10-K

如果註冊人是《證券法》第405條所定義的知名經驗豐富的發行人，則通過勾選標記進行驗證。是的沒有 ☒

如果註冊人無需根據該法案第13條或第15（d）條提交報告，則通過勾選標記進行驗證。是的沒有 ☒

通過勾選標記標明註冊人是否（1）在過去12個月內（或在註冊人被要求提交此類報告的較短期限內）提交了1934年證券交易法第13或15（d）條要求提交的所有報告，以及（2）在過去90天內是否遵守此類提交要求。是☒沒有☐

通過勾選來驗證註冊人是否已在過去12個月內（或在要求註冊人提交此類文件的較短期限內）以電子方式提交了根據S-t法規第405條（本章第232.405條）要求提交和發布的所有互動數據文件。是☒沒有☐

通過複選標記來確定註冊人是大型加速申報人、加速申報人、非加速申報人、小型報告公司還是新興成長型公司。請參閱《交易法》第120條第2條中「大型加速申報人」、「加速申報人」、「小型報告公司」和「新興成長型公司」的定義。

如果是新興成長型公司，請通過勾選標記表明註冊人是否選擇不利用延長的過渡期來遵守根據《交易法》第13（a）條規定的任何新的或修訂的財務會計準則。 ☒

通過勾選標記檢查登記人是否已提交報告並證明其管理層根據《薩班斯-奧克斯利法案》（15 U.S.C.）第404（b）條對其財務報告內部控制有效性的評估7262（b））由編制或發布審計報告的特許會計師事務所執行。 ☐

如果證券是根據該法案第12（b）條登記的，請通過勾選標記表明文件中包含的登記人的財務報表是否反映了對先前發布的財務報表錯誤的更正。 ☐

通過勾選標記來驗證這些錯誤更正是否是需要根據§240.10D-1（b）對註冊人的任何高管在相關恢復期內收到的激勵性補償進行恢復分析的重述。☐

通過勾選標記檢查註冊人是否是空殼公司（定義見《交易法》第120條第2款）。是的 ☐ 沒有預設

根據OTC Markets Group，Inc.報告的2024年3月31日股票收盤價，註冊人非關聯公司持有的註冊人股份的總市值在該日期： $7,843,782

儘管我們對10-k表格年度報告中包含的所有披露負責，但在某些情況下，我們依賴於從我們認為可靠的第三方來源獲得的某些市場和行業數據。市場估計是通過使用獨立行業出版物並結合我們對Stellar Lumens（「XLM」）行業和市場的假設來計算的。雖然我們不知道有關本文中列出的任何市場、行業或類似數據的任何錯誤陳述，但此類數據涉及風險和不確定性，並且可能會因各種因素而發生變化，包括在「前瞻性陳述」和「第1A項」標題下討論的因素。本年度報告中的風險因素。

這份Form 10-k年度報告包含有關GrayScale Stella Lumens Trust(XLM)(以下簡稱“信託”)的財務狀況、經營結果、計劃、目標、未來業績和業務的“前瞻性陳述”。“可能”、“可能”、“將會”、“應該”、“預期”、“計劃”、“預期”、“相信”、“估計”、“預測”、“潛在”或“繼續”等詞語之前、之後或包括這些詞語的表述旨在識別一些前瞻性表述。本年度報告中包含的所有涉及未來將發生或可能發生的活動、事件或發展的陳述(歷史事實陳述除外)均為前瞻性陳述，包括市場價格和條件的變化、信託的運作、GrayScale Investments LLC(“保薦人”)的計劃以及對信託未來成功和其他類似事項的提及。這些聲明只是預測。實際事件或結果可能與此類陳述大不相同。這些陳述是根據提案國對歷史趨勢、當前狀況和預期未來發展的看法以及與情況相適應的其他因素所作的某些假設和分析。然而，實際結果和發展是否符合主辦方的期望和預測，受到一些風險和不確定性的影響，包括但不限於“第一部分第1A項所述的風險和不確定性”。風險因素。前瞻性陳述是基於保薦人在陳述發表之日的信念、估計和意見作出的，除非適用法律要求，否則信託和保薦人沒有義務或義務在這些信念、估計和意見或其他情況發生變化時更新前瞻性陳述。因此，投資者被告誡不要依賴前瞻性陳述。可能對信託公司的業務、財務狀況或經營結果和未來前景產生重大不利影響，或可能導致實際結果與信託公司的預期大不相同的因素包括但不限於：

除非另有說明或上下文另有要求，否則本年度報告中的術語「我們」、「我們的」和「我們」是指代表信託行事的發起人。

本年度報告中包含行業術語表和其他定義術語表，從第頁開始 98.

本年度報告補充並在適用的情況下修改了信託經修訂和重述的信託聲明和信託協議中定義的備忘錄目的

Grayscale Stellar Lumens Trust（XLM）（「信託」）是特拉華州法定信託基金，於2018年10月26日根據特拉華州法定信託法的規定向特拉華州務卿提交信託證書而成立。

該信託基金的目的是持有恒星流明(「XLM」)。《星際分類賬》採用了一種名爲《星際共識協議》的共識機制，這是瑞普爾首創的聯邦拜占庭協議的實施，類似於股權證明，但不包括賭注獎勵或激勵。相反，聯邦拜占庭協議是一種共識機制，在這種機制中，節點獨立決定信任哪些其他節點來獲取信息。流明交易大約每六秒結算一次，這比比特幣的大宗生產要快，後者大約每10分鐘結算一次。截至2024年9月30日，Stella Lumens的流通供應量約爲296枚億硬幣，超過了比特幣目前約1980枚萬硬幣的流通供應量。截至2024年9月30日，恒星流明和比特幣的24小時交易額分別約爲4,130美元萬和154美元億。截至2024年9月30日，恒星流明的總市值爲29美元億，而比特幣的億總價值爲12515美元。截至2024年9月30日，根據coinmarket cap.com的跟蹤，XLM是按市值計算的第31大數字資產。

Stellar Network的預期功能是允許用戶或企業安全、快速地進行跨貨幣交易。傳統的跨貨幣交易通常需要流動性提供商跨多個貨幣對工作以促進交易，這增加了交易成本並且可能需要時間，特別是當在兩個很少交易的貨幣對之間進行交易時。爲了減少與此類交易相關的成本和時間，Stellar Network包含了自己的原生數字資產XLm。此外，Stellar Network還提供一個去中心化的交易平台，用於創建和交易代幣化資產，該資產跟蹤外幣或USDC等穩定幣的價格。XLM相對於其他數字資產的主要優勢是其在全球外匯交易中用作中介，但尚未被廣泛採用。

Stellar由Stellar發展基金會（「SDF」）的一群科學家、顧問和工程師於2014年創建，其中包括Ripple Labs，Inc.的聯合創始人之一Jed McCaleb。Stellar Network不是通過Ripple網絡的分叉創建的，但它確實與Ripple網絡有一些相似之處。例如，Stellar Network最初採用Ripple協議共識算法作爲其共識機制，但由於Stellar Ledger的分叉和後續升級，該算法被Stellar共識協議取代。

與XLm類似，XRP是一種數字資產，用於快速有效地促進跨貨幣支付。然而，XRP的唯一功能是促進跨貨幣交易。與Stellar Network不同，Ripple網絡不促進代幣化資產的創建或提供去中心化交易平台。

SDF（也稱爲Stellar.org）負責監督所有現有XLm的創建，並作爲其保管任務的一部分，繼續監督絕大多數XLm的分發方式。最初，SDF創建了1000亿 XLm，並要求分配如下：（i）50%給個人，（ii）25%給爲Stellar網絡的發展和採用做出貢獻的企業、政府、機構或非營利組織等合作伙伴，（iii）在2016年10月和2017年8月進行的贈送中，比特幣持有者獲得19%，XRP持有者獲得1%;（iv）5%保留用於SDF運營費用。根據Stellar協議，除了按每年1%的固定通脹率增加供應外，無法創建或分發進一步的XLm，該固定通脹率於2019年10月根據Stellar社區投票刪除。

2019年11月，SDF移除或「燒燬」了XLM當時約1，500亿總供應中的約5，500億，以減少其所有權股份。因此，截至2019年11月，SDF持有XLM約500億XL m總供應量中的約250亿XL m（約佔XL m供應量的50%）。SDF表示，將按以下方式分配剩餘的XLm：（i）120亿用於直接開發，（ii）100亿用於用例投資，（iii）60亿用於用戶獲取（「用戶獲取」）和（iv）20億用於生態系統支持。有關更多信息，請參閱「-XLm行業和新XLm市場創造概覽」。

截至2024年9月30日，該信託持有流通中的XLm約0.4%。信託基金的地位規模本身並不使贊助商或信託基金能夠參與或以其他方式影響恒星網絡的發展。作爲一個去中心化的數字資產網絡，Stellar Network由多個利益相關者組成，包括XLm的核心開發人員、用戶、服務、企業、驗證者和其他群體，信託基金只是其中的一部分。此外，與代幣持有者參與網絡治理的其他協議相反，XLm的所有權不授予此類權利。

2019年1月11日，該信託通過向特拉華州國務卿提交信託證書修訂證書，將其名稱從Stellar Lumens Investment Trust更改爲Grayscale Stellar Lumens Trust（XLM）。該信託定期向經修訂的1933年證券法（「證券法」）第501（a）條含義內的某些「認可投資者」發行代表信託所有權的部分未分割受益權益（「股份」）的共同單位，以換取XLm的存款。該股票在OTC Markets Group Inc.上報價。s OTCQX® 最佳市場（「OTCQX」），股票代碼爲「GXLm」。

Grayscale Investments，LLC是該信託的發起人和管理人（「發起人」），CSC Delaware Trust Company是該信託的受託人（「受託人」），Continental Stock Transfer & Trust Company是該信託的轉讓代理人（以該身份稱爲「轉讓代理人」），Coinbase Custody Trust Company，LLC是該信託的託管人（「託管人」）。

該信託僅不時向某些授權參與者（「授權參與者」）發行一批或多批100股股份（一批100股股份稱爲「籃子」）的股份。提供籃子以換取XLm。目前，發起人沒有爲股份實施贖回計劃，因此信託不可贖回股份。由於缺乏持續的贖回計劃，以及價格波動、交易量和數字資產交易平台因欺詐、故障、安全漏洞或其他原因關閉，無法保證股份的價值將反映信託XLm的價值，減去信託的費用和其他負債，並且股份可能會以大幅溢價或大幅折扣的價格交易信託XLm的價值，減去信託的費用和其他負債。

下午4：00一籃子股票的美元價值，紐約時間，在創建訂單的交易日等於籃子金額（創建一籃子股票所需的XLm金額）乘以「指數價格」（通過對截至下午4：00的前一24小時內的價格和交易量數據應用加權算法計算得出的XLm價格），紐約時間，源自每個工作日反映在CoinDesk Lumens價格指數（XLMX）（「指數」）中的選定數字資產交易平台。指數價格採用非GAAP方法計算，不用於信託的財務報表。請參閱「-XLm行業和市場概述-XLm價值-指數和指數價格。」

籃子金額通過除以（x）信託在下午4：00擁有的XLm金額來確定，紐約時間，在該交易日，扣除代表信託應計但未付費用和費用的美元價值的XLm金額（使用當時的指數價格轉換，並結轉至小數點後八位）後，乘以（y）當時已發行股份的數量（所得商計算爲XL m的億分之一（即，進行到小數點後八位）），並將該商乘以100。

股份既不是發起人或受託人的權益，也不是發起人或受託人的義務。

申辦者維護一個互聯網網站：www. gray scale.com/Crypto-products/gray scale-stellar-Lumens-trust/，註冊人通過該網站提供10-k表格的年度報告、10-Q表格的季度報告、8-k表格的當前報告以及根據1934年證券交易法第13（a）或15（d）條提交或提供的這些報告的修訂案，經修訂後（「交易法」），在向SEC提交或提供後免費提供。有關該信託的更多信息也可以在SEC的EDGAR數據庫中找到，網址爲www.sec.gov。

上述網站以及本文提及的任何網站的內容均不包含在本文件或我們向SEC提交或提供的任何其他報告或文件中。此外，我們對這些網站URL的引用僅爲非活動文本引用。

該信託的投資目標是股份價值（基於每股XLm），以反映信託持有的XLm價值，參考指數價格減去信託的費用和其他負債確定。迄今爲止，該信託尚未實現其投資目標，OTCQX上報價的股票並未反映該信託持有的XLm的價值，減去信託的費用和其他負債，而是以溢價和折扣的價格進行交易，有時這是巨大的。

如果股票的交易溢價很高，在OTCQX購買股票的投資者將比通過私募購買股票的投資者支付更高的價格。由於各種原因，股票價值可能不反映信託的XLM的價值，減去信託的費用和其他負債，包括規則144規定的私募購買的股票的持有期、沒有持續的贖回計劃、信託停止創建、XLM價格波動、由於欺詐、故障、安全漏洞或其他原因導致數字資產交易平台的交易量或關閉，以及OTCQX和全球交易平台交易XLM的非實時交易時間。因此，在減去信託的開支和其他負債後，股票的交易價格可能會繼續大幅高於信託的XLM價值或大幅折讓信託的價值，信託可能無法在可預見的未來實現其投資目標。

例如，2021年10月19日至2024年9月30日，OTCQX上的股票收盤價相對信託每股資產淨值的最大溢價爲461%，平均溢價爲135%，OTCQX上的股票收盤價低於信託每股資產淨值的最大折扣爲35%，平均折扣爲9%。股票收盤價（OTCQX下午4：00報），紐約時間，2021年10月19日至2024年9月30日期間的每個工作日，報價已折扣206天。截至2024年9月30日（本期最後一個工作日），信託股票在OTCQX上的報價較信託每股資產淨值溢價111%。2024年2月7日之前，資產淨值被稱爲數字資產控股，每股資產淨值被稱爲每股數字資產控股。請參閱「第7項。管理層對財務狀況和運營結果的討論和分析-二級市場交易。」

雖然對股份的投資並不是對XLm的直接投資，但股份旨在爲投資者提供一種具有成本效益且便捷的方式來獲得XLm的投資風險。對XLm的大量直接投資可能需要昂貴且

有時，與XLm的收購、安全和保管有關的安排很複雜，可能涉及支付大量費用以通過美元現金支付從第三方促進者手中收購此類XLm。由於股份的價值與信託持有的XLm的價值相關，因此了解XLm的投資屬性和市場非常重要。

在私募中購買的股份是限制性證券，不得轉售，除非是根據《證券法》和州證券法豁免登記的交易，並且任何此類交易必須事先得到發起人的批准。在確定是否授予批准時，發起人將特別考慮是否滿足《證券法》第144條的條件，包括其中規定的必要持有期，以及任何其他適用法律。未經發起人全權決定批准而出售股份的任何嘗試從始即無效。有關更多信息，請參閱「-股份轉讓限制的描述」。

根據美國公認會計原則（「美國公認會計原則」）的要求，就財務報表而言，該信託的XLm按公允價值列賬。截至下午4：00，信託根據信託認爲其主要市場的數字資產市場提供的價格確定XLm的公允價值，紐約時間，估值日。根據美國公認會計原則確定的信託淨資產價值在本年度報告中稱爲「主要市場資產淨值」。2024年2月7日之前，主要市場資產淨值被稱爲資產淨值。請參閱「第7項。管理層對財務狀況和運營結果的討論和分析-關鍵會計政策和估計-主要市場和公允價值確定」，了解有關信託主要市場選擇的更多信息。

該信託使用指數價格來計算其「資產淨值」，這是一種非GAAP指標，是以美元表示的信託資產（美元、其他法定貨幣、附帶權利或IR虛擬貨幣除外）的總價值，減去以「-XLm估值和資產淨值的確定」中規定的方式計算的信託費用和其他負債的美元價值。「每股資產淨值」是通過將資產淨值除以當前已發行股份數量計算的。資產淨值和每股資產淨值不是根據美國公認會計原則計算的衡量標準。資產淨值無意替代根據美國公認會計原則計算的信託主要市場資產淨值，每股資產淨值無意替代根據美國公認會計原則計算的信託主要市場資產淨值。2024年2月7日之前，NV被稱爲數字資產控股，主要市場NV被稱爲NV。

目前，該信託尚未實施股份贖回計劃，因此該信託不可贖回股份。此外，信託基金可能會因各種原因而長時間停止創作，包括與叉子、空投和其他類似事件有關。因此，授權參與者無法利用股份市值偏離信託每股資產淨值時創造的套戥機會，這可能導致股份的交易價格大幅溢價或大幅折扣信託每股資產淨值的價值。

在獲得美國證券交易委員會的監管批准和保薦人自行決定批准的情況下，信託未來可以實施贖回計劃。然而，由於保薦人不相信美國證券交易委員會會在此時受理豁免規則的申請，以運營正在進行的贖回計劃，保薦人目前無意尋求美國證券交易委員會的監管批准，以運營正在進行的贖回計劃。即使將來尋求這種救濟，也不能保證何時給予這種救濟，或者是否會給予這種救濟。如果該等寬免獲得批准，而保薦人批准贖回計劃，則該等股份將可根據信託協議及相關參與者協議的規定贖回。雖然保薦人不能確切地預測贖回計劃的實施將對股票的交易價格產生什麼影響(如果有的話)，但贖回計劃將允許授權參與者利用當股票的市值偏離信託的XLM價值時產生的套戥機會，減去信託的費用和其他負債，這可能會降低股票在OTCQX交易時的溢價或折扣，這些溢價或折扣有時是相當大的。

