 and Amendment No. 3 thereto and as the same may be further amended from time to time. |
7. | Grayscale Filecoin Trust (FIL), a Delaware statutory trust formed as of October 15, 2020 | Amended and Restated Declaration of Trust and Trust Agreement of Grayscale Filecoin Trust (FIL), dated October 15, 2020, by and among Grayscale Investments, LLC, Delaware Trust Company and the Shareholders from time to time thereunder, as the same may be further amended from time to time. |
8. | Grayscale Horizen Trust (ZEN), a Delaware statutory trust formed as July 3, 2018 | Amended and Restated Declaration of Trust and Trust Agreement of Grayscale Horizen Trust (ZEN), dated August 6, 2018, by and among Grayscale Investments, LLC, Delaware Trust Company and the Shareholders from time to time thereunder, as amended by Amendment No. 1 and Amendment No. 2 thereto and as the same may be further amended from time to time. |
9. | Grayscale Litecoin Trust (LTC), a Delaware statutory trust formed as of January 26, 2018 | Amended and Restated Declaration of Trust and Trust Agreement of Grayscale Litecoin Trust (LTC), dated March 1, 2018, by and among Grayscale Investments, LLC, Delaware Trust Company and the Shareholders from time to time thereunder, as amended by Amendment No. 1 and Amendment No. 2 thereto and as the same may be further amended from time to time. |
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10. | Grayscale Livepeer Trust (LPT), a Delaware statutory trust formed as of December 18, 2020 | Amended and Restated Declaration of Trust and Trust Agreement of Grayscale Livepeer Trust (LPT), dated December 18, 2020, by and among Grayscale Investments, LLC, Delaware Trust Company and the Shareholders from time to time thereunder, as the same may be further amended from time to time. |
11. | Grayscale Decentraland Trust (MANA), a Delaware statutory trust formed as of December 18, 2020 | Amended and Restated Declaration of Trust and Trust Agreement of Grayscale Decentraland Trust (MANA), dated December 18, 2020, by and among Grayscale Investments, LLC, Delaware Trust Company and the Shareholders from time to time thereunder, as the same may be further amended from time to time. |
12. | Grayscale Solana Trust (SOL), a Delaware statutory trust formed as of November 8, 2021 | Amended and Restated Declaration of Trust and Trust Agreement of Grayscale Solana Trust (SOL), dated November 9, 2021 by and among Grayscale Investments, LLC, Delaware Trust Company and the Shareholders from time to time thereunder, as amended by Amendment No. 1 thereto and as the same may be further amended from time to time. |
13. | Grayscale Stellar Lumens Trust (XLM), a Delaware statutory trust formed as of October 26, 2018 | Amended and Restated Declaration of Trust and Trust Agreement of Grayscale Stellar Lumens Trust (XLM), dated December 4, 2018, by and among Grayscale Investments, LLC, Delaware Trust Company and the Shareholders from time to time thereunder, as amended by Amendment No. 1 and Amendment No. 2 thereto and as the same may be further amended from time to time. |
14. | Grayscale Zcash Trust (ZEC), a Delaware statutory trust formed as of October 23, 2017 | Amended and Restated Declaration of Trust and Trust Agreement of Grayscale Zcash Trust (ZEC), dated July 3, 2018, by and among Grayscale Investments, LLC, Delaware Trust Company and the Shareholders from time to time thereunder, as amended by Amendment No. 1 and Amendment No. 2 thereto and as the same may be further amended from time to time. |
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EXHIBIT A
FORM OF CERTIFIED AUTHORIZED PERSONS OF AUTHORIZED PARTICIPANT
The following are the names, titles and signatures of all persons (each an “Authorized Person”) authorized to give instructions relating to any activity contemplated by the Master Participant Agreement or any other notice, request or instruction on behalf of the Authorized Participant pursuant to the Master Participant Agreement.
