We advised Grayscale on the novel seeding structure akin to a corporate spinoff, and SEC approval for the NYSE Arca listing

Davis Polk advised Grayscale Investments, LLC on the formation, initial seeding and successful listing of Grayscale Ethereum Mini Trust (“ETH”) as an exchange-traded fund, or ETF. Grayscale seeded the ETH trust through a contribution by Grayscale Ethereum Trust (“ETHE”) of 10% of its Ether to the ETH trust as consideration and in exchange for newly created shares of the ETH trust, which were then distributed pro rata to shareholders of ETHE. Similar to ETHE, the ETH trust will offer investors exposure to Ether through traditional securities brokerage and retirement savings accounts, but with a materially lower management fee as compared with ETHE.

Shares of the trust are listed on NYSE Arca under the ticker “ETH.” Approval of the ETF application and listing does not indicate Securities and Exchange Commission approval of the investment opportunity.

Davis Polk advised Grayscale on the structuring of this novel transaction, which is akin to a corporate spinoff, representing the first time that an ETF has ever been seeded through a contribution of assets and distribution of shares to the holders of another publicly traded investment product.

The Davis Polk capital markets team included partners Dan Gibbons and Joseph A. Hall and associates Dylan H. Lojac, Agustin N. Lopez Roualdes and Ryan Mainous. Partners Zachary J. Zweihorn and Gabe Rosenberg provided financial institutions advice. The tax team included partners Patrick E. Sigmon and Lucy W. Farr and associate Ted Lee. Members of the Davis Polk team are based in the New York and Washington DC offices.

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