關於股票交易價格偏離每股資產淨值的風險的討論，見「項目1A」。風險因素-與信託和股份有關的風險因素-由於根據規則144的持有期，缺乏持續的贖回計劃，以及信託有能力不時停止創建，因此沒有套戥機制來保持股票的價值與指數價格密切相關，並且股票的交易歷史上一直大幅溢價或大幅折讓每股資產淨值，「」第1A項。風險因素-與信託和股票有關的風險因素-由於場外交易平台和數字資產交易平台市場之間的非現行交易時間，股票的交易價格可能爲、高於或低於信託的每股資產淨值，「」第1A項。風險因素-與信託和股票有關的風險因素-如果股票交易高於或低於信託的每股資產淨值「和」項目1A，股東可能會在他們的投資中蒙受損失。風險因素--與信託和股份有關的風險因素--對轉讓和贖回的限制可能導致股份價值的損失。

根據信託協議的條款，信託在某些情況下需要解散。此外，贊助商可以自行決定出於多種原因解散信託，包括贊助商自行決定出於任何原因終止信託事務是可取的或可取的。例如，如果申辦者確定XLm是

保薦人不打算允許萬億以違反聯邦證券法的方式繼續持有XLm(因此可能會解散信託或可能尋求以符合聯邦證券法的方式經營信託)，無論這一決定最初是由保薦人自己做出的，還是因爲聯邦法院支持XLm是證券保薦人的指控。關於信託在何種情況下可以解散的進一步討論，見「--信託協議說明--信託的終止」。見“第1A項。風險因素--與信託和股票相關的風險因素--確定XLM或任何其他數字資產是一種「證券」可能會對XLM的價值和股票價值產生不利影響，並可能導致信託的非常、非經常性支出或終止。“

該股票旨在爲投資者提供通過證券投資獲得數字資產的機會。截至2024年9月30日，每股股份約爲86.4588 XLm。XLm的接受、轉讓和保管的後勤工作由發起人和託管人處理，相關費用計入股份價值。因此，除了通常與投資任何其他私募證券相關的任務或成本之外，股東沒有額外的任務或成本。

該信託在以下方面與許多競爭的數字資產金融工具區分開來：

信託的活動僅限於（i）發行籃子以換取轉移給信託的XLm作爲與創作相關的對價，（ii）根據需要轉讓或出售XLm、附帶權利和IR虛擬貨幣以支付贊助商費用和/或任何額外信託費用，（iii）轉讓XLm以換取交出贖回的籃子（須獲得SEC的監管批准和贊助商的批准），（iv）導致贊助商在信託終止時出售XLm、附帶權利和IR虛擬貨幣，（v）分發附帶權利和/或IR虛擬貨幣或出售其所得現金，以及（vi）根據信託協議、託管協議、指數許可協議和參與者協議的條款進行完成此類活動所需的所有行政和安全程序。

此外，信託可以從事任何必要或可取的合法活動，以促進股東獲得附帶權利或IR虛擬貨幣，前提是此類活動不與信託協議的條款衝突。該信託不會受到積極管理。它不會從事任何旨在從XLm市場價格變化中獲取利潤或減輕由此造成的損失的活動。

信託可能不時憑藉其對XLM的所有權而獲得附帶權利和/或IR虛擬貨幣，通常是通過Stella Ledger中的叉子、向XLM持有者提供的空投或其他類似活動。根據信託協議的條款，信託可以就信託對附帶權利的所有權採取任何必要或適當的法律行動，包括收購IR虛擬貨幣，除非此類行動將對信託作爲美國聯邦所得稅目的授予人信託的地位產生不利影響，或者信託協議禁止這樣做。這些行動包括(I)在數碼資產市場出售附帶權利和/或IR虛擬貨幣，並將現金收益分配給股東；(Ii)向股東或代表股東行事的代理人分配附帶權利和/或IR虛擬貨幣實物，以供該代理出售；以及(Iii)不可撤銷地放棄附帶權利或IR虛擬貨幣。信託還可以使用附帶權利和/或IR虛擬貨幣來支付保薦人的費用和額外的信託費用，如果有的話，如下文「-費用；XLM的銷售」一節所述。然而，爲厘定信託的資產淨值、每股資產淨值、主要市場資產淨值及主要市場每股資產淨值，信託預期不會考慮其可能持有的任何附帶權益或IR虛擬貨幣。

對於任何分叉、空投或類似事件，贊助商可酌情決定促使信託將附帶權利或IR虛擬貨幣實物分配給股東代理轉售，或不可撤銷地放棄附帶權利或IR虛擬貨幣。在向代表股東行事的代理人進行實物分配的情況下，股東代理人將嘗試出售附帶權利或IR虛擬貨幣，如果代理人能夠做到這一點，則將扣除費用和任何適用的預扣稅後的現金收益匯給股東。不能保證代理商可能變現的任何附帶權利或IR虛擬貨幣的價格，並且在代理商進行任何銷售後，附帶權利或IR虛擬貨幣的價值可能會增加或減少。在放棄附帶權利或IR虛擬貨幣的情況下，信託將不會收到附帶權利或IR虛擬貨幣的任何直接或間接代價，因此股票的價值將不會反映附帶權利或IR虛擬貨幣的價值。

2019年7月29日，保薦人向託管人遞交了一份通知(「創設前放棄通知」)，聲明信託在沒有直接或間接對價的情況下不可撤銷地放棄，在緊接信託創建股票的每次時間(任何這樣的時間，「創設時間」)之前生效，以及在該時間本來有權獲得的所有附帶權利和IR虛擬貨幣(任何此類放棄，「創設前放棄」)；但在下列情況下，預製放棄將不適用於任何附帶權利和/或IR虛擬貨幣：(I)信託在創設之前的任何時間已經或正在採取肯定行動，以獲取或放棄該等附帶權利和/或IR虛擬貨幣，或(Ii)該等附帶權利和/或IR虛擬貨幣已受到先前的預製放棄的約束。肯定行動是指保薦人向託管人發出的書面通知，表明信託有意(I)獲取和/或保留任何附帶權利和/或IR虛擬貨幣，或(Ii)在相關創建時間之前放棄任何附帶權利和/或IR虛擬貨幣。

在確定是否採取平權行動以獲取和/或保留附帶權利和/或IR虛擬貨幣時，信託會考慮多種因素，包括：

在確定IR虛擬貨幣是否是或可能是聯邦證券法下的證券時，發起人會考慮許多因素，包括聯邦證券法下「證券」的各種定義以及解釋這些定義要素的聯邦法院裁決，例如美國最高法院在豪伊和天窗案件以及SEC及其工作人員的報告、命令、新聞稿、公開聲明和演講，就數字資產何時可以成爲聯邦證券法中的證券提供指導。

由於創建前放棄通知，自2019年7月29日以來，信託在任何股份創建時間之前不可撤銷地放棄了其當時可能有權獲得的任何附帶權利或IR虛擬貨幣。信託無權接受根據創建前放棄通知或平權行動放棄的任何附帶權利或IR虛擬貨幣。此外，根據託管協議或其他規定，託管人無權代表信託行使、獲取或持有任何此類廢棄的附帶權利或IR虛擬貨幣（視具體情況而定），或在信託終止與託管人的託管協議時將任何此類廢棄的附帶權利或IR虛擬貨幣轉讓給信託。

保薦人打算在與信託的法律顧問、稅務顧問和託管人協商的基礎上，逐一評估每個分叉、空投或類似事件，如果保薦人酌情認爲放棄這樣的放棄符合信託的最佳利益，保薦人可能決定放棄因硬分叉、空投或類似事件而產生的任何附帶權利或IR虛擬貨幣。如果保薦人決定出售任何附帶權利或IR虛擬貨幣，保薦人將向或通過符合聯邦和州反洗錢(AML)和了解您的客戶(KYC)法規的許可要求和做法的合格金融機構執行銷售，其中可能包括授權參與者、流動性提供者(定義見下文「信託授權參與者的服務提供者」)或其一個或多個關聯公司。在任何一種情況下，保薦人預期授權參與者或流動資金提供者只有在授權參與者或流動資金提供者認爲有可能在數碼資產交易平台或授權參與者或流動資金提供者可進入的其他場所交易附帶權利或IR虛擬貨幣的情況下，才願意代表信託與保薦人進行交易。一般來說，任何此類授權參與者或流動性提供者只能根據每個場所提供的信息和保證，進入其有理由相信符合適用法律(包括聯邦和州許可要求)運營的數字資產交易平台或其他場所。

雖然信託的投資目標是讓股份的價值(按每股XLM計算)反映信託所持XLM的價值，減去信託的開支及其他負債，但該等股份可能會以低於或高於每股資產淨值的價格在OTCQX第二市場(或日後在另一個第二市場)交易。交易價格相對於每股資產淨值的折讓或溢價可能會受到OTCQX與更大的數字資產交易平台之間非同時交易時間和流動性的影響。而股票從上午6點開始在OTCQX上市和交易。在紐約時間下午5點之前，數字資產市場的流動性可能會根據較大的數字資產交易平台的數量和可用性而波動。因此，在數字資產市場流動性有限或主要數字資產交易平台離線期間，交易價差以及由此產生的股票溢價或折扣可能會擴大。

Stellar是一個開源、去中心化的平台，用於使用區塊鏈技術進行貨幣兌換。Stellar網絡最初部分源自XRP分類帳網絡的代碼庫，並且基於共享公共分類帳，類似於比特幣。然而，Stellar Network與其他數字資產網絡的區別在於，它的目的是通過其名爲Lumens（「Lumens」或「XLM」）的數字資產實現交易效用，而不是價值儲存，該資產通過Stellar Network轉移，以快速、可靠地跨境轉移資金，只需幾分之一分錢，並連接銀行、支付系統和人們。

與去中心化的比特幣網絡類似，任何人都可以加入並開始使用星形網絡；然而，與在完全未經許可的區塊鏈上運行的比特幣網絡不同，星形網絡是半許可的，因爲它要求用戶維護一個受信任的驗證者列表，即所謂的「錨」，並允許用戶根據其列表上是否經過足夠數量的驗證者的驗證來接受或拒絕某個版本的分佈式分類賬。大多數主播是銀行、儲蓄機構、農民合作社、中央銀行和匯款公司等組織。此外，2024年3月，星際網絡實施了一項名爲「Soroban」的升級，如下所述，允許用戶實施智能合同--即在網絡中的每台計算機上執行的通用代碼，可以基於一組複雜的邏輯條件指示信息和價值的傳輸。使用智能合約，用戶可以創建市場，存儲債務或承諾登記，代表財產所有權，根據有條件的指令轉移資金，並在Stella Network上創建XLM以外的數字資產。在索羅班目前的實施下，智能合同操作是在恒星網絡上執行的，以換取XLM的付款。Stella Network是旨在將區塊鏈的使用擴大到不僅僅是P2P貨幣系統的多個項目之一。

Stellar協議得到SDF的支持，SDF是一家非營利組織，由Joyce Kim和Mt.創始人Jed McCaleb於2014年創立。Gox和Ripple的聯合創始人，以及Interstellar，Interstellar是一家同樣由McCaleb先生創立的營利性技術公司，主要爲Stellar Network開發支付和其他技術解決方案。SDF的使命是促進全球金融獲取、識字和包容性。在過去的幾年裏，SDF爲Stellar網絡的發展和XLm的發展做出了貢獻，XLm在Stellar網絡中轉移，包括維護Stellar代碼庫、支持爲Stellar做出貢獻的技術社區，以及教育監管機構和其他Stellar利益相關者。

Interstellar是區塊鏈開發公司Chain，Inc.合併的結果。以及光年公司，後者由麥卡萊布先生在SDF的支持下於2017年創立。Interstellar是一家支付公司，開發了與Stellar兼容的自助託管錢包和去中心化交換協議。除了擔任SDF聯合創始人和首席架構師外，McCaleb先生還擔任Interstellar的CTO，也是其董事會成員。除了McCaleb先生在SDF和Interstellar中都擔任職位之外，Interstellar對Stellar或XLm沒有直接影響力。

Stella Network的預期功能是允許用戶或企業安全、快速地進行交叉貨幣交易。傳統的交叉貨幣交易通常需要流動性提供者跨越多個貨幣對來促進交易，這增加了交易成本，而且可能是時間密集型的，特別是在兩個很少交易的貨幣對之間進行交易時。爲了減少與此類交易相關的成本和時間，恒星網絡包括自己的原生數字資產，即XLM。XLM有兩個用途。首先，XLm扮演着一個小型的反垃圾郵件角色。需要XLM來支付交易費和Stella Network上帳戶的最低餘額，以防止人們淹沒網絡並幫助確定交易優先級。這項費用可以防止惡意用戶淹沒網絡，也就是所謂的拒絕服務(DoS)攻擊。XLm作爲一種安全措施，可以緩解DoS攻擊，這些攻擊試圖在Stella Ledger中生成大量交易或消耗大量空間。同樣，Stella Network要求所有帳戶至少持有1 XLM的餘額(截至2024年9月30日，約爲0.10美元)。這一要求鼓勵用戶通過消除被放棄的帳戶來清理STELLAR分類賬，從而確保所有帳戶都可能在STELLAR網絡上具有經濟效用。其次，XLM可能會爲多貨幣交易提供便利。XLM有時會促進貨幣對之間的交易和流動性，而這些貨幣對之間沒有大型直接市場，起到了橋樑的作用。當XLM和所涉及的每種貨幣之間有一個流動性市場時，這一功能是可能的，允許流動性提供者使用XLM在兩種貨幣之間轉移價值，而不是跨幾個貨幣對工作。根據設計，Stella上的交易和帳戶成本非常低。除了作爲跨貨幣支付平台，Stella Network還提供一個分散的交易所，用於創建和交易跟蹤外幣或穩定貨幣價格的象徵性資產，例如USDC。

與比特幣等其他數字資產不同，比特幣是通過漸進驗證過程創建的，SDF在2014年推出恒星網絡時創建了1000亿 XLm。作爲其監管任務的一部分，SDF負責監督絕大多數XLm的分配方式。最初的1000億 XLm由SDF創建並持有，並根據初始分配計劃進行分配。2019年11月，SDF移除或「燒燬」了其持有的約550亿XLm，以減少其所有權股份，並將根據2019年11月的燒燬和分配計劃分配剩餘的XLm。有關更多信息，請參閱「-創建新XLm」。

與XLm類似，XRP是一種數字資產，用於快速有效地促進跨貨幣支付。然而，XRP的唯一功能是促進跨貨幣交易。與Stellar Network不同，Ripple網絡不促進代幣化資產的創建，也不提供去中心化的交換平台。

智能合同是在區塊鏈上運行的程序，可以在滿足某些條件時自動執行。智能合同促進了任何代表價值的東西的交換，例如金錢、信息、財產或投票權。使用智能合同，用戶可以發送或接收數字資產、創建市場、存儲債務或承諾登記冊、代表財產或公司的所有權、根據有條件指令轉移資金並創建新的數字資產。

2024年3月，Stellar Network實施了名爲「Soroban」的升級，允許用戶在Stellar Network上使用智能合約。

使用Soroban的開發涉及在智能合同的基礎上構建更復雜的工具，例如去中心化應用程序（DApps）和自治組織，稱爲去中心化自治組織（DDA）;以及全新的去中心化網絡。例如，代表用戶分發慈善捐款的公司可以將捐贈的資金保存在智能合同中，只有在慈善機構滿足某些預定義條件的情況下，這些資金才會支付給慈善機構。

爲了直接在Stellar網絡上擁有、轉移或使用XLm，而不是通過託管人等中間人，一個人通常必須擁有互聯網訪問權限才能連接到Stellar網絡。XLm交易可以在最終用戶之間直接進行，無需第三方中介。爲了防止雙重消費XLm的可能性，用戶必須通過將交易數據廣播給其網絡對等點來通知Stellar Network該交易。Stellar Network通過在Stellar Ledger中記錄每筆交易來確認防止雙重支出，Stellar Ledger是公開且透明的。這種針對雙重支出的記錄和驗證是通過Stellar Network共識流程完成的，該流程將「塊」數據（包括最近的交易信息）添加到Stellar Ledger中。

在直接在Stellar Ledger上進行XLm交易之前，用戶通常必須首先在其計算機或移動終端上安裝Stellar Network軟件程序，該軟件程序將允許用戶生成與XLm地址（通常稱爲「錢包」）相關的私人和公共密鑰對。Stellar Network軟件程序和XLm地址還使用戶能夠連接到Stellar Network並將XLm傳輸到其他用戶並從其他用戶接收XLm。

每個Stellar Network地址或錢包都與唯一的「公鑰」和「私有密鑰」對關聯。要接收XLm，XLm接收者必須向發起轉移的一方提供其公鑰。該活動類似於美元交易的收款人在電匯指令中向付款人提供路由地址，以便現金可以電匯到收款人的帳戶。付款人通過「簽署」一項交易來批准轉移到收款人提供的地址，該交易由收款人的公鑰與付款人轉移XLm的地址的私有密鑰組成。然而，接收者不會公開或向發送者提供其相關的私有密鑰。

接收者和發送者都不會在交易中透露他們的私人密鑰，因爲私人密鑰授權將該地址中的資金轉移給其他用戶。因此，如果用戶丟失了他或她的私人密鑰，用戶可能會永久失去對相關地址中包含的XLm的訪問權限。同樣，如果與XLm關聯的私有密鑰被刪除並且沒有進行備份，XLm就會無法挽回地丟失。發送XLm時，用戶的Stellar Network軟件程序必須使用相關的私有密鑰驗證交易。此外，由於Stellar Network上的每次計算都需要處理能力，因此付款人支付的轉賬涉及交易費。生成的經過數字驗證的交易由用戶的Stellar Network軟件程序發送到Stellar Network驗證器，以允許交易確認。