Authorized Participant: Grayscale Securities, LLC
Name: Hugh Ross | Name: Allison Westmacott |
Title: CEO | Title: Compliance Officer |
Signature:______________________ | Signature:______________________ |
Name: Craig Salm | Name: |
Title: CLO | Title: |
Signature:______________________ | Signature:______________________ |
The following are email addresses (each a “Participant email”) where the Sponsor, or any party delegated by the Sponsor, may send, and from which it may receive, emails relating to any activity contemplated by the Master Participant Agreement or any other notice, request or instruction on behalf of a Trust pursuant to the Master Participant Agreement.
email 1: gssoperations@grayscale.com | email 2: |
Confirm email 1:gssoperations@grayscale.com | Confirm email 2: |
The undersigned, Hugh Ross, CEO of Grayscale Securities, LLC hereby certifies that the persons listed above have been duly elected to the offices set forth beneath their names, that they presently hold such offices, that they have been duly authorized to act as Authorized Persons pursuant to the Master Participant Agreement by and between Grayscale Securities, LLC and Grayscale Investments, LLC, dated October 3, 2022 (the “Master Participant Agreement”), and that their signatures set forth above are their own true and genuine signatures. The undersigned further certifies that the emails listed above are the correct email addresses where the Sponsor, or its delegate, may send emails relating to any activity contemplated by the Master Participant Agreement. A receipt confirmation for correspondence sent to any of the emails listed above shall serve as conclusive evidence that the confirmation was provided pursuant to the Master Participant Agreement.
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IN WITNESS WHEREOF, the undersigned has hereby set his/her hand and the seal of Grayscale Securities, LLC on the date set forth below.
Subscribed and sworn to before me | By:______________________ |
Name: Hugh Ross | |
______________________ | Title: CEO |
| Date: |
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EXHIBIT B
FORM OF CREATION ORDER FORM
Trust: ______________________
Authorized Participant: ______________________
Order Date: ______________________________________
Number of Shares to be issued: ______________________
Number of Creation Baskets to be issued:_________________________
Total Basket Amount: ___________________________
Authorized Participant Account*: ________________________
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* “Authorized Participant Account” means a digital asset wallet address provided and known to the Sponsor, its delegate and the Trust’s Security Vendors as belonging to the Authorized Participant or its Liquidity Provider.
All Creation Orders are subject to the terms and conditions of the Amended and Restated Declaration of Trust and Trust Agreement, as amended from time to time (the “Trust Agreement”) of Grayscale [ ] Trust ([ ]) (the “Trust”), as currently in effect and the Master Participant Agreement among the Authorized Participant and the Sponsor named therein (the “Master Participant Agreement”). All representations and warranties of the Authorized Participant set forth in the Master Participant Agreement are incorporated herein by reference. Capitalized terms used but not defined herein shall have the meaning given in the Procedures.
Listed below are the names of the investors that will beneficially own Shares obtained pursuant to this Creation Order (each, an “Investor”), the number of Shares that each such Investor will own and an indication of whether the Investor is a benefit plan investor (as defined in the Trust’s Memorandum).
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| ☐ benefit plan investor |
Name: |
| Number of Shares: |
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| ☐ benefit plan investor |
Name: |
| Number of Shares: |
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| ☐ benefit plan investor |
Name: |
| Number of Shares: |
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| ☐ benefit plan investor |
Name: |
| Number of Shares: |
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| ☐ benefit plan investor |
The Authorized Participant confirms to the Trust that it has, within the past three months, taken reasonable steps to verify that each such Investor is an “accredited investor” within the meaning of Rule 501(a) of Regulation D under the Securities Act, and has determined that such person is an accredited investor. Additionally, such Investor(s) represent(s) and warrant(s) in its (their) Subscription Agreement that, among other things, it has reviewed and understands the risks of an investment in the Trust, has the financial knowledge and experience to evaluate such investment, is able to bear the substantial risks of an investment in the Trust and is able to afford to lose its entire investment.