一些XLM交易是在區塊鏈外進行的，因此不會記錄在Stella Ledger中。這些「區塊鏈外交易」涉及轉讓持有XLm的特定數字錢包的控制權或所有權，或重新分配集合所有權數字錢包中的某些XLm的所有權，例如數字資產交易平台擁有的數字錢包。與區塊鏈上的交易在《明星分類賬》上公開記錄不同，區塊鏈外交易的信息和數據通常不公開。因此，區塊鏈外交易並不是真正的XLM交易，因爲它們不涉及星形網絡上的交易數據傳輸，也不反映XLM在星形分類賬中記錄的地址之間的移動。出於這些原因，區塊鏈外交易受到風險，因爲任何此類XLM所有權轉移都不受星際網絡背後的協議保護，也不記錄在區塊鏈機制中並通過區塊鏈機制進行驗證。

與比特幣等其他數字資產不同，比特幣是通過漸進驗證過程創建的，SDF在2014年推出恒星網絡時創建並持有了1000亿 XLm。作爲保存最初XLm創建的監管任務的一部分，SDF負責監督絕大多數XLm的分配方式。SDF持有的最初1000億 XLm最初要求分配如下：

繼Stellar網絡和分銷計劃推出後，XLm供應量以每年1%的固定通脹率增加。此外，XLm供應受到限制，不得創建或分發進一步的XLm。2019年10月，Stellar社區投票決定取消通貨膨脹率。請參閱「風險因素-與數字資產相關的風險因素-Stellar Development Foundation控制着大量XLm的分發。SDF未來對XLm的分配、對這些分配可能發生的看法、其改變分配計劃的能力，或者未能以恒星網絡的最佳利益分配XLm，都可能導致XLm的價格下降。」

2019年11月，SDF移除或「燒燬」了XLM當時約1，500亿總供應中的約5，500億，以減少其所有權股份。因此，截至2019年11月，SDF持有XLM約500億XL m總供應量中的約250亿XL m（約佔XL m供應量的50%）。SDF已表示將按以下方式分配剩餘XLm：

Stellar網絡由處理事務的分佈式服務器保持運行。當用戶的Stellar Network軟件簽名並將交易信息傳輸到服務器時，交易開始，服務器在整個Stellar Network中轉發這些候選交易，以便在Stellar Ledger上處理。與傳統分類帳一樣，Stellar分類帳記錄了屬於Stellar Network上每個帳戶的所有餘額和交易的列表。全球Stellar Ledger的完整副本託管在運行Stellar軟件的每個服務器上。任何實體都可以運行Stellar服務器。這些服務器構成了去中心化的Stellar網絡，允許Stellar Ledger儘可能廣泛地分發。服務器通過一種名爲「恒星分類帳」的機制同步和驗證

達成共識，確保交易有效併成功記錄在全球Stellar Ledger上。例如，如果Stellar Network上的用戶想要向另一名用戶發送5美元的付款，則大多數服務器必須同意發件人實際上在Stellar Network上擁有價值5美元的積分，然後才能將交易標記爲有效。在恒星網絡上達成共識的整個過程大約每2到5秒發生一次。

如上所述，與通過漸進驗證過程創建的比特幣等其他數字資產不同，SDF在2014年推出恒星網絡時創建了1000亿 XLm。推出後，XLm供應量以每年1%的固定通脹率增長，直到2019年10月Stellar社區投票取消通脹率。2019年11月，SDF移除或「燒燬」了XLM當時約1，050億總供應中的約5，500億，以減少其所有權股份。根據Stellar協議，XLm供應受到限制，不得創建或分發進一步的XLm。有關更多信息，請參閱「-創建新XLM-2019年11月燒傷和分發計劃」。

截至2024年9月30日，約有296亿 XLm已分發和流通，其餘XLm由SDF持有。

儘管Stellar Network的協議是一個開源項目，但它主要由SDF管理，SDF通常控制協議源代碼的修改和開發。因此，通常是SDF開發人員能夠訪問和更改Stellar Network源代碼，因此，他們負責正式發佈Stellar Network源代碼的更新和其他更改。例如，如果第三方開發人員提交更改Stellar Network源代碼的請求，SDF的審查者必須批准該請求，之後Stellar Ledger的SDF維護者將實現該請求。

Stellar Network源代碼更新的發佈並不保證更新將被自動採用。用戶和服務器必須通過下載建議的修改來接受對Stellar Network源代碼所做的任何更改。

恒星網絡源代碼的修改僅對下載它的恒星用戶和驗證者有效。如果修改僅被一定比例的用戶和驗證者接受，恒星網絡將發生分裂，一個網絡將運行修改前的源代碼，而另一個網絡將運行修改後的源代碼。這樣的劃分被稱爲「叉子」。請參閱「項目1A。風險因素-與數字資產相關的風險因素-臨時或永久的「分叉」或「克隆」可能會對股票的價值產生不利影響。」因此，作爲實際問題，只有在被擁有恒星網絡大部分處理能力的參與者集體接受的情況下，對源代碼的修改才成爲恒星網絡的一部分。

XLm的價值由各個市場參與者通過交易對XLm的價值決定。確定XLm價值的最常見方法是通過調查一個或多個公開透明交易XLm的數字資產交易平台。

在每個在線數字資產交易平台上，XLm以公開披露的每次執行交易的估值進行交易，該估值通過美元或歐元等一種或多種法定貨幣或廣泛使用的加密貨幣比特幣來衡量。場外交易商或做市商通常不會披露其交易數據。

截至2024年9月30日，指數中包含的數字資產交易平台爲Coinbase、Bitstamp和Kraken。如下文進一步描述的那樣，發起人和信託有理由相信這些數字資產交易平台中的每個都嚴格遵守適用的美國聯邦和州許可要求，並維持旨在遵守反洗錢和KKC法規的實踐和政策。

Coinbase：美國-基於交易平台，在金融犯罪執法網絡（「FinCEN」）註冊爲貨幣服務業務（「ESB」），並獲得紐約州金融服務部（「NYFS」）BitLicense下的虛擬貨幣業務許可，以及美國各州的匯款機構。

位戳：英國-該交易平台在FinCEN註冊爲MSb，並根據NYFS Bit許可證獲得虛擬貨幣業務許可，以及美國各州的匯款機構。

海怪：美國-基於交易平台，在FinCEN註冊爲MSb，並在美國各州獲得匯款授權。Kraken不持有Bit許可證。

目前，全球範圍內有多個數字資產交易平台運營，在線數字資產交易平台佔XLm買賣活動的很大一部分，並且提供了有關XLm當前估值的最多數據。這些交易平台包括成熟的交易平台，例如指數中包含的交易平台，這些平台提供了多種買賣XLm的選擇。下表反映了截至2024年9月30日指數中每個數字資產交易平台（統稱爲「成分交易平台」）的XLm交易量和XLm-美元交易對的市場份額，使用自信託成立以來的數據：

指數中包含的數字資產交易平台的住所、監管和合規性各不相同。有關每個數字資產交易平台的信息（如果有的話）可以在此類數字資產交易平台的網站等地方找到。

儘管該指數旨在準確捕捉XLM的市場價格，但第三方可能能夠在不包括在該指數的組成數字資產交易平台的公開或非公開市場上買賣XLM，並且此類交易可能以遠高於或低於指數價格的價格進行。此外，XLM在不同數字資產交易平台上的價格可能會有所不同，包括不同數字資產交易平台上的費用結構或行政程序的差異。例如，根據指數提供商提供的數據，在截至2024年9月30日的年度內的任何一天，指數中包含的任何單一數字資產交易平台的紐約時間下午4：00現貨價格與指數價格之間的最大差異爲0.20%，而紐約時間下午4：00指數中包含的每個數字資產交易平台的現貨價格與指數價格之間的最大差異的平均值爲0.45%。在同一時期，紐約時間下午4點，指數中所有數字資產交易平台的現貨價格與指數價格之間的平均差額爲0.003%。本分析考慮了在整個期間納入該指數的所有數字資產交易平台。如果這些價格與指數價格存在重大差異，投資者可能會對該公司跟蹤XLM市場價格的能力失去信心。

該指數是XLm價格的以美元計價的綜合參考利率。該指數旨在（1）減輕欺詐、操縱和其他異常交易活動對XLm參考利率的影響，（2）提供XLm的實時、成交量加權公允價值，（3）適當處理和調整非市場相關事件。

指數價格由指數提供商通過一個流程來確定，在該流程中，交易數據被清理和彙編，以便通過算法減少投機或操縱交易的影響。這是通過根據相對於可觀察集的價格偏差以及每個場所相對於可觀察集的近期和長期交易量調整每個數據輸入的權重來實現的。指數價格採用非GAAP方法計算，不用於信託的財務報表。

除非另有說明，否則本報告中所有提及的資產淨值和每股信託資產淨值均使用指數價格計算。2024年2月7日之前，資產淨值被稱爲數字資產控股，每股資產淨值被稱爲每股數字資產控股。

指數中包含的數字資產交易平台由指數提供商採用國際證券委員會組織（「IOSCO」）財務基準原則指導的方法進行選擇。對於交易平台要成爲成分交易平台，它必須滿足以下列出的標準（「納入標準」）：

當數字資產交易平台不再滿足納入標準時，它將從成分交易平台中刪除。指數提供商目前不將來自場外市場或衍生品平台的數據包括在成分交易平台中。目前不包括場外數據，因爲交易可能包括爲更大流動性支付的顯著溢價或折扣，這造成了相對於更活躍的市場的不平衡比較。場外交易也有更大的可能性不是獨立的，因此不能代表真實的市場價格。XLM衍生品市場目前也不包括在內，因爲市場仍然相對清淡。雖然指數提供商目前沒有計劃包括來自場外市場或衍生品平台的數據，但指數提供商將考慮IOSCO關於金融基準的原則，以及XLM衍生品交易場所的管理和前述的納入標準在考慮未來是否包括場外或衍生平台數據時。

指數提供商和保薦人已經簽訂了日期爲2022年2月1日的指數許可協議(修訂後的「指數許可協議」)，管理保薦人對指數價格的使用。根據指數許可協議的條款，指數提供商可調整指數價格的計算方法，而無需通知信託或其股東或徵得其同意。如果指數提供商發現或意識到其認爲可能對其業績和/或可靠性產生重大影響的現有方法中以前未知的變量或問題，指數提供商可能決定更改計算方法，以保持指數價格計算的完整性。指數供應商對指數價格的厘定擁有獨家酌情權，並可不時更改指數價格的厘定方法。股東將被告知信託公司當前報告中計算方法或指數價格的任何重大變化，以及保薦人認爲信託定期或當前報告中的所有其他重大變化。贊助商將在諮詢外部法律顧問的基礎上，逐一確定指數價格的任何變化的重要性。

指數提供商可以隨時更改用於計算指數的交易場所或以其他方式更改指數的計算方式。例如，指數提供商已安排季度審查，其中可能會添加或刪除滿足或不符合納入標準的成分交易平台。指數提供商沒有任何義務考慮發起人、信託、股東或與此類變更相關的任何其他人的利益。雖然指數提供商不需要公佈或解釋這些變化或提醒贊助商此類變化，但它歷來會將成分交易平台的任何重大變化通知信託基金，包括成分交易平台的任何添加或刪除，此外還發布與此相關的新聞稿。贊助商將通過提交當前報告通知投資者任何此類重大事件

在8-k表格上。儘管指數方法旨在在沒有任何手動干預的情況下運行，但罕見事件可以證明手動干預是合理的。此類干預是爲了應對與市場無關的事件，例如停止在數字資產交易平台上存入或提取資金、未經宣佈關閉數字資產交易平台上的運營、破產或用戶資金受損。如果有必要進行此類干預，指數提供商將通過其網站、API和其他與客戶建立的溝通渠道發佈公開公告。

該指數對成分交易平台上XLm的價格應用了一種算法，在24小時內按每秒計算。該指數的算法預計將反映從成分交易平台計算指數價格的四管齊下方法：

指數提供商定期重新評估加權算法，但保留根據其定期審查或在極端情況下改變指數價格計算方式的自由裁量權。計算指數價格的確切方法尚未公開。不過指數旨在通過實時貼現個別數字資產交易平台的異常價格波動來限制任何經歷異常活動或流動性有限的個別數字資產交易平台的交易風險或價格扭曲。

贊助商認爲，指數提供商對成分交易平台的選擇過程以及指數價格算法的方法比數字資產交易平台現貨價格的簡單平均值提供了更準確的XLm價格變動情況，並且成分交易平台上XLm價格的權重限制了包含受可能因以下原因而導致的臨時價格混亂影響的數據XLm現貨市場其他地方的技術問題、流動性有限或欺詐活動。通過引用多個交易場所並根據交易活動對其進行加權，贊助商相信任何單一場所發生的任何潛在欺詐、操縱或異常交易活動的影響都會減少。

如果指數價格不可用，或者如果贊助商真誠地確定該指數價格並未反映XLm的準確價格，則贊助商將盡最大努力聯繫指數提供商，以直接從指數提供商獲取指數價格。如果在此類聯繫後，該指數價格仍然不可用或贊助商繼續真誠地相信該指數價格並未反映XLm的準確價格，則贊助商將採用一套級聯規則來確定指數價格，如下所述「-當指數價格不可用時確定指數價格」。

出於運營目的，信託參考指數價格對其XLm進行估值。指數價格是指數所代表的XLm的價值，於下午4：00計算，紐約時間，每個工作日。

爲了說明的目的，下面列出瞭如何利用影響上述方法中加權和調整的屬性來生成數字資產的指數價格的示例。例如，用於計算數字資產指數價格的成分交易平台可能包括Coinbase、Kraken、LMAX Digital和Bitstamp等交易平台。

2022年1月11日，發起人更改了用於確定指數價格的級聯規則集。贊助商使用以下級聯規則集來計算指數價格。爲免生疑問，如果一項或多項具體規則失敗，申辦者將按以下順序依次採用以下規則：

如果出現分叉，指數提供商可能會根據發起人認爲不是信託持有的適當資產的數字資產計算指數價格。在這種情況下，贊助商有充分的自由裁量權使用不同的指數提供商或使用其最佳判斷計算指數價格本身。

贊助商可自行決定選擇不同的指數提供商、選擇指數提供商提供的不同指數價格、使用上述級聯規則集計算指數價格或隨時更改上述級聯規則集。贊助商將在信託的定期或當前報告中提供任何此類變更的通知。

所有聯網的系統都容易受到各種攻擊。與任何計算機網絡一樣，星際網絡也存在某些缺陷。例如，星際網絡上的星際網絡交易由可信驗證者列表進行驗證。所有希望在網絡上進行交易的STELLAR網絡用戶都會通過這些可信的驗證者驗證他們的交易。可從https://stellarbeat.io/.等公共網站訪問驗證器列表該網站的內容不構成本年度報告的一部分。要獲得對驗證者的控制，惡意行爲者必須「超越驗證者的操作安全，例如通過從驗證者員工那裏竊取密碼或進行社會工程攻擊來訪問他們的控制系統。如果惡意行爲者要獲得足夠數量的可信驗證者的控制權，它將有能力操縱Stella Ledger，從而操縱Stella Network。對Stella Network的任何攻擊，如果影響XLM的傳輸能力，都可能對XLM的價格和股票價值產生實質性的不利影響。」

此外，許多數字資產網絡還遭受了多次拒絕服務攻擊，導致區塊創建和數字資產轉移暫時延遲。對Stellar Network進行的任何影響XLm轉讓能力的類似攻擊都可能對XLm的價格和股份價值產生重大不利影響。

恒星網絡上的節點要麼是「觀察者」節點，要麼是驗證節點。觀察者節點接收信息並將信息轉發給其他節點。驗證節點執行與跟蹤節點相同的功能，並通過驗證交易進一步有助於推進Ripple區塊鏈。爲了處理交易，用戶根據交易包含的操作數量支付交易費。大多數驗證者節點是銀行、儲蓄機構、農民合作社、中央銀行和匯款公司等組織。截至2024年9月30日，大約有69個驗證者節點和約96個觀察者節點。

該部門包括私人和專業投資者和投機者的投資和交易活動。從歷史上看，據公開報道，大型金融服務機構參與數字資產投資和交易的程度有限，儘管參與格局正在開始發生變化。目前，與投機者相對廣泛的使用相比，零售和商業市場上數字資產的使用相對有限，而且對數字資產的需求很大一部分是由投機者和投資者產生的，他們尋求從短期或長揸數字資產中獲利。

零售部門包括通過Stellar Network直接發送XLm進行直接點對點XLm交易的用戶。雖然使用比特幣從商業或服務企業購買商品和服務正在發展，但由於XLm處於起步階段，而且XLm的目的與比特幣略有不同，因此尚未以同樣的方式被接受。XLM相對於其他數字資產的主要優勢是其在全球外匯交易中用作中介，但尚未被廣泛採用。截至2024年9月30日，Stellar Network在2024年9月30日之前的30天內促成的每日交易額在約450万美元至約8690万美元之間。作爲參考，比特幣網絡同期的每日交易額約在25亿至126亿美元之間。如果XLM的全球外匯能力沒有得到更廣泛的利用，它可能很難與其他數字資產競爭。

該部門包括提供多種服務的公司，包括XLm的購買、銷售、支付處理和存儲。例如，Coinbase、Bitstamp和Kraken是交易量最大的數字資產交易平台。Coinbase Custody Trust Company，LLC是信託的託管人，是一家數字資產託管人，提供存儲XLM的託管帳戶

爲用戶隨着Stellar Network的接受度不斷提高，預計服務提供商將擴大當前可用的服務範圍，並且更多方將進入Stellar Network的服務行業。

據CoinMarketCap.com追蹤，截至2024年9月30日，自比特幣誕生以來，已有數千種數字資產被開發出來，比特幣是目前最發達的數字資產，因爲它存在的時間長、對支持它的基礎設施的投資以及在交易中使用比特幣的個人和實體的網絡。雖然XLm在其有限的歷史中取得了一些成功，但優秀XLm的總價值小於比特幣和以太幣，並且可能會因其他數字資產的快速發展而黯然失色。Stellar Network和XLm可能面臨Ripple網絡和XRP的競爭。此外，許多其他數字資產也充當智能合約平台，包括以太幣網絡、Solana網絡、Avalanche網絡和Cardano網絡。

一些行業團體還在創建私有的、許可的區塊鏈版本的數字資產技術。例如，摩根大通正在開發一個名爲Onyx的平台，該平台被描述爲一個專爲金融服務行業使用而設計的基於區塊鏈的平台。目前尚不清楚金融機構未來是否會更喜歡不帶數字貨幣的許可區塊鏈而不是Stellar Network和XLm。

隨着數字資產在受歡迎程度和市場規模方面的增長，美國國會和一些美國聯邦和州機構(包括FinCEN、OFAC、美國證券交易委員會、商品期貨交易委員會、金融行業監管局、消費者金融保護局、司法部、國土安全部、聯邦調查局、美國國稅局,貨幣監理署(貨幣監理署、聯邦存款保險公司、聯儲局和州金融機構和證券監管機構)一直在審查數字資產網絡、數字資產用戶和數字資產市場的運作，特別側重於數字資產可在多大程度上被用來清洗非法活動所得收益、逃避制裁或資助犯罪或恐怖分子企業，以及爲用戶持有或託管數字資產的交易平台或其他服務提供商的安全和穩健。其中許多州和聯邦機構都發布了關於數字資產給投資者帶來的風險的消費者建議。此外，聯邦和州機構以及其他國家和國際機構發佈了關於數字資產交易的處理規則或指導意見，或對從事數字資產活動的企業的要求。此外，2022年11月FTX Trading Ltd.(簡稱FTX)的倒閉以及由此引發的市場動盪大大加強了美國和全球的監管審查，並導致美國證券交易委員會和刑事調查、執法行動以及整個數字資產生態系統的其他監管活動。

此外，美國證券交易委員會、美國各州證券監管機構和幾個外國政府已經發出警告並提起法律訴訟，他們在訴訟中辯稱，某些數字資產可能被歸類爲證券，這些數字資產以及任何相關的首次公開發行硬幣或其他一級和二級市場交易都受證券監管。例如，2023年6月，美國證券交易委員會起訴賓納斯和Coinbase，2023年11月，美國證券交易委員會起訴克拉肯，指控它們經營未經註冊的證券交易所、經紀公司和清算機構。美國證券交易委員會在訴狀中聲稱，根據聯邦證券法，幾項數字資產屬於證券。這些訴訟的結果，以及持續和未來的監管行動，對整個數字資產行業和XLM的價格產生了重大不利影響，並可能在很大程度上改變對股票的投資性質和/或信託繼續運營的能力。此外，美國各州和聯邦以及外國監管機構和立法機構已經對虛擬貨幣企業採取了行動，或制定了限制性制度，以應對黑客攻擊、消費者傷害或虛擬貨幣活動引發的犯罪活動所產生的不利宣傳。

2021年8月，美國證券交易委員會主席表示，他認爲使用數字資產交易平台的投資者沒有得到足夠的保護，平台上的活動可能會牽連證券法、大宗商品法和銀行法，提出了一些與保護投資者和消費者、防範非法活動和確保金融穩定有關的問題。這位主席表示，美國證券交易委員會需要有更多的監管機構來防止交易、產品和平台「落入監管裂縫」，並需要更多的資源來保護「這個不斷增長和動盪的行業」的投資者。這位主席呼籲以數字資產交易、貸款和分散的金融平台爲中心的聯邦立法，尋求「額外的全體權力」來制定數字資產交易和貸款的規則。然而，這位主席隨後表示，根據現有法律，美國證券交易委員會已經擁有監管數字資產行業的明確權力，2023年上半年針對數字資產交易平台提起了幾起執法行動。特別是，2023年6月，美國證券交易委員會對全球最大的兩個數字資產交易平台Binance和Coinbase提起執法行動，指控它們經營未經註冊的證券交易所、券商和清算機構。

美國證券交易委員會已採取措施將其現有當局解釋爲涵蓋各種數字資產活動。例如，美國證券交易委員會最近還提議對《投資顧問法》第206（4）-2條下的託管規則進行修改。擬議的規則變更將修改規則206（4）-2（d）（6）下「合格託管人」的定義，並擴大規則206（4）-2下的當前託管規則，以涵蓋數字資產和相關諮詢活動。如果按提議頒佈，這些規則可能會實施額外的監管

關於數字資產保管和儲存的要求，並可能導致對更廣泛的數字資產生態系統進行額外的監管監督。美國的新政府和新國會也有可能提出與數字資產相關的新法律和法規。見“第1A項。風險因素-與數字資產、信託和股票監管相關的風險因素-美國國會或任何美國聯邦或州機構的監管變更或行動可能會影響股票的價值或限制XLM的使用，以對股票價值產生不利影響的方式驗證星光網絡或數字資產交易平台市場的活動或運營，“項目1A。風險因素-與數字資產、信託和股票監管相關的風險因素-確定XLM或任何其他數字資產是「證券」可能對XLM的價值和股票價值產生不利影響，並可能導致信託和「A」項的潛在非常、非經常性支出或終止。風險因素-與數字資產監管、信託和股份相關的風險因素-美國證券交易委員會政策的變化可能會對股份價值產生不利影響。

各個外國司法管轄區已經並可能在不久的將來繼續通過影響數字資產網絡、數字資產市場及其用戶的法律、法規或指令，特別是屬於此類司法管轄區監管範圍內的數字資產交易平台和服務提供商。例如：

外國政府未來在數字資產和數字資產交易平台監管方面的行動仍存在重大不確定性。此類法律、法規或指令可能與美國的法律、法規或指令相沖突，並可能對美國境外用戶、商戶和服務提供商對XLm的接受產生負面影響，因此可能阻礙Stellar Lumens生態系統在美國和全球的增長或可持續性，或以其他方式對信託持有的XLm的價值產生負面影響。未來任何監管變化對信託或信託持有的XLm的影響都無法預測，但此類變化可能是重大的，並且對信託和股份的價值不利。

請參閱「項目1A。風險因素-與數字資產、信託和股票監管相關的風險因素-美國國會或任何美國聯邦或州機構的監管變化或行動可能會影響股票的價值或限制XLm的使用、驗證活動或運營恒星網絡或數字資產市場的方式，從而對股票的價值產生不利影響。」

該信託是特拉華州法定信託，於2018年10月26日根據特拉華州法定信託法（「DSTA」）的規定向特拉華州國務卿提交信託證書而成立。2019年1月11日，該信託根據DSTA的規定向特拉華州國務卿提交了信託證書修訂證書，將其名稱從Stellar Lumens Investment Trust更改爲Grayscale Stellar Lumens Trust（XLM）。該信託根據信託協議運作。

該等股份代表信託的部分未分割受益權益和所有權單位。該信託是被動的，不像公司或主動投資工具那樣進行管理。信託的XLm由託管人代表信託持有。僅在以下情況下，信託的XLm才會從數字資產帳戶中轉出：（i）轉移以支付發起人費用或任何額外信託費用，（ii）根據需要出售以支付額外信託費用或（iii）在信託終止並清算其資產或法律或法規另有要求的情況下代表信託出售。假設就美國聯邦所得稅而言，該信託被視爲授予人信託，則信託爲支付發起人費用或任何額外信託費用而交付或出售XLm將是股東的應稅事件。請參閱「-美國某些聯邦所得稅後果-對美國持有者的稅收後果」。

該信託基金並非根據《投資公司法》註冊的投資公司，保薦人認爲該信託基金不需要根據《投資公司法》註冊。該信託不會在任何期貨交易所交易、買賣或持有XLM衍生品，包括XLM期貨合約。該信託公司僅被授權立即接受實際的XLm交付。保薦人認爲，根據現行法律、法規和解釋，CFTC不需要根據CEA將該信託的活動作爲一個「商品池」進行監管。該信託不會由CFTC監管的大宗商品池運營商運營，因爲它不會在任何期貨交易所交易、買賣或持有XLM衍生品，包括XLM期貨合約。該信託基金的投資者將不會得到監管商品池中的投資者的監管保護，紐約商品期貨交易所的COMEX部門或任何期貨交易所也不會執行其關於該信託基金活動的規則。此外，信託基金的投資者將不會受益於受監管期貨交易所爲XLM期貨合約投資者提供的保護。

該信託基金不時地創建股票，但僅限於籃子中。一籃子股票相當於一塊100股。由於籃子的創建，流通股的數量預計會不時增加。創建籃子將需要將所創建的籃子所代表的XLM量交付給Trust。創建貨幣籃子的條件是向信託交付所創建的每個貨幣籃子所代表的全部和部分XLM的金額，其數量是通過以下方式確定的：(X)在扣除代表信託應計但未支付的費用和支出的美元價值的XLM金額(使用當時的指數價格轉換)後，除以(X)信託在紐約時間下午4：00擁有的XLM金額。並進位到小數點後第八位)乘以(Y)當時已發行的股份數量(這樣獲得的商數計算爲十億分之一XLm(即進位到小數點後第八位))，並將該商數乘以100。

雖然信託協議對贖回股份作出了規定，但目前不允許贖回股份，信託公司目前也不實施贖回計劃。在獲得美國證券交易委員會的監管批准和保薦人自行決定批准的情況下，信託未來可以實施贖回計劃。然而，由於保薦人不相信美國證券交易委員會會在此時受理豁免規則的申請，以運營正在進行的贖回計劃，保薦人目前無意尋求美國證券交易委員會的監管批准，以運營正在進行的贖回計劃。即使將來尋求這種救濟，也不能保證何時給予這種救濟，或者是否會給予這種救濟。如果該等寬免獲得批准，而保薦人批准贖回計劃，則該等股份將可根據信託協議及相關參與者協議的規定贖回。雖然保薦人無法確切地預測贖回計劃的實施將對股票的交易價格產生什麼影響(如果有的話)，但這將允許授權參與者利用當股票的市場價值偏離信託的XLM價值時產生的套戥機會，減去信託的費用和其他負債，這可能會降低股票在OTCQX交易時相對於該價值的溢價，或導致股票以低於該價值的價格交易，這有時是相當大的。

截至2024年9月30日，每股約相當於86.4588股XLM。初始籃子中的每一股代表大約100 XLm。由於轉讓或出售信託的XLM以支付保薦人的費用和任何額外的信託支出，創建一籃子貨幣所需的XLM金額預計將繼續隨着時間的推移而逐漸減少。除非在解散時，否則信託不會接受或分配現金以換取籃子。授權參與者只能在根據證券法豁免註冊的交易中向其他投資者出售他們從信託購買的股票。關於與無法獲得贖回計劃有關的風險的討論，見「項目1A」。風險因素-與信託和股份有關的風險因素-由於根據規則144的持有期，缺乏持續的贖回計劃，以及信託有能力不時停止創建，因此沒有套戥機制來保持股票的價值與指數價格密切相關，並且股票的交易歷史上一直大幅溢價或大幅折讓每股資產淨值。以及“第1A項。風險因素-與信託和股份有關的風險因素--轉讓和贖回的限制可能會導致股份價值的損失。

贊助商將在每個工作日下午4：00確定信託的資產淨值，紐約時間，或在可行的情況下儘快在此後進行。發起人還將確定每股資產淨值，等於資產淨值除以已發行股份數量。每個工作日，在贊助商確定信託的資產淨值和每股資產淨值後，贊助商將盡快在信託網站www.grayscale.com/Crypto-products/grayscale-stellar-Lumens-trust/上發佈信託的資產淨值和每股資產淨值。見“—XLm的估值和資產淨值的確定。”

信託的資產僅包括XLM、附帶權利、IR虛擬貨幣、出售XLM所得款項、附帶權利及IR虛擬貨幣，以待使用該等現金支付額外信託開支或向股東分派，以及信託根據信託協議以外的任何協議(信託協議除外)享有的任何信託權利。每股股份代表按XLM參考指數價格厘定的已發行股份總數計算的信託各項資產減去信託開支及其他負債(包括應計但未支付的費用及開支)的比例權益。發起人預計，股票的市場價格將隨着時間的推移而波動，以回應XLM的市場價格。此外，由於股票反映了信託估計的應計但未支付的費用，隨着信託的XLM被用來支付信託的費用，由份額代表的XLM的金額將隨着時間的推移而逐漸減少。信託預計不會將其可能持有的任何附帶權利或IR虛擬貨幣考慮在內，以確定信託的資產淨值或每股資產淨值。

XLm定價信息可從各種金融信息服務提供商或CoinMarketCap.com等Stellar Network信息網站24小時獲取。現貨價格和買賣價差也可以直接從數字資產交易平台獲取。截至2024年9月30日，該指數的組成數字資產交易平台爲Coinbase、Bitstamp和Kraken。指數提供商未來可能會自行決定將數字資產交易平台刪除或添加到指數中。股份的市場價格將從各種來源獲取，包括經紀公司、信息網站和其他信息服務提供商。此外，信託網站將在每個工作日提供股份的定價信息。

該信託的發起人是Grayscale Investments，LLC，這是一家特拉華州有限責任公司，成立於2013年5月29日，也是Digital Currency Group，Inc的全資子公司。（「DCG」）。贊助商的主要營業地點爲290 Harbor Drive，4日 Floor，Stamford，Connecticut 06902，電話號碼爲（212）668-1427。根據《特拉華有限責任公司法》和申辦者的管理文件，DCG（申辦者的唯一成員）不僅因是申辦者的唯一成員而對申辦者的債務、義務和責任負責。

發起人既不是在SEC註冊的投資顧問，也不是在CFTC註冊的商品池運營商，並且不會以任何一種身份就信託行事，並且發起人向信託提供的服務將不受投資顧問法或CFA的約束。

發起人安排設立信託並在OTCQX上報價股份。作爲從信託收到贊助商費用的部分對價，贊助商有義務支付贊助商支付的費用。發起人還支付了信託組織的費用和股份的初始出售費用。

根據信託協議的規定，保薦人一般負責信託的日常管理。這包括(I)代表信託爲投資者準備和提供定期報告和財務報表，(Ii)處理訂單以創建籃子，並與託管人和轉讓代理協調此類訂單的處理，(Iii)計算和公佈每個營業日截至紐約時間下午4點的信託資產淨值和每股資產淨值，或在可行的情況下儘快計算和公佈資產淨值，(Iv)選擇和監測信託的服務提供商，並不時聘請額外的、後續或替代的服務提供商，(V)指示託管人轉讓信託的XLM，根據需要支付保薦人的費用和任何額外的信託費用，(Vi)在信託解散時，將信託剩餘的XLM、附帶權利和IR虛擬貨幣或出售這些貨幣的現金收益分配給股票記錄的所有者和(Vii)建立美國公認會計准則估值的主要市場。此外，如果星形網絡中存在分支，並且在分支產生的哪個網絡是星形網絡的問題上存在爭議，贊助商有權選擇其善意地認爲是星形網絡的網絡，除非這種選擇或授權與信託協議相沖突。

發起人不儲存、持有或維持信託XLm的保管或控制權，而是與保管人簽訂了保管協議，以促進信託XLm的安全。

如果在轉讓時繼任者承擔了信託協議項下贊助商的所有義務，則贊助商可以將其全部或幾乎全部資產轉讓給開展贊助商業務的實體。在這種情況下，贊助商將被免除信託協議項下的所有進一步責任。

贊助商費用由信託向贊助商支付，作爲根據信託協議提供服務的補償，以及贊助商同意支付贊助商支付費用的部分對價。請參閱「-費用; XLm的銷售。」

贊助商可自行決定選擇不同的指數提供商，選擇指數提供商提供的不同指數價格，使用「-XLm行業概覽」中規定的一組級聯規則計算指數價格

市場-XLm價值-指數和指數價格-指數價格的確定當指數價格不可用時，或隨時更改上面規定的級聯規則集。

贊助商已於2022年10月3日簽訂分銷和營銷協議與Grayscale Securities，LLC（特拉華州有限責任公司）簽訂的（「分銷和營銷協議」），（「Grayscale Securities」），發起人的全資子公司，也是信託的附屬公司和關聯方，協助發起人分配股份，爲信託制定持續營銷計劃，準備有關股份的營銷材料，包括信託網站上的內容，並執行信託的營銷計劃。

2022年10月3日，就與Grayscale Securities簽訂分銷和營銷協議而言，發起人和Genesis Global Trading，Inc.（「Genesis」）同意終止發起人、信託和Genesis之間於2019年11月15日達成的分銷和營銷協議，根據該協議，Genesis協助發起人分銷股份，詳情請參閱「-授權參與者」。因此，自2022年10月3日起，Genesis不再擔任信託股份的分銷商和營銷商。

保薦人已經與指數提供商CoinDesk Indices，Inc.簽訂了指數許可協議，管理保薦人使用指數計算指數價格。指數提供者可調整指數的計算方法，而無需通知信託或其股東，或未經信託或其股東同意。根據指數許可協議，保薦人向指數提供商支付月費和基於信託資產淨值的費用，作爲其向指數相關知識產權保薦人發放許可證的代價。指數許可協議的初始期限爲2022年2月1日至2024年2月29日晚些時候，以及根據指數許可協議簽署的任何訂單上規定的最晚日期。2023年6月20日，贊助商和指數提供商簽署了一項對指數許可協議的修正案，將指數許可協議的初始期限從2024年2月29日延長至2025年2月28日。此後，索引許可協議將每年自動續訂，除非提供了不續訂的通知。如果重大違約事件在首次書面通知違約後30天內仍未治癒，則任何一方均可在書面通知後終止Index許可協議。此外，在某些情況下，任何一方在接到通知後可立即終止指數許可協議，包括與另一方(I)無力償債、破產或類似事件或(Ii)違反對任何一方在指數許可協議下的履行能力產生重大不利影響的資金傳輸、稅收或交易規定有關的情況。