In connection with the Authorized Participant’s acceptance of an interest in the Trust, the Authorized Participant does hereby irrevocably constitute and appoint the Sponsor, and its successors and assigns, as its true and lawful Attorney-in-Fact, with full power of substitution, in its name, place and stead,
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in the execution, acknowledgment, filing and publishing of Trust documents, including, but not limited to, the following: (i) any certificates and other instruments, including but not limited to, any applications for authority to do business and amendments thereto, which the Sponsor deems appropriate to qualify or continue the Trust as a business or statutory trust in the jurisdictions in which the Trust may conduct business, so long as such qualifications and continuations are in accordance with the terms of the Trust Agreement, or which may be required to be filed by the Trust or the Trust’s Shareholders under the laws of any jurisdiction; (ii) any instrument which may be required to be filed by the Trust under the laws of any state or by any governmental agency, or which the Sponsor deems advisable to file; and (iii) the Trust Agreement and any documents which may be required to effect an amendment to the Trust Agreement approved under the terms of the Trust Agreement, and the continuation of the Trust, the admission of the signer of the Power of Attorney as a Shareholder, or of others as additional or substituted Shareholders, or the termination of the Trust, provided such continuation, admission or termination is in accordance with the terms of the Trust Agreement. The Power of Attorney granted hereby shall be deemed to be coupled with an interest and shall be irrevocable and shall survive, and shall not be affected by, the Authorized Participant’s subsequent insolvency or dissolution or any delivery by the Authorized Participant of an assignment of the whole or any portion of the Authorized Participant’s Shares.
The undersigned understands that by submitting this Creation Order, he/she is making the representations and warranties set forth in the Master Participant Agreement and is also granting an irrevocable Power of Attorney.
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The undersigned hereby certifies as of the date set forth below that he/she is an Authorized Person under the Master Participant Agreement and that he/she is authorized to deliver this Creation Order to the Sponsor on behalf of the Authorized Participant.
| _____________________________ (Please Print Name of Authorized Participant) |
Date:______________________ |
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Accepted by: | Name: |
Grayscale [ ] Trust ([ ]) | Title: |
By: Grayscale Investments, LLC, as Sponsor
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By:______________________ |
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Name:
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By:______________________ |
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EXHIBIT C
FORM OF REDEMPTION ORDER FORM
Trust: _________________________________
Authorized Participant: _________________________________
Date: ________________________________________________
Number of Shares to be redeemed: ________________________
Number of Redemption Baskets to be issued: ___________________________
Authorized Participant Account*: _____________________
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* “Authorized Participant Account” means a digital asset wallet address provided and known to the Sponsor, its delegates and the Trust’s Security Vendors as belonging to the Authorized Participant or its Liquidity Provider.
All Redemption Orders are subject to the terms and conditions of the Amended and Restated Declaration of Trust and Trust Agreement, as amended from time to time (the “Trust Agreement”), of [ ] Trust (the “Trust”) as currently in effect and the Master Participant Agreement among the Authorized Participant and the Sponsor named therein (the “Master Participant Agreement”). All representations and warranties of the Authorized Participant set forth in the Master Participant Agreement are incorporated herein by reference. Capitalized terms used but not defined herein shall have the meaning given in the Procedures.
The undersigned represents and warrants that prior to submitting this Redemption Order, the Authorized Participant has ascertained that (i) the digital asset wallet to be used in connection with the Redemption Order is owned outright by the Authorized Participant or it has full legal authority and legal and beneficial right to any digital assets transferred to such digital asset wallet and (ii) the Authorized Participant Account is appropriately designated for receipt of the number of digital assets equal to the Total Basket Amount distributed by the Trust.
THE UNDERSIGNED UNDERSTANDS THAT IT IS SOLELY RESPONSIBLE FOR THE ACCURACY OF THE AUTHORIZED PARTICIPANT ACCOUNT PROVIDED FOR THE TRANSFER OF THE TOTAL BASKET AMOUNT PURSUANT TO THIS REDEMPTION ORDER.
The undersigned does hereby certify as of the date set forth below that he/she is an Authorized Person under the Master Participant Agreement and that he/she is authorized to deliver this Redemption Order to the Sponsor on behalf of the Authorized Participant. The undersigned understands that by submitting this Redemption Order he/she is making the representations and warranties set forth in the Master Participant Agreement.