CSC特拉華信託公司（原名特拉華信託公司）根據信託協議擔任信託的特拉華受託人。受託人的主要辦事處位於特拉華州威爾明頓Little Falls Drive 251號，19808。受託人與贊助商無關。信託協議副本可在上述發起人主要辦事處查閱。

受託人被委任爲特拉華州信託的受託人，唯一目的是爲了滿足DSTA第3807(A)條的要求，即信託至少有一名受託人的主要營業地點在特拉華州。受託人的職責將限於(I)接受送達特拉華州信託的法律程序，以及(Ii)執行特拉華州受託人根據DSTA必須向特拉華州國務卿提交的任何證書的執行。在法律或衡平法上，受託人對信託或股東負有責任(包括受託責任)及其相關責任的範圍內，該等責任及責任將由信託協議明文規定的受託人責任及法律責任取代。受託人將沒有義務監督保薦人、轉讓代理、託管人或任何其他人的作爲或不作爲，也不承擔任何責任。

受託人（無論是作爲受託人還是以個人身份）以及受託人的任何董事、高級管理人員或控制人員都不是股份發行人的發行人、董事、高級管理人員或控制人員，也不承擔任何責任。受託人與發行和銷售股份有關的責任僅限於信託協議中規定的受託人的明確義務。

受託人尚未準備或核實本年度報告或就股份出售或轉讓而發佈或交付的任何其他文件中的任何信息、披露或其他陳述，並且不會對這些信息、披露或其他陳述負責或承擔任何責任。信託協議規定，受託人對任何XLm或信託其他資產的真實性、可轉讓性、可收回性、價值、充足性、地點或存在不承擔任何責任。請參閱「-信託協議描述」。

受託人可以在至少提前180天通知信託後辭職。受託人將獲得發起人的賠償，並由發起人和信託承擔其與信託的成立、運營或終止或根據信託協議履行其職責有關或產生的任何費用，除非該費用是由於受託人的重大疏忽、故意不當行爲或惡意造成的。發起人有權酌情更換受託人。

大陸股票轉讓與信託公司是一家特拉華州公司，根據轉讓代理和服務協議的條款和規定擔任信託的轉讓代理。轉讓代理的主要辦事處位於1 State Street，30 th Floor，New York，New York 10004。轉讓代理和服務協議副本可在此處指定的申辦者主要辦事處查閱。

轉讓代理主要以簿記形式持有股份。發起人指示轉讓代理將創建籃子的數量記入授權參與者所代表的投資者手中。轉會代理將發放創作籃。轉讓代理還將協助準備股東帳戶和稅務報表。

贊助商將向轉讓代理人進行賠償並使其免受損害，並且轉讓代理人不會因善意拒絕進行其認爲不當或未經授權的轉讓而承擔任何責任。

授權參與者必須與贊助商和信託簽訂「參與者協議」，以管理其創建籃子的訂單的下達。參與者協議規定了創建Baskets和交付創建所需XLm的程序。參與者協議格式的副本可在此處指定的申辦者主要辦事處查閱。

每位授權參與者必須（i）是註冊經紀交易商，（ii）與申辦者簽訂參與者協議，並且（iii）擁有一個XLm錢包地址，託管人已知該地址屬於授權參與者或其他參與採購數字資產的實體（任何此類代表，「流動性提供者」）。當前授權參與者的名單可從贊助商處獲取。2022年10月3日之前，DCG的註冊經紀交易商和全資子公司Genesis（以該身份稱爲「授權參與者」）是唯一的授權參與者，並且是與發起人和信託簽訂的參與者協議的一方。

自2022年10月3日起，發起人與Grayscale Securities簽訂了一份參與者協議，根據該協議，Grayscale Securities同意擔任信託的授權參與者，並終止了其與Genesis於2019年1月11日簽訂的參與者協議，該協議提供了股份創設程序。因此，自2022年10月3日以來，Genesis不再擔任該信託的授權參與者，但從2022年10月3日至2023年9月12日擔任Grayscale Securities的流動性提供者。

截至本年度報告之日，Grayscale Securities是唯一的代理授權參與者。贊助商打算在未來聘請更多與信託無關的授權參與者。

任何授權參與者對發起人或信託沒有任何義務或責任進行股份的任何銷售或轉售。

Coinbase Trusty Company，LLC是《紐約銀行法》第100條規定的受託人，也是《投資顧問法》第206（4）-2（d）（6）條規定的合格託管人。根據信託協議並根據託管協議的條款和規定，託管人被授權擔任信託的託管人。託管人的主要辦公室位於200 Park Avenue South，Suite 1208，New York，New York 10003。託管協議副本可在此處指定的申辦者主要辦事處查閱。

根據託管人協議，託管人控制並保護信託的「數字資產帳戶」，這是一個用於存儲私人密鑰的獨立託管帳戶，允許代表信託轉讓信託XLm的所有權或控制權。託管人的服務（i）允許XLm從公共區塊鏈地址存入信託的數字資產帳戶，以及（ii）允許信託或贊助商從信託的數字資產帳戶提取XLm到信託或贊助商控制的公共區塊鏈地址（「託管服務」）。數字資產帳戶使用離線存儲或「冷」存儲機制來保護信託的私有密鑰。「冷存儲」一詞是指一種保護方法，通過該方法，與數字資產對應的私有密鑰從互聯網上斷開和/或完全刪除。

託管人將從信託的數字資產帳戶中提取支付信託費用所需的XLm金額。

根據託管協議，託管人和信託均同意就任何第三方索賠或第三方要求向另一方進行賠償並使其免受損害（包括合理且有記錄的律師費以及任何監管機構施加的任何罰款、費用或處罰）因託管人或信託（視情況而定）違反託管人協議而產生或相關，託管人或信託（視情況而定）在託管協議中的任何陳述或保證不準確，或信託違反或託管人明知違反任何法律、規則或法規，或任何第三方的權利，除非此類索賠直接由另一方的重大疏忽、欺詐或故意不當行爲造成。此外，信託已同意就信託放棄的任何附帶權利或IR虛擬貨幣以及與之相關或由此產生的任何稅務責任向託管人進行賠償。

託管人及其附屬公司可能不時爲其自己的帳戶以及作爲客戶的代理人購買或出售XLm或爲其自己的帳戶購買或出售股份。儘管有上述規定，數字資產帳戶中的XLm不被視爲託管人的一般資產，並且不能與託管人持有的任何其他數字資產混合。託管人代表信託擔任受託人和託管人，數字資產帳戶中的XLm被視爲信託資產，始終屬於信託的財產。

每一個日曆年，發起人或信託可以要求託管人提交一份由正式授權官員簽署的證書，以證明託管人在託管協議中做出的所有陳述和保證在該證書之日起均真實正確，並且在上一年內均真實正確。此外，託管人已同意允許信託和贊助商採取任何必要措施，以驗證令人滿意的內部控制系統和程序是否到位，並訪問和檢查託管人硬幣所在的系統。

如果託管人辭去託管人職務，發起人可以任命額外或替代託管人，並代表信託與該託管人簽訂託管協議。此外，發起人和信託可以隨時使用XLm託管服務或Coinbase Custody Trust Company，LLC以外的實體提供的類似服務，而無需事先通知Coinbase Custody Trust Company，LLC。

數字資產和數字資產交易在區塊鏈（數字資產網絡的公共交易分類帳）上記錄和驗證。每個數字資產區塊鏈都充當此類數字資產所有單元的所有權記錄，即使是在某些保護隱私的數字資產的情況下，交易本身不可公開查看。區塊鏈上記錄的所有數字資產都與公共區塊鏈地址（也稱爲數字錢包）關聯。可以使用相應的私有密鑰訪問和轉移特定公共區塊鏈地址持有的數字資產。

公共地址及其相應的私人密鑰由託管人在法拉第籠內的安全位置的祕密密鑰生成儀式中生成，法拉第籠是用於阻擋電磁場的外殼，從而減輕攻擊。託管人使用量子隨機數生成器來生成公鑰和公鑰對。

一旦生成，私密密鑰就會被加密，分成「碎片」，然後進一步加密。密鑰生成儀式結束後，所有用於生成私有密鑰的材料，包括計算機，都將被銷燬。所有關鍵世代儀式均離線進行。除託管人外，任何一方都無權訪問信託的私人密鑰碎片，包括信託本身。

私密密鑰碎片按地理位置分佈在世界各地（包括美國）的安全金庫中。安全金庫的位置可能會定期更改，並出於安全目的由保管人保密。

數字資產帳戶使用脫機存儲或「冷存儲」機制來保護信託的私鑰。術語冷存儲是指一種保護方法，通過該方法，對應於數字資產的私鑰從互聯網斷開連接和/或完全刪除。私鑰的冷存儲可以包括將這樣的密鑰保存在非聯網(或氣隙)的計算機或電子設備上，或者將私鑰存儲在存儲設備(例如，USB拇指驅動器)或打印介質(例如，紙莎草紙、紙或金屬物體)上。數字錢包可以接收數字資產的存款，但在沒有使用數字資產的相應私鑰的情況下不可以發送數字資產。爲了從其中將私鑰保存在冷存儲器中的數字錢包發送數字資產，要麼必須從冷存儲器中檢索私鑰並將其輸入到在線的或熱的數字資產軟件程序中以對交易進行簽名，要麼必須將未簽名的交易傳送到COLD服務器，在冷服務器中私鑰被保持以供私鑰簽名，然後被傳送回在線數字資產軟件程序。在這一點上，數字錢包的用戶可以轉移其數字資產。

根據託管協議的條款和規定，託管人是信託私人鑰匙的託管人。從數字資產帳戶轉移需要某些安全程序，包括但不限於多個加密的私人密鑰碎片、用戶名、密碼和兩步驗證。託管人持有的多個私人密鑰碎片必須組合起來重新構建私人密鑰，以簽署任何交易，以轉移信託的資產。私密密鑰碎片按地理位置分佈在世界各地（包括美國）的安全金庫中。

因此，如果任何一個安全金庫遭到破壞，該事件將不會對信託訪問其資產的能力產生任何影響，除了可能導致操作延遲外，而是使用一個或多個其他安全金庫。這些安全程序旨在消除信託資產保護中的單點故障。

一旦在區塊鏈上處理，信託即可使用XLm到數字資產帳戶的轉移。

在獲得監管機構批准運營贖回計劃並獲得贊助商的授權後，授權參與者從信託中訪問和撤回XLm以贖回籃子的過程將遵循與授權參與者將XLm轉移到信託以創建籃子相同的一般程序，只是相反。請參閱「-創建股份的描述」。

2022年10月3日之前，Genesis爲該股份的分銷商和營銷商。自2022年10月3日起，Grayscale Securities擔任股份的分銷商和營銷商，Genesis不再擔任信託股份的分銷商和營銷商。Grayscale Securities是美國證券交易委員會的註冊經紀交易商，也是FINRA的成員。

Grayscale Securities以分銷商和營銷商的身份協助發起人爲信託制定持續營銷計劃;準備有關股份的營銷材料，包括信託網站www. grayscale. com/Crypto-products/grayscale-stellar-Lumens-trust上的內容;並執行信託的營銷計劃。Grayscale Securities是贊助商的附屬公司。

贊助商已與Grayscale Securities簽訂分銷和營銷協議。贊助商未來可能會聘請更多或繼任分銷商和營銷人員。

信託根據信託協議授權創建和發行無限數量的股份。與創作相關的股票將僅以籃子形式發行（一籃子等於100股）。該等股份代表信託的部分未分割受益權益和所有權單位，沒有面值。該股份在OTCQX上以代碼「GXLm」報價。

該等股份並不代表傳統投資，不應被視爲類似於經營具有管理層和董事會的商業企業的公司的「股份」。股東將不擁有通常與公司股份所有權相關的法定權利。每股股份可轉讓、已繳足且不可評估，並賦予持有人就股東根據信託協議可以投票的有限事項進行投票的權利。例如，股東無權選舉或罷免董事，也不會獲得股息。股份並不賦予其持有人任何兌換權或優先購買權，或者（除下文討論外）任何贖回權或分配權。

股東不參與信託的管理或控制。根據信託協議，股東的投票權有限。例如，如果發起人退出，大多數股東可以選舉並任命繼任發起人來處理信託事務。此外，未經至少多數（50%以上）股份（不包括髮起人或其關聯公司持有的任何股份）投票，不得對信託協議做出對股東利益產生重大不利影響的修訂。然而，發起人可以在未經股東同意的情況下自行決定對信託協議做出任何其他修改，前提是發起人提前20天通知任何此類修改。

根據信託協議的條款，信託可以以現金或實物方式對股份進行分配，包括以信託爲便利其股東獲得任何附帶權利或IR虛擬貨幣所需或允許的形式進行分配。

此外，如果信託被終止並清算，發起人將向股東分配在償還信託所有未償負債並建立適用稅收、其他政府費用和或有或未來負債準備金後剩餘清算的任何現金收益（由發起人決定）。請參閱「-信託協議描述-信託終止」。在轉讓代理確定的分配記錄日期記錄在冊的股東將有權獲得其按比例分配的份額。

根據信託協議的條款，股東持有股份將被視爲同意發起人可促使信託任命代理人（任何以該身份被任命的人，「代理人」）代表他們就附帶權利的任何分發和/或或IR虛擬貨幣，如果發起人真誠地確定此類任命是合理必要的或符合信託和股東的最佳利益促進任何附帶權利和/或IR虛擬貨幣的分發。發起人可促使信託任命Grayscale Investments，LLC（非以發起人身份行事）或其任何附屬公司以此類身份行事。

任何被指定促進附帶權利和/或IR虛擬貨幣分發的代理人將代表與此類分發有關的記錄股東收到附帶權利和/或IR虛擬貨幣的實物分發，並且在收到此類分發後，將全權酌情決定，無需信託或作爲信託贊助人的贊助人的任何指示，是否以及何時代表記錄日期股東出售已分配的附帶權利和/或IR虛擬貨幣。如果代理商能夠這樣做，它將將現金收益匯給記錄日期的股東。無法保證代理人可能實現的任何附帶權利和/或IR虛擬貨幣的價格，並且在代理人進行任何銷售後，附帶權利和/或IR虛擬貨幣的價值可能會增加或減少。

根據信託協議指定的任何代理人將不會因其作爲代理人的角色而獲得任何補償。然而，任何代理人都有權從記錄日期股東處從分配的附帶權利和/或IR虛擬貨幣中獲得一定數量的附帶權利和/或IR虛擬貨幣，其公平市場價值總額等於代理人因其作爲記錄日期股東代理人的活動而發生的行政和其他合理費用金額，包括代理商與此類附帶權利和/或IR虛擬貨幣的任何分銷後銷售相關的費用。

發起人目前預計將促使信託任命Grayscale Investments，LLC（非以發起人身份行事）作爲代理人，以促進向股東分發附帶權利和/或IR虛擬貨幣。信託無權從記錄日期股東、其代理人或任何其他人那裏接收有關任何已分配的附帶權利和/或IR虛擬貨幣或其處置的任何信息。

信託在發起人確定的時間和期限內創建股份，但僅限一個或多個整籃子。一籃子等於100股。截至2024年9月30日，每股股份約爲86.4588 XLm。請參閱「-創建股份的描述」。創建籃子需要向信託交付以創建前一股股份代表的XLm金額乘以100。信託基金可能會出於各種原因，包括與叉子、空投和其他類似事件有關，不時停止創作，包括延長一段時間。

目前不允許贖回股份，信託也無法贖回股份。在收到美國證券交易委員會的監管批准並獲得贊助商自行決定的批准後，信託未來可以實施贖回計劃。然而，由於發起人認爲SEC目前不會受理豁免運營持續贖回計劃所需規則的申請，因此發起人目前無意向SEC尋求監管機構批准信託運營持續贖回計劃。

即使將來尋求此類救濟，也無法保證此類救濟的時間或將給予此類救濟。如果授予此類救濟並且發起人批准贖回計劃，則股份只能根據信託協議和相關參與者協議的條款贖回。請參閱“項目1A。風險因素-與信託和股票相關的風險因素-由於第144條規定的持有期、缺乏持續的贖回計劃以及信託能夠不時停止創建，因此沒有套戥機制來保持股票的價值與指數密切相關

價格和股份歷來以每股資產淨值大幅溢價或大幅折扣的價格交易，”「第1A項。風險因素-與信託和股票相關的風險因素-由於OTCQX和數字資產交易平台市場之間的非當前交易時間，股票的交易價格可能等於、高於或低於信託每股資產淨值」和「第1A項。風險因素-與信託和股份相關的風險因素-轉讓和贖回的限制可能會導致股份價值損失。」

在私募中購買的股份是限制性證券，不得轉售，除非是根據《證券法》和州證券法豁免登記的交易，並且任何此類交易必須得到發起人的批准。在確定是否授予批准時，發起人將特別考慮是否滿足《證券法》第144條和任何其他適用法律的條件。未經發起人全權決定批准而出售股份的任何嘗試均無效從頭算.

根據第144條，從信託購買的所有股份至少有六個月的持有期。

信託每兩週彙總信託非關聯公司在規則144下所持有的必要持有期內的股份，以評估是否可以刪除規則144轉讓限制說明。任何符合刪除第144條轉讓限制說明的股份都將提交給外部律師，外部律師可以指示轉讓代理從股份中刪除轉讓限制說明，允許股份隨後不受限制地轉售，包括在OTCQX美國頂級市場上轉售。外部律師要求做出某些陳述，前提是：

此外，由於信託協議禁止未經發起人事先書面同意轉讓或出售股份，因此發起人必須提供書面同意，明確表示其不可撤銷地同意股份的轉讓和轉售。一旦股份中的轉讓限制說明被刪除，並且發起人已就該股份的轉讓提供書面同意，該特定股份的未來轉讓無需獲得發起人的同意。

股份主要由轉讓代理以簿記形式持有。贊助商或其代表將指示轉讓代理將創建籃子的數量記入適用的授權參與者。轉會代理將發放創作籃。轉讓將按照證券行業的標準做法進行。發起人可自行決定在有限情況下促使信託以證書形式發行股份。

發起人可自行決定指示轉讓代理宣佈對已發行股份數量進行拆分或反向拆分，並對構成籃子的股份數量做出相應改變。例如，如果發起人認爲二級市場上的每股股票價格上漲或下跌超出了理想的交易價格範圍，則可以宣佈分拆或反向分拆。

以下是對信託文件重要條款的描述，因爲它們涉及通過私募交易中的銷售定期創建信託股份，免受《證券法》的登記要求。

信託文件還規定了贖回股份的程序。然而，該信託目前不實施贖回計劃，且股份目前不可贖回。在收到美國證券交易委員會的監管批准並獲得贊助商自行決定的批准後，信託未來可以實施贖回計劃。

由於發起人認爲SEC目前不會受理豁免運營持續贖回計劃所需規則的申請，因此發起人目前無意向SEC尋求監管機構批准信託運營持續贖回計劃。

信託將不時向授權參與者發行股票，但僅限於一個或多個籃子(一個籃子是100股的一組)。信託不會發行籃子中的一小部分。創建籃子的條件是向信託交付或由信託分配每一籃子所代表的全部和部分XLM的金額，這是通過以下方式確定的：(X)在創建訂單的交易日下午4點，信託擁有的XLM的金額，減去代表信託應計但未支付的費用和支出的美元價值的XLM金額(使用當時的指數價格轉換，並進位到小數點後第八位)，除以(Y)當時已發行的股份數目(所得的商計算爲十億分之一XLm(即進位到小數點後第八位))，並將該商數乘以100(「籃子數量」)。所有關於籃子金額計算的問題將由贊助商最終決定，並將是最終的，並對所有對信託感興趣的人具有約束力。籃子數量乘以正在創建的籃子數量是「總籃子數量」。隨着信託的XLM被用來支付信託的費用，由份額代表的XLM的金額將隨着時間的推移而逐漸減少。截至2024年9月30日，每股約相當於86.4588股XLm。關於每一股代表的XLm金額的信息每天都會發布在信託公司的網站上，網址是www.grayscale.com/crypto-products/grayscale-stellar-lumens-trust/.

授權參與者是唯一可以下訂單創建籃子的人。每位授權參與者必須（i）是註冊經紀交易商，（ii）與贊助商簽訂參與者協議，以及（iii）擁有一個被託管人認定爲屬於授權參與者或流動性提供者的XLm錢包地址。授權參與者可以爲其自己的帳戶行事，也可以作爲與授權參與者簽訂認購協議的投資者（每個此類投資者，「投資者」）的代理人行事。與授權參與者簽訂認購協議的投資者通過提交購買訂單並向授權參與者支付認購金額（美元或XLm）來認購股份。

投資者可以現金或XLM支付認購金額。如果投資者以現金支付認購金額，授權參與者或流動資金提供者在數字資產市場購買XLM，或在授權參與者或流動資金提供者已經持有XLM的情況下，授權參與者或流動資金提供者可將該XLM貢獻給信託。取決於投資者是在下午4：00之前還是之後將現金電匯給授權參與者在紐約時間，投資者的股票將基於同一或下一個營業日的資產淨值創建，在此期間XLM的任何價格波動的風險將由授權參與者或流動性提供商承擔。授權參與者將獲得信託基金的股份，然後這些股份將登記在投資者的名下。如果投資者以XLM支付認購金額，投資者將把該XLM轉讓給授權參與者或流動資金提供者，後者將以實物形式將該XLM捐贈給信託，並獲得信託的股份，然後這些股份將登記在投資者的名下。爲免生疑問，在任何一種情況下，獲授權參與者或流動資金提供者將就XLM對信託基金的出資以換取股份作爲投資者的代理。

參與者協議規定了創建籃子以及交付此類創建所需的全部和部分XLm的程序。贊助商和相關授權參與者可以修改參與者協議及其所附的相關程序。根據參與者協議，申辦者同意就某些責任向每位授權參與者賠償，包括證券法下的責任。

授權參與者不會就Baskets的創建向信託支付交易費，但可能會支付與Stellar Network驗證XLm轉讓相關的交易費。將XLm存入信託以換取Baskets的授權參與者或流動性提供者不會從發起人或信託獲得任何費用、佣金或其他形式的補償或任何形式的引誘，並且該人員對發起人或信託沒有任何義務或責任來實現任何股份的銷售或轉售。

以下對Baskets創建程序的描述僅爲摘要，股東應參閱信託協議的相關條款和參與者協議的形式了解更多詳細信息。

在任何工作日，授權參與者可以在下午4：00之前向贊助商發出創建訂單，向信託訂購一個或多個創建籃，紐約時間，贊助商將接受或拒絕。通過下達創建命令，

授權參與者同意將總籃子金額從託管人已知屬於授權參與者或流動性提供商的XLm錢包地址轉移到數字資產帳戶。

所有創建訂單均由發起人在下達相關創建訂單的工作日接受（或拒絕）。如果接受創建訂單，贊助商將在同一工作日（即交易日）計算總籃子金額，並將總籃子金額傳達給授權參與者。授權參與者或流動性提供者必須不遲於下午6：00將總籃子金額轉移至信託，紐約時間，交易日。XLm的交付、所有權和分配的費用和風險將完全由授權參與者或流動性提供者承擔，直到信託收到該XLm。

託管人收到總籃子金額後，轉讓代理將不遲於下午6：00將股份數量記入授權參與者所代表的投資者的帳戶，紐約時間，交易日。授權參與者隨後可以將股份直接轉讓給相關投資者。

在轉讓代理的轉讓賬簿關閉的任何期間，或者如果發起人或其代表無法控制的情況導致出於所有實際目的處理此類創建命令都不可行，股份的創建一般可以暫停，或拒絕特定請求的創建。贊助商可以拒絕訂單，或者在接受訂單後，可以通過拒絕總籃子金額來取消該訂單，如果（i）該訂單沒有按照參與者協議中所述的適當形式提交，（ii）總籃子金額的轉移來自託管人已知屬於授權參與者或流動性提供者的XLm錢包地址以外的帳戶，或（iii）律師認爲，除其他原因外，執行該命令可能是非法的。贊助商或其代表均不對暫停、拒絕或接受任何創建訂單或總籃子金額負責。

特別是，在信託收到與叉子、空投或類似活動相關的任何附帶權利和/或IR虛擬貨幣後，贊助商將暫停創作，直到能夠促使信託出售或分發此類附帶權利和/或IR虛擬貨幣。

贊助商或其代表均不對暫停、拒絕或接受任何創建訂單或總籃子金額負責。

授權參與者負責適用於Baskets創建的任何轉讓稅、銷售或使用稅、印花稅、記錄稅、增值稅或類似稅收或政府收費，無論該稅收或收費是否直接向授權參與者徵收，並同意向發起人和信託進行賠償，如果法律要求發起人或信託支付任何此類稅款，以及任何適用的罰款、稅款增加或利息。

發起人將根據信託文件的相關規定評估信託持有的XLm並確定信託的資產淨值。以下是對信託文件重大條款的描述，因爲它們與信託XLm的估值和資產淨值計算有關，資產淨值計算使用非GAAP方法計算，未用於信託的財務報表。

每個工作日下午4：00，紐約時間，或在可行的情況下儘快（「評估時間」），申辦者將評估信託持有的XLm並計算和發佈信託的資產淨值。爲了計算資產淨值，贊助商將：

如果發起人確定用於確定指數價格的主要方法不是信託XLm估值的適當基礎，發起人將利用「-XLm行業和市場概覽-XLm價值-指數和指數價格」中所述的級聯規則集。此外，如果信託持有任何附帶權利和/或IR虛擬貨幣，贊助商可以自行決定將此類附帶權利和/或IR虛擬貨幣的價值納入資產淨值的確定中，前提是贊助商已真誠地確定了爲此類附帶權利和/或IR虛擬貨幣分配客觀價值的方法。目前，信託預計不會考慮其可能持有的任何附帶權利或IR虛擬貨幣來確定資產淨值或每股資產淨值。

發起人將在確定後儘快在信託網站上發佈指數價格、信託資產淨值和每股資產淨值。如果每股資產淨值和資產淨值是使用該評估時間的指數價格以外的每XLm價格計算的，則信託網站上的公告將註明所使用的估值方法以及由此計算得出的每XLm價格。

如果Stellar網絡出現硬分叉，如果信託協議條款允許，贊助商將利用其自由裁量權，真誠地確定Stellar網絡的一組不兼容的分叉中哪個點對點網絡通常被接受爲XLm的網絡，因此應被視爲信託目的的適當網絡。贊助商將根據各種當時相關的因素做出決定，包括（但不限於）以下內容：（i）贊助商對XLm核心開發人員、用戶、服務、企業、驗證者和其他支持者的期望的信念，以及（ii）對驗證權力的實際持續接受以及與Stellar Network的社區參與。

股東可以依賴發起人提供的任何評估。贊助商將根據其合理獲得的信息真誠地做出決定，贊助商對其合理獲得的信息不承擔任何責任。贊助商將不對授權參與者、股東或任何其他人因判斷錯誤而承擔任何責任。然而，上述責任排除不會保護申辦者免受因履行職責時的重大疏忽、故意不當行爲或惡意而產生的任何責任。

信託基金唯一的普通經常性費用預計是贊助商費用。截至下午4：00，贊助商費用將每天以美元計，年率爲信託資產淨值基本金額的2.5%，紐約時間，每天;前提是對於非工作日的一天，計算將基於最近一個工作日的淨資產費用基準金額，減去最近一個工作日以及最近一個工作日之後和相關計算日期之前的每一天的應計和未付贊助商費用。然後，每次每日應計的美元金額將參考用於確定此類應計的相同指數價格轉換爲XLm。贊助商費用每月以XLm形式支付給贊助商。

信託向保薦人支付保薦人的費用。作爲從信託收取保薦人費用的部分代價，根據信託協議，保薦人有義務承擔和支付信託在其正常事務過程中發生的所有費用和其他費用，不包括稅款，但包括：(1)營銷費；(2)管理費(如果有)；(3)託管費和信託聘請的任何其他證券賣家的費用；(4)轉讓代理費；(5)受託人費用；(Vi)任何特定財政年度內與股票在任何二級市場上市、報價或交易有關的費用及開支(包括慣常的法律、市場推廣及審計費用及開支)；(Vii)普通過程法律費用及開支；(Viii)審計費；(Ix)監管費用，包括根據證券法或交易法登記股份的任何費用(如適用)；(X)印刷及郵寄費用；(Xi)維持信託網站的費用；和(Xii)適用的許可費(每一項都是贊助商支付的費用)，前提是任何符合額外信託費用資格的費用將被視爲額外信託費用，而不是贊助商支付的費用。保薦人可隨時酌情決定在規定的時間內暫時免除保薦人的全部或部分信託費用。目前，保薦人不打算免除保薦人對信託基金的任何費用，在任何情況下，保薦人都不會決定一定會免除保薦人的費用。

贊助商費用通常以XLm支付。然而，如果信託在任何時候持有任何附帶權利和/或IR虛擬貨幣，信託還可以通過與贊助商簽訂協議並將該附帶權利和/或IR虛擬貨幣轉讓給贊助商，以根據該協議確定的價值，向贊助商支付全部或部分此類附帶權利和/或IR虛擬貨幣。然而，只有在此類協議和轉讓不與信託協議的條款衝突的情況下，信託才可以使用附帶權利和/或IR虛擬貨幣支付贊助商費用。款價值

此類附帶權利和/或IR虛擬貨幣將在公平交易的基礎上確定。該信託目前預計，任何此類附帶權利和/或IR虛擬貨幣的價值將通過參考指數提供商提供的指數來確定，或者在沒有此類指數的情況下，通過參考「XLm行業和市場概覽-XLm價值-指數和指數價格」中描述的級聯規則集來確定。如果信託以附帶權利和/或IR虛擬貨幣全部或部分支付贊助商費用，則原本用於支付此類付款的XLm金額將相應減少。

信託向贊助商支付贊助商費用後，贊助商可以選擇將作爲贊助商費用付款而收到的XLm、附帶權利和/或IR虛擬貨幣兌換爲美元。贊助商將此類XLm、附帶權利和/或IR虛擬貨幣兌換爲美元的匯率可能與確定相關贊助商費用的匯率不同。信託不負責贊助商將支付贊助商費用時收到的XLm、附帶權利和/或IR虛擬貨幣兌換成美元而產生的任何費用和開支。

在某些特殊情況下，信託可能產生一些非保薦人支付的非常、非經常性費用，包括但不限於：稅收和政府費用；保薦人(或任何其他服務提供商)代表信託爲保護信託或股東利益(包括與任何附帶權利和任何IR虛擬貨幣有關的)而執行的任何特別服務的費用和成本；對託管人或信託的其他代理人、服務提供商或交易對手的任何賠償；於任何特定財政年度內，與股份在任何第二市場上市、報價或買賣有關的費用及開支(包括法律、市場推廣及審計費用及開支)超過600,000元；以及非常法律費用及開支，包括任何法律費用及與訴訟、監管執行或調查事宜有關的開支(統稱爲「額外信託開支」)。如果產生額外的信託費用，信託公司將被要求通過出售或交付XLM、附帶權利和/或IR虛擬貨幣來支付這些額外的信託費用。一般來說，保薦人將代表信託基金支付此類費用，信託基金將通過向保薦人提供XLM、附帶權利和/或IR虛擬貨幣來補償保薦人，金額相當於此類費用。當信託和保薦人代表信託出售或交付XLM、附帶權利和/或IR虛擬貨幣時，他們通常不會與受權參與者、流動性提供者或其他受聯邦和州許可要求並維持旨在遵守AML和KYC法規的做法和政策的交易對手直接交易。

任何此類附帶權利和/或IR虛擬貨幣的價值將在公平的基礎上確定。信託目前預計，任何此類附帶權利和/或IR虛擬貨幣的價值將通過參考指數提供商提供的指數來確定，如果沒有這樣的指數，則通過參考「XLm行業和市場概覽-XLM值-指數和指數價格」中描述的一套級聯規則來確定。如果信託支付全部或部分附帶權利和/或IR虛擬貨幣的額外信託費用，則用於支付此類付款的XLM金額將相應減少。有關XLM、附帶權利和/或IR虛擬貨幣的銷售或其他處置的詳細信息，請參閱「-XLM、附帶權利和/或IR虛擬貨幣的處置」。雖然發起人不能明確說明額外信託費用的頻率或大小，但發起人預計這種情況可能不會經常發生。

贊助商或其任何附屬機構只能獲得贊助商或其附屬機構代表信託預付並由信託負責支付的任何費用的實際費用的報銷。此外，信託協議禁止信託向發起人或該附屬機構支付作爲信託發起人（或發起人的附屬機構）爲信託提供服務所產生的間接費用，例如高級職員和董事的工資和附帶福利、租金或折舊、水電費和通常屬於發起人「管理費用」類別的其他行政項目。

爲了促使信託支付保薦人的費用，保薦人應指示保管人(I)從數字資產帳戶中提取XLM、附帶權利和/或IR虛擬貨幣的金額，如上文「-費用；XLM的銷售」中所述，相當於應計但未支付的保薦人費用和(Ii)在保管人根據其絕對酌情決定權決定的時間將該XLM、附帶權利和/或IR虛擬貨幣轉移到保管人爲保薦人爲保薦人維護的帳戶。此外，如果信託產生任何額外的信託費用，發起人或其代表(I)將指示託管人從數字資產帳戶XLM、附帶權利和/或IR虛擬貨幣中提取必要的數量，以允許支付此類額外的信託費用，並且(Ii)可以(X)促使信託以實際匯率將該XLM、附帶權利和/或IR虛擬貨幣轉換爲美元或其他法定貨幣，或(Y)當發起人代表信託產生此類費用時，促使信託(或其代表)交付此類XLM，附帶權利和/或IR虛擬貨幣給贊助商，在每種情況下，數量可能是必要的，以允許支付該額外的信託費用。保薦人的費用和信託公司應支付的額外信託費用一般將以XLM支付。股東不得選擇支付其按比例支付的額外信託費用份額，而不是通過信託的交付或處置支付其份額的額外信託費用

XLm、附帶權利和/或IR虛擬貨幣。假設該信託是美國聯邦所得稅目的的授予人信託，則轉讓或出售XLm、附帶權利和/或IR虛擬貨幣以支付信託費用將是股東的應稅事件。請參閱「某些美國聯邦所得稅後果-對美國持有者的稅收後果」。

由於以XLm支付發起人費用或出售XLm以支付額外信託費用，信託持有的XLm金額將減少（並且信託將產生與將XLm兌換爲美元相關的額外費用），因此此時股份所代表的XLm金額將下降，信託的資產淨值也可能下降。同樣，由於使用附帶權利和IR虛擬貨幣支付贊助商費用和額外信託費用，股份所代表的附帶權利和IR虛擬貨幣的金額（如果有）將減少。因此，股東將承擔發起人費用和任何額外信託費用的費用。將新XLm存入數字資產帳戶以換取信託發行的額外新籃子不會扭轉這一趨勢。

如果發起人確定出售是適用法律或法規要求的或與信託的終止和清算有關的，發起人還將導致出售信託的XLm、附帶權利和/或IR虛擬貨幣。贊助商不會以任何方式對因銷售XLm、附帶權利和/或IR虛擬貨幣而產生的折舊或損失承擔任何責任。

交付給贊助商或其他相關收款人以支付贊助商費用或任何額外信託費用，或出售以允許支付額外信託費用的XLm、附帶權利或IR虛擬貨幣的數量將不時有所不同，具體取決於信託費用的水平以及信託持有的XLm、附帶權利或IR虛擬貨幣的價值。請參閱「-費用; XLm的銷售。」假設該信託是用於美國聯邦所得稅目的的授予人信託，則信託爲支付費用而交付或出售XLm、附帶權利和IR虛擬貨幣的每次將對股東構成應稅事件。請參閱「-美國某些聯邦所得稅後果-對美國持有者的稅收後果」。

下表說明了信託費用支付對三年內每股已發行股份所代表的XLm金額的預期影響，假設信託不使用任何附帶權利和/或IR虛擬貨幣進行任何付款。它假設XLm的唯一轉讓將是支付發起人費用所需的轉讓，並且XLm的價格和股份數量在所涵蓋的三年期間保持不變。該表沒有顯示任何額外信託費用的影響。任何額外信託費用（如果發生）將加速每股股份所代表的XLm小額金額的減少。此外，該表格並未顯示可能不時生效的贊助商費用豁免的影響。

指數提供商對指數價格的確定擁有全權決定權，並可不時更改指數價格的確定方法。

以下是對信託協議重大條款的描述。信託協議規定了發起人和受託人的角色、權利和義務。

Neither the Sponsor nor the Trust insure the Trust’s XLM. The Sponsor and its affiliates (each a “Covered Person”) will not be liable to the Trust or any shareholder for any loss suffered by the Trust which arises out of any action or inaction of such Covered Person if such Covered Person determined in good faith that such course of conduct was in the best interests of the Trust. However, the preceding liability exclusion will not protect any Covered Person against any liability resulting from its own willful misconduct, bad faith or gross negligence in the performance of its duties.