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Date:______________________ | By:______________________ |
| Name: |
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ANNEX A
ARTICLE I
SCOPE OF PROCEDURES
This Annex A to the Master Participant Agreement (the “Master Participant Agreement”) supplements the Master Participant Agreement, the Memorandum and each Trust Agreement (as defined below) with respect to the procedures (the “Procedures”) to be used in processing (1) creation orders for the creation of one or more Baskets (as defined below) (“Creation Order”) of any Trust listed on Schedule I to the Master Participant Agreement (each, a “Trust”) or (2) redemption orders for the redemption of one or more Baskets (“Redemption Order”) of any Trust. Shares of a Trust may be created or redeemed only in aggregations of 100 Shares (each such aggregation, a “Basket”) of such Trust. Because the creation and redemption of Baskets involve the transfer of digital assets between the Authorized Participant and a Trust, certain processes relating to the underlying digital asset transfers are described below. If the Authorized Participant has designated a Liquidity Provider, then all references in these Procedures to (i) the delivery, receipt or other transfer of digital assets to, from or by the Authorized Participant shall be deemed to refer to the delivery, receipt or other transfer of digital assets to, from or by the Authorized Participant's Liquidity Provider and (ii) the provision of digital asset account information to or from the Authorized Participant shall refer to the provision of such information to or from the Authorized Participant's Liquidity Provider.
EACH TRUST AND THE AUTHORIZED PARTICIPANT ACKNOWLEDGE THAT DIGITAL ASSET TRANSFERS MAY BE IRREVERSIBLE.
Capitalized terms used but not defined in these Procedures shall have the meanings assigned to them in the Master Participant Agreement.
Each Participant is responsible for ensuring that the number of (i) digital assets that equal the Total Basket Amount (as defined below) or (ii) Baskets it intends to transfer to a Trust in exchange for digital assets, respectively, are available to transfer to such Trust in the manner and at the times described in these Procedures.
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ARTICLE II
CREATION PROCEDURES
In order to create Baskets of a Trust, the Authorized Participant must transfer to such Trust the number of digital assets equal to the Total Basket Amount, as calculated in accordance with Section 2 of this Article II below. In order to facilitate the transfer of the Total Basket Amount in connection with a creation, the Sponsor, on behalf of such Trust as the digital asset recipient, will provide to the Authorized Participant the address for the Digital Asset Account belonging to such Trust, as the party initiating the transfer of digital assets. In the data packets distributed from digital asset software programs to confirm each transfer of digital assets, the Sponsor, the relevant Security Vendors and the Authorized Participant must “sign” transactions with a data code derived from entering the private key into a “hashing algorithm,” which signature serves as validation that the transaction has been authorized by the Authorized Participant, as owner of the digital assets. The signing process is facilitated by either a software program or a third party provider used to generate digital asset wallets and the related addresses for each of the relevant Trust and the Authorized Participant. An Authorized Participant will receive no fees, commissions or other form of compensation or inducement of any kind from either the Sponsor or such Trust in connection with the creation of Shares, except as otherwise set forth in the Master Participant Agreement. For the avoidance of doubt, it is understood that there may be transaction fees associated with the validation of the transfer of digital assets by the relevant digital asset network.
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ARTICLE III
REDEMPTION PROCEDURES
In order to redeem Baskets of a Trust, the Authorized Participant must transfer Baskets to such Trust and such Trust must transfer an amount of digital assets equal to the Total Basket Amount, as calculated in accordance with Section 2 of Article II, to the Authorized Participant. In order to facilitate the transfer of the Total Basket Amount in connection with a redemption, the Authorized Participant, as the digital asset recipient, will provide the address of its Authorized Participant Account to the Sponsor or its delegate, who will, instructing the relevant Security Vendors as necessary, initiate the transfer of digital assets on behalf of the relevant Trust. In the data packets distributed from digital asset software programs to confirm each transfer of digital assets, the Sponsor and the relevant Security Vendors must “sign” transactions with a data code derived from entering the private key into a “hashing algorithm,” which signature serves as validation that the transaction has been authorized by the relevant Trust, as owner of the digital assets. The signing process is facilitated by either a software program or a third party provider used to generate digital asset wallets and the related addresses for each of the relevant Trust and the Authorized Participant. An Authorized Participant will not incur any fees or other form of expenses in connection with a redemption transaction, except as otherwise set forth in the Master Participant Agreement. For the avoidance of doubt, it is understood that there may be transaction fees associated with the validation of the transfer of digital assets by the relevant digital asset network.
EACH TRUST AND THE AUTHORIZED PARTICIPANT ACKNOWLEDGE THAT DIGITAL ASSET TRANSFERS MAY BE IRREVERSIBLE.
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