Each Covered Person will be indemnified by the Trust against any loss, judgment, liability, expense incurred or amount paid in settlement of any claim sustained by it in connection with the Covered Person’s activities for the Trust, provided that (i) the Covered Person was acting on behalf of, or performing services for, the Trust and had determined, in good faith, that such course of conduct was in the best interests of the Trust and such liability or loss was not the result of fraud, gross negligence, bad faith, willful misconduct or a material breach of the Trust Agreement on the part of such Covered Person and (ii) any such indemnification will be recoverable only from the property of the Trust. Any amounts payable to an indemnified party will be payable in advance under certain circumstances.

The Sponsor is not effectively subject to the duties and restrictions imposed on “fiduciaries” under both statutory and common law. Rather, the general fiduciary duties that would apply to the Sponsor are defined and limited in scope by the Trust Agreement.

Under Delaware law, a shareholder may bring a derivative action if the shareholder is a shareholder at the time the action is brought and either (i) was a shareholder at the time of the transaction at issue or (ii) acquired the status of shareholder by operation of law or the Trust’s governing instrument from a person who was a shareholder at the time of the transaction at issue. Additionally, Section 3816(e) of the Delaware Statutory Trust Act specifically provides that “a beneficial owner’s right to bring a derivative action may be subject to such additional standards and restrictions, if any, as are set forth in the governing instrument of the statutory trust, including, without limitation, the requirement that beneficial owners owning a specified beneficial interest in the statutory trust join in the bringing of the derivative action.” In addition to the requirements of applicable law, the Trust Agreement provides that no shareholder will have the right, power or authority to bring or maintain a derivative action, suit or other proceeding on behalf of the Trust unless two or more shareholders who (i) are not “Affiliates” (as defined in the Trust Agreement and below) of one another and (ii) collectively hold at least 10.0% of the outstanding Shares join in the bringing or maintaining of such action, suit or other proceeding. The Trust selected the 10.0% ownership threshold because the Trust believed that this was a threshold that investors would be comfortable with based on market precedent.

This provision applies to any derivative action brought in the name of the Trust other than claims brought under the federal securities laws or the rules and regulations thereunder, to which Section 7.4 does not apply. Due to this additional requirement, a shareholder attempting to bring a derivative action in the name of the Trust will be required to locate other shareholders with which it is not affiliated and that have sufficient Shares to meet the 10.0% threshold based on the number of Shares outstanding on the date the claim is brought and thereafter throughout the duration of the action, suit or proceeding.

“Affiliate” is defined in the Trust Agreement to mean any natural person, partnership, limited liability company, statutory trust, corporation, association or other legal entity (each, a “Person”) directly or indirectly owning, controlling or holding with power to vote 10% or more of the outstanding voting securities of such Person, (ii) any Person 10% or more of whose outstanding voting securities are directly or indirectly owned, controlled or held with power to vote by such Person, (iii) any Person, directly or indirectly, controlling, controlled by or under common control of such Person, (iv) any employee, officer, director, member, manager or partner of such Person, or (v) if such Person is an employee, officer, director, member, manager or partner, any Person for which such Person acts in any such capacity.

Any shareholders seeking to bring a derivative action may determine whether the 10.0% ownership threshold required to bring a derivative action has been met by dividing the number Shares owned by such shareholders by the total number of Shares outstanding. Shareholders may determine the total number of Shares outstanding by reviewing the Trust’s annual filings on Form 10-K, quarterly filings on Form 10-Q and current reports on Form 8-K reporting sales of unregistered securities pursuant to Item 3.02 thereof, or by requesting the number of Shares outstanding at any time from the Sponsor pursuant to Sections 7.2 and 8.1 of the Trust Agreement and Section 3819(a) of the DSTA. Because the Trust is a grantor trust, it may only issue one class of securities, the Shares.

The Trust offers Shares on a periodic basis at such times and for such periods as the Sponsor determines in its sole discretion. As a result, in order to maintain the 10.0% ownership threshold required to maintain a derivative action, shareholders may need to increase their holdings or locate additional shareholders during the pendency of a claim. The Trust posts the number of Shares outstanding as of the end of each month on its website and as of the end of each quarter in its annual and quarterly filings with the SEC. The Trust additionally reports sales of unregistered securities on Form 8-K pursuant to Item 3.02 thereof. Shareholders may monitor the number of Shares outstanding at any time for purposes of calculating their ownership threshold by reviewing the Trust’s website and SEC filings and by requesting the number of Shares outstanding on any date from the Sponsor at any time pursuant to Sections 7.2 and 8.1 of the

Trust Agreement. Shareholders have the opportunity at any time to increase their holdings or locate other shareholders to maintain the 10.0% threshold throughout the duration of a derivative claim. Shareholders may do so by contacting shareholders that are required to file Schedule 13Ds or Schedule 13Gs with the SEC or by requesting from the Sponsor the list of the names and last known address of all shareholders pursuant to Sections 7.2 and 8.1 of the Trust Agreement and Section 3819(a) of the DSTA.

The Sponsor is not aware of any reason to believe that Section 7.4 of the Trust Agreement is not enforceable under state or federal law. The Court of Chancery of Delaware has stated that “[t]he DSTA is enabling in nature and, as such, permits a trust through its declarations of trust to delineate additional standards and requirements with which a stockholder-plaintiff must comply to proceed derivatively in the name of the trust.” Hartsel v. Vanguard Group, Inc., Del. Ch. June 15, 2011. However, there is limited case law addressing the enforceability of provisions like Section 7.4 under state and federal law and it is possible that this provision would not be enforced by a court in another jurisdiction or under other circumstances.

Beneficial owners may have the right, subject to certain legal requirements, to bring class actions in federal court to enforce their rights under the federal securities laws and the rules and regulations promulgated thereunder by the SEC. Beneficial owners who have suffered losses in connection with the purchase or sale of their beneficial interests may be able to recover such losses from the Sponsor where the losses result from a violation by the Sponsor of the anti-fraud provisions of the federal securities laws.

The Sponsor may prosecute, defend, settle or compromise actions or claims at law or in equity that it considers necessary or proper to protect the Trust or the interests of the shareholders. The expenses incurred by the Sponsor in connection therewith (including the fees and disbursements of legal counsel) will be expenses of the Trust and are deemed to be Additional Trust Expenses. The Sponsor will be entitled to be reimbursed for the Additional Trust Expenses it pays on behalf of the Trust.

If the Sponsor is adjudged bankrupt or insolvent, the Trust may dissolve and a Liquidating Trustee may be appointed to terminate and liquidate the Trust and distribute its remaining assets. The Trustee will have no obligation to appoint a successor sponsor or to assume the duties of the Sponsor, and will have no liability to any person because the Trust is or is not terminated. However, if a certificate of dissolution or revocation of the Sponsor’s charter is filed (and ninety (90) days have passed after the date of notice to the Sponsor of revocation without a reinstatement of the Sponsor’s charter) or the withdrawal, removal, adjudication or admission of bankruptcy or insolvency of the Sponsor has occurred, shareholders holding at least a majority (over 50%) of the Shares may agree in writing to continue the affairs of the Trust and to select, effective as of the date of such event, one or more successor Sponsors within ninety (90) days of any such event.

The Trustee is a fiduciary under the Trust Agreement and must satisfy the requirements of Section 3807 of the Delaware Trust Statute. However, the fiduciary duties, responsibilities and liabilities of the Trustee are limited by, and are only those specifically set forth in, the Trust Agreement.

Under the Trust Agreement, the Sponsor has exclusive control of the management of all aspects of the activities of the Trust and the Trustee has only nominal duties and liabilities to the Trust. The Trustee is appointed to serve as the trustee for the sole purpose of satisfying Section 3807(a) of the DSTA which requires that the Trust have at least one trustee with a principal place of business in the State of Delaware. The duties of the Trustee are limited to (i) accepting legal process served on the Trust in the State of Delaware and (ii) the execution of any certificates required to be filed with the Delaware Secretary of State which the Trustee is required to execute under the DSTA.

To the extent the Trustee has duties (including fiduciary duties) and liabilities to the Trust or the shareholders under the DSTA, such duties and liabilities will be replaced by the duties and liabilities of the Trustee expressly set forth in the Trust Agreement. The Trustee will have no obligation to supervise, nor will it be liable for, the acts or omissions of the Sponsor, Transfer Agent, Custodian or any other person. Neither the Trustee, either in its capacity as trustee or in its individual capacity, nor any director, officer or controlling person of the Trustee is, or has any liability as, the issuer, director, officer or controlling person of the issuer of Shares. The Trustee’s liability is limited solely to the express obligations of the Trustee as set forth in the Trust Agreement.

Under the Trust Agreement, the Sponsor has the exclusive management, authority and control of all aspects of the activities of the Trust. The Trustee has no duty or liability to supervise or monitor the performance of the Sponsor, nor does the Trustee have any liability for the acts or omissions of the Sponsor. The existence of a trustee should not be taken as an indication of any additional level of management or supervision over the Trust. The Trust Agreement provides that the management authority with respect to the Trust is

vested directly in the Sponsor and that the Trustee is not responsible or liable for the genuineness, enforceability, collectability, value, sufficiency, location or existence of any of the XLM or other assets of the Trust.

Possible Repayment of Distributions Received by Shareholders; Indemnification by Shareholders

The Shares are limited liability investments. Investors may not lose more than the amount that they invest plus any profits recognized on their investment. Although it is unlikely, the Sponsor may, from time to time, make distributions to the shareholders. However, shareholders could be required, as a matter of bankruptcy law, to return to the estate of the Trust any distribution they received at a time when the Trust was in fact insolvent or in violation of its Trust Agreement. In addition, the Trust Agreement provides that shareholders will indemnify the Trust for any harm suffered by it as a result of shareholders’ actions unrelated to the activities of the Trust.

The foregoing repayment of distributions and indemnity provisions (other than the provision for shareholders indemnifying the Trust for taxes imposed upon it by a state, local or foreign taxing authority, which is included only as a formality due to the fact that many states do not have statutory trust statutes therefore the tax status of the Trust in such states might, theoretically, be challenged) are commonplace in statutory trusts and limited partnerships.

The Trustee and any of the officers, directors, employees and agents of the Trustee will be indemnified by the Trust as primary obligor and DCG as secondary obligor and held harmless against any loss, damage, liability, claim, action, suit, cost, expense, disbursement (including the reasonable fees and expenses of counsel), tax or penalty of any kind and nature whatsoever, arising out of, imposed upon or asserted at any time against such indemnified person in connection with the performance of its obligations under the Trust Agreement, the creation, operation or termination of the Trust or the transactions contemplated therein; provided, however, that neither the Trust nor DCG will be required to indemnify any such indemnified person for any such expenses which are a result of the willful misconduct, bad faith or gross negligence of such indemnified person. If the Trust has insufficient assets or improperly refuses to pay such an indemnified person within 60 days of a request for payment owed under the Trust Agreement, DCG will, as secondary obligor, compensate or reimburse the Trustee or indemnify, defend and hold harmless such an indemnified person as if it were the primary obligor under the Trust Agreement. Any amount payable to such an indemnified person under the Trust Agreement may be payable in advance under certain circumstances and will be secured by a lien on the Trust property. The obligations of DCG and the Trust to indemnify such indemnified persons under the Trust Agreement will survive the termination of the Trust Agreement.

The Trust will hold and record the ownership of the Trust’s assets in a manner such that it will be owned for the benefit of the shareholders for the purposes of, and subject to and limited by the terms and conditions set forth in, the Trust Agreement. The Trust will not create, incur or assume any indebtedness or borrow money from or loan money to any person. The Trustee may not commingle its assets with those of any other person.

The Trustee may employ agents, attorneys, accountants, auditors and nominees and will not be answerable for the conduct or misconduct of any such custodians, agents, attorneys or nominees if such custodians, agents, attorneys and nominees have been selected with reasonable care.

The Trustee may resign as Trustee by written notice of its election so to do, delivered to the Sponsor with at least 180 days’ notice. The Sponsor may remove the Trustee in its discretion. If the Trustee resigns or is removed, the Sponsor, acting on behalf of the shareholders, will appoint a successor trustee. The successor Trustee will become fully vested with all of the rights, powers, duties and obligations of the outgoing Trustee.

If the Trustee resigns and no successor trustee is appointed within 180 days after the Trustee notifies the Sponsor of its resignation, the Trustee will terminate and liquidate the Trust and distribute its remaining assets.

In general, the Sponsor may amend the Trust Agreement without the consent of any shareholder. In particular, the Sponsor may, without the approval of the shareholders, amend the Trust Agreement if the Trust is advised at any time by the Trust’s accountants or legal counsel that the amendments are necessary to permit the Trust to take the position that it is a grantor trust for U.S. federal income tax purposes. However, the Sponsor may not make an amendment, or otherwise supplement the Trust Agreement, if such amendment or supplement would permit the Sponsor, the Trustee or any other person to vary the investment of the shareholders (within the meaning of applicable Treasury Regulations) or would otherwise adversely affect the status of the Trust as a grantor trust for U.S. federal income

tax purposes. In addition, no amendments to the Trust Agreement that materially adversely affect the interests of shareholders may be made without the vote of at least a majority (over 50%) of the Shares (not including any Shares held by the Sponsor or its affiliates). A shareholder will be deemed to have consented to a modification or amendment of the Trust Agreement if the Sponsor has notified the shareholders in writing of the proposed modification or amendment and the shareholder has not, within 20 calendar days of such notice, notified the Sponsor in writing the shareholder objects to such modification or amendment.

The Sponsor may, in its sole discretion, dissolve the Trust if any of the following events occur:

The Sponsor may determine that it is desirable or advisable to discontinue the affairs of the Trust for a variety of reasons. For example, the Sponsor may terminate the Trust if a federal court upholds an allegation that XLM is a security under the federal securities laws.

The death, legal disability, bankruptcy, insolvency, dissolution, or withdrawal of any shareholder (as long as such shareholder is not the sole shareholder of the Trust) will not result in the termination of the Trust, and such shareholder, his or her estate, custodian or personal representative will have no right to a redemption or value such shareholder’s Shares. Each shareholder (and any assignee thereof) expressly agrees that in the event of his or her death, he or she waives on behalf of himself or herself and his or her estate, and he or she directs the legal representative of his or her estate and any person interested therein to waive the furnishing of any inventory,

accounting or appraisal of the assets of the Trust and any right to an audit or examination of the books of account for the Trust, except for such rights as are set forth in Article VIII of the Trust Agreement relating to the books of account and reports of the Trust.

Upon dissolution of the Trust and surrender of Shares by the shareholders, shareholders will receive a distribution in U.S. dollars or in XLM, Incidental Rights and/or IR Virtual Currency, at the sole discretion of the Sponsor, after the Sponsor has sold the Trust’s XLM, Incidental Rights and IR Virtual Currency, if applicable, and has paid or made provision for the Trust’s claims and obligations.

If the Trust is forced to liquidate, the Trust will be liquidated under the Sponsor’s direction. The Sponsor, on behalf of the Trust, will engage directly with Digital Asset Markets to liquidate the Trust’s XLM as promptly as possible while obtaining the best fair value possible. The proceeds therefrom will be applied and distributed in the following order of priority: (a) to the expenses of liquidation and termination and to creditors, including shareholders who are creditors, to the extent otherwise permitted by law, in satisfaction of liabilities of the Trust other than liabilities for distributions to shareholders and (b) to the holders of Shares pro rata in accordance with the respective percentage of percentages of Shares that they hold. It is expected that the Sponsor would be subject to the same regulatory requirements as the Trust, and therefore, the markets available to the Sponsor will be the same markets available to the Trust.

The Trust Agreement and the rights of the Sponsor, Trustee and shareholders under the Trust Agreement are governed by the laws of the State of Delaware.

The Custodian Agreement establishes the rights and responsibilities of the Custodian, Sponsor, Trust and Authorized Participants with respect to the Trust’s XLM in the Digital Asset Account, which is maintained and operated by the Custodian on behalf of the Trust. For a general description of the Custodian’s obligations, see “—Service Providers of the Trust—The Custodian.”

The Trust’s Digital Asset Account is a segregated custody account controlled and secured by the Custodian to store private keys, which allow for the transfer of ownership or control of the Trust’s XLM, on the Trust’s behalf. Private key shards associated with the Trust’s XLM are distributed geographically by the Custodian in secure vaults around the world, including in the United States. The locations of the secure vaults may change regularly and are kept confidential by the Custodian for security purposes. The Custodian requires written approval of the Trust prior to changing the location of the private key shards, and therefore the Trust’s XLM, to a location outside the United States. The Digital Asset Account uses offline storage, or cold storage, mechanisms to secure the Trust’s private keys. The term cold storage refers to a safeguarding method by which the private keys corresponding to digital assets are disconnected and/or deleted entirely from the internet.

The Custodian Agreement states that the Custodian serves as a fiduciary and custodian on the Trust’s behalf, and the XLM in the Digital Asset Account are considered fiduciary assets that remain the Trust’s property at all times and are not treated as general assets of the Custodian. Under the Custodian Agreement, the Custodian represents and warrants that it has no right, interest, or title in the XLM held in the Digital Asset Account, and agrees that it will not, directly or indirectly, lend, pledge, hypothecate or rehypothecate such digital assets. The Custodian does not reflect such digital assets as an asset on the balance sheet of the Custodian, but does reflect the obligation to safeguard such digital assets with a corresponding asset measured at fair value for such obligation. The Custodian Agreement also contains an agreement by the parties to treat the digital assets credited to the Trust’s Digital Asset Account as financial assets under Article 8 of the New York Uniform Commercial Code (“Article 8”). The Custodian’s parent, Coinbase Global Inc., has stated in its public securities filings that in light of the inclusion in its custody agreements of provisions relating to Article 8 it believes that a court would not treat custodied digital assets as part of its general estate, although due to the novelty of digital assets courts have not yet considered this type of treatment for custodied digital assets. See “Item 1A. Risk Factors—Risk Factors Related to the Trust and the Shares— The Trust relies on third-party service providers to perform certain functions essential to the affairs of the Trust and the replacement of such service providers could pose a challenge to the safekeeping of the Trust’s XLM and to the operations of the Trust.”

The Custodian will use best efforts to keep in safe custody on behalf of the Trust all XLM received by the Custodian. All XLM credited to the Digital Asset Account will (i) be held in the Digital Asset Account at all times, and the Digital Asset Account will be controlled by the Custodian; (ii) be labeled or otherwise appropriately identified as being held for the Trust; (iii) be held in the Digital Asset Account on a non-fungible basis; (iv) not be commingled with other digital assets held by the Custodian, whether held for the Custodian’s own account or the account of other clients other than the Trust; (v) not without the prior written consent of the Trust be deposited or held with any third-party depositary, custodian, clearance system or wallet; and (vi) for any Digital Asset Account maintained by the Custodian on behalf of the Trust, the Custodian will use best efforts to keep the private key or keys secure, and will not disclose such keys to the Trust, the Sponsor or to any other individual or entity except to the extent that any keys are disclosed

consistent with a standard of best efforts and as part of a multiple signature solution that would not result in the Trust or the Sponsor “storing, holding, or maintaining custody or control of” the XLM “on behalf of others” within the meaning of the New York BitLicense Rule (23 NYCRR Part 200) as in effect as of June 24, 2015 such that it would require the Trust or the Sponsor to become licensed under such law.

Pursuant to the terms of the Custodian Agreement, the Custodian is required to maintain insurance in such types and amounts as are commercially reasonable for the custodial services provided by the Custodian. The Custodian has advised the Sponsor that it has insurance coverage pursuant to policies held by Coinbase Global, Inc. (“Coinbase”), which procures fidelity (or crime) insurance coverage at commercially reasonable amounts for the custodial services provided. This insurance coverage is limited to losses of the digital assets the Custodian custodies on behalf of its clients, including the Trust’s XLM, resulting from theft, including internal theft by employees of Coinbase and its subsidiaries and theft or fraud by a director of Coinbase if the director is acting in the capacity of an employee of Coinbase or its subsidiaries.

Moreover, while the Custodian maintains certain capital reserve requirements depending on the assets under custody and to the extent required by applicable law, and such capital reserves may provide additional means to cover client asset losses, the Sponsor does not know the amount of such capital reserves, and neither the Trust nor the Sponsor have access to such information. The Trust cannot be assured that the Custodian will maintain capital reserves sufficient to cover losses with respect to the Trust’s digital assets. Furthermore, Coinbase has represented in securities filings that the total value of crypto assets in its possession and control is significantly greater than the total value of insurance coverage that would compensate Coinbase in the event of theft or other loss of funds.

The Custodial Services (i) allow XLM to be deposited from a public blockchain address to the Digital Asset Account and (ii) allow the Trust or Sponsor to withdraw XLM from the Digital Asset Account to a public blockchain address the Trust or the Sponsor controls (each such transaction is a “Custody Transaction”).

The Custodian reserves the right to refuse to process or to cancel any pending Custody Transaction as required by law or in response to a subpoena, court order, or other binding government order or to enforce transaction, threshold, and condition limits, in each case as communicated to the Trust and the Sponsor as soon as reasonably practicable where the Custodian is permitted to do so, or if the Custodian reasonably believes that the Custody Transaction may violate or facilitate the violation of an applicable law, regulation or applicable rule of a governmental authority or self-regulatory organization. The Custodian may suspend or restrict the Trust’s and Sponsor’s access to the Custodial Services, and/or deactivate, terminate or cancel the Digital Asset Account if the Trust or Sponsor has taken certain actions, including any Prohibited Use or Prohibited Business as set forth in the Custodian Agreement, or if the Custodian is required to do so by a subpoena, court order, or other binding government order.

From the time the Custodian has verified the authorization of a complete set of instructions to withdraw XLM from the Digital Asset Account, the Custodian will have up to forty-eight (48) hours to process and complete such withdrawal. The Custodian will ensure that initiated deposits are processed in a timely manner but the Custodian makes no representations or warranties regarding the amount of time needed to complete processing which is dependent upon many factors outside of the Custodian’s control.

Subject to certain exceptions in the Custodian Agreement, the Trust, the Sponsor and their authorized representatives will be able to access the Digital Asset Account via the Custodian’s website in order to check information about the Digital Asset Account, deposit XLM to the Digital Asset Account or initiate a Custody Transaction (subject to the timing described above).

The Custodian makes no other representations or warranties with respect to the availability and/or accessibility of XLM or the availability and/or accessibility of the Digital Asset Account or Custodial Services.

Subject to any legal and regulatory requirements, in order to support the Trust’s ordinary course of deposits and withdrawals, which involves, or will in the future involve, deposits from and withdrawals to Digital Asset Accounts owned by any Authorized Participant, or a Liquidity Provider, the Custodian will use commercially reasonable efforts to cooperate with the Trust and Sponsor to design and put in place via the Custodial Services a secure procedure to allow Authorized Participants to receive an XLM address for deposits by Authorized Participants, or Liquidity Providers, and to initiate withdrawals to XLM addresses controlled by Authorized Participants, or Liquidity Providers.

The Custodian Agreement further provides that the Trust’s and the Sponsor’s auditors or third-party accountants upon 30 days’ advance written notice, have inspection rights to inspect, take extracts from and audit the records maintained with respect to the Digital Asset Account. Such auditors or third-party accountants are not obligated under the Custodian Agreement to exercise their inspection rights.

The Custodian securely stores all digital asset private keys held by the Custodian in offline storage. Under the Custodian Agreement, the Custodian must use best efforts to keep private and public keys secure, and may not disclose private keys to the Sponsor, Trust or any other individual or entity.

The Custodian has implemented and will maintain a reasonable information security program that includes policies and procedures that are reasonably designed to safeguard the Custodian’s electronic systems and the Trust’s and the Sponsor’s confidential information from, among other things, unauthorized access or misuse. In the event of a Data Security Event (as defined below), the Custodian will promptly (subject to any legal or regulatory requirements) notify the Trust and the Sponsor. “Data Security Event” is defined as any event whereby (a) an unauthorized person (whether within the Custodian or a third party) acquired or accessed the Trust’s or the Sponsor’s information, (b) the Trust’s or the Sponsor’s information is otherwise lost, stolen or compromised or (c) the Custodian’s Chief Information Security Officer, or other senior security officer of a similar title, is no longer employed by the Custodian.

The Custodian will keep timely and accurate records of its services pursuant to the Custodian Agreement, and such records must be retained by the Custodian for no less than seven years. The Custodian Agreement also provides that the Custodian will permit, to the extent it may legally do so, the Trust’s or the Sponsor’s auditors or third-party accountants, upon reasonable notice, to inspect, take extracts from and audit the records that it maintains, take such steps as necessary to verify that satisfactory internal control systems and procedures are in place, as the Trust or the Sponsor may reasonably request. The Custodian is obligated to notify the Trust and the Sponsor of any audit report prepared by its internal or independent auditors if such report reveals any material deficiencies or makes any material objections.

The Trust and the Sponsor obtain and perform a comprehensive review of the Services Organization Controls (“SOC”) 1 report and SOC 2 each year. For additional information, see “—Description of Trust Documents—Description of the Custodian Agreement—Annual Certificate and Report.” In addition to the review of SOC 1 and SOC 2 reports, the Trust, the Sponsor and/or their respective auditors may inspect or audit the Custodian’s records in a variety of manners if considered necessary. Such processes, may include validating the existing balances as reflected on the Custodian’s user interface to nodes of the underlying blockchain and confirming that such digital assets are associated with its public keys to validate the existence and exclusive ownership of the digital assets. To validate software functionality of the private keys, the Trust may transfer a portion of its digital assets from one public key to another public key of the Trust.

The Trust, the Sponsor and their independent auditors may evaluate the Custodian’s protection of private keys and other customer information, including review of supporting documentation related to the processes surrounding key lifecycle management, the key generation process (hardware, software, and algorithms associated with generation) the infrastructure used to generate and store private keys, how private keys are stored (for example, cold wallets), the segregation of duties in the authorization of digital asset transactions, and the number of users required to process a transaction and the monitoring of addresses for any unauthorized activity. For additional information, see “—Custody of the Trust’s XLM.”

Once each calendar year, the Sponsor or Trust may request that the Custodian deliver a certificate signed by a duly authorized officer to certify that all representations and warranties made by the Custodian in the Custodian Agreement are true and correct on and as of the date of such certificate, and have been true and correct throughout the preceding year.

Once each calendar year, the Trust and the Sponsor will be entitled to request that the Custodian provide a copy of its most recent SOC 1 and SOC 2 reports, which are required to be dated within one year prior to such request. The Custodian reserves the right to combine the SOC 1 and SOC 2 reports into a comprehensive report. In the event that the Custodian does not deliver a SOC 1 Report or SOC 2 Report, as applicable, the Sponsor and the Trust will be entitled to terminate the Agreement.

The Custodian will use best efforts to keep in safe custody on behalf of the Trust all XLM received by the Custodian. The Custodian is liable to the Sponsor and the Trust for the loss of any XLM to the extent that the Custodian directly caused such loss through a breach of the Custodian Agreement and the Custodian is required to return to the Trust a quantity equal to the quantity of any such lost XLM. In addition, if the Trust or the Sponsor is unable to timely withdraw XLM from the Digital Asset Account due to the Custodian’s systems being offline or otherwise unavailable for a period of 48 hours or more, the Custodian will use its best efforts to provide the Sponsor and the Trust with an amount of XLM that is equivalent to any pending withdrawal amounts in order to permit the Sponsor and the Trust to carry on processing withdrawals.

The Custodian’s or Trust’s total liability under the Custodian Agreement will never exceed the value of the XLM on deposit in the Digital Asset Account at the time of, and directly relating to, the events giving rise to the liability occurred, the value of which will be determined in accordance with the Custodian Agreement. In addition, for as long as a cold storage address holds XLM with a value in excess of $100 million (the “Cold Storage Threshold”) for a period of five consecutive business days or more without being reduced to the Cold Storage Threshold or lower, the Custodian’s maximum liability for such cold storage address shall be limited to the Cold Storage Threshold. The Sponsor monitors the value of XLM deposited in cold storage addresses for whether the Cold Storage Threshold has been met by determining the U.S. dollar value of XLM deposited in each cold storage address on business days. Although the Cold Storage Threshold has never been met for a given cold storage address, to the extent it is met and not reduced within five business days, the Trust would not have a claim against the Custodian with respect to the digital assets held in such address to the extent the value exceeds the Cold Storage Threshold.

The Custodian or Trust are not liable to each other for any lost profits or any special, incidental, indirect, intangible, or consequential damages, whether based in contract, tort, negligence, strict liability or otherwise, and whether or not the Custodian has been advised of such losses or the Custodian knew or should have known of the possibility of such damages.

Furthermore, the Custodian is not liable for delays, suspension of operations, whether temporary or permanent, failure in performance, or interruption of service which result directly or indirectly from any cause or condition beyond the reasonable control of the Custodian, including but not limited to, any delay or failure due to any act of God, natural disasters, act of civil or military authorities, act of terrorists, including but not limited to cyber-related terrorist acts, hacking, government restrictions, exchange or market rulings, civil disturbance, war, strike or other labor dispute, fire, interruption in telecommunications or internet services or network provider services, failure of equipment and/or software, other catastrophe or any other occurrence which is beyond the reasonable control of the Custodian and will not affect the validity and enforceability of any remaining provisions. For the avoidance of doubt, a cybersecurity attack, hack or other intrusion by a third party or by someone associated with the Custodian is not a circumstance that is beyond the Custodian’s reasonable control, to the extent due to the Custodian’s failure to comply with its obligations under the Custodian Agreement.

The Custodian does not bear any liability, whatsoever, for any damage or interruptions caused by any computer viruses, spyware, scareware, Trojan horses, worms or other malware that may affect the Sponsor’s or the Trust’s computer or other equipment, or any phishing, spoofing or other attack, unless such damage or interruption originated from the Custodian due to its gross negligence, fraud, willful misconduct or breach of the Custodian Agreement.

Each of the Custodian and the Trust has agreed to indemnify and hold harmless the other such parties from any third-party claim or third-party demand (including reasonable and documented attorneys’ fees and any fines, fees or penalties imposed by any regulatory authority) arising out of the Custodian’s or the Trust’s, as the case may be, breach of the Custodian Agreement, inaccuracy in any of the Custodian’s or the Trust’s, as the case may be, representations or warranties in the Custodian Agreement, or the Custodian’s or the Trust’s, as the case may be, knowing, in the case of the Custodian, violation of any law, rule or regulation, or the rights of any third party, except where such claim directly results from the gross negligence, fraud or willful misconduct of the other such party. In addition, the Trust has agreed to indemnify the Custodian with respect to any Incidental Rights or IR Virtual Currency abandoned by the Trust and any tax liability relating thereto or arising therefrom.

The Custodian Fee is an annualized fee charged monthly that is a percentage of the Trust’s monthly assets under custody. Following the second anniversary of the Custodian Agreement, the fee may be adjusted by the Custodian with at least six months’ advance notice. Any changes to the fee will be agreed to by the Trust and the Sponsor and the Custodian in writing. To the extent the parties cannot reach an agreement regarding any modifications in pricing, either party may elect to terminate the Custodian Agreement. It is the Trust’s and the Sponsor’s sole responsibility to determine whether, and to what extent, any taxes apply to any deposits or withdrawals conducted through the Custodial Services.

Subject to each party’s termination rights, the Custodian Agreement is for a term of two years. Thereafter, the Custodian Agreement automatically renews for successive terms of one year, unless either party elects not to renew, by providing no less than thirty days’ written notice to the other party prior to the expiration of the then-current term, or unless terminated earlier as provided herein.

During the initial term, either party may terminate the Custodian Agreement for Cause (as defined below) at any time by written notice to the other party, effective immediately, or on such later date as may be specified in the notice. “Cause” is defined as if: (i) such other party commits any material breach of any of its obligations under the Custodian Agreement; (ii) such other party is adjudged bankrupt or insolvent, or there is commenced against such party a case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or such party files an application for an arrangement with its creditors, seeks or consents to the appointment of a receiver, administrator or other similar official for all or any substantial part of its property, admits in writing its inability to pay its debts as they mature, or takes any corporate action in furtherance of any of the foregoing, or fails to meet applicable legal minimum capital requirements; or (iii) with respect to the Trust’s and the Sponsor’s right to terminate, any applicable law, rule or regulation or any change therein or in the interpretation or administration thereof has or may have a material adverse effect on the rights of the Trust, the Sponsor or any of their respective beneficiaries with respect to any services covered by the Custodian Agreement.

After the initial term, either party may terminate the Custodian Agreement (i) upon ninety (90) days’ prior written notice to the other party and (ii) for Cause at any time by written notice to the other party, effective immediately, or on such later date as may be specified in the notice.

Notwithstanding the foregoing, the Sponsor and the Trust may cancel the Digital Asset Account at any time by withdrawing all balances and contacting the Custodian. Upon termination of the Custodian Agreement, the Custodian will promptly upon the Sponsor’s or the Trust’s order deliver or cause to be delivered all digital assets held or controlled by the Custodian as of the effective date of termination, together with such copies of the records maintained pursuant to the Custodian Agreement and as the Sponsor and the Trust requests in writing.

The following discussion addresses the material U.S. federal income tax consequences of the ownership of Shares. This discussion does not describe all of the tax consequences that may be relevant to a beneficial owner of Shares in light of the beneficial owner’s particular circumstances, including tax consequences applicable to beneficial owners subject to special rules, such as:

This discussion applies only to Shares that are held as capital assets and does not address alternative minimum tax consequences or consequences of the Medicare contribution tax on net investment income.

If an entity or arrangement that is classified as a partnership for U.S. federal income tax purposes holds Shares, the U.S. federal income tax treatment of a partner will generally depend on the status of the partner and the activities of the partnership. Partnerships holding Shares and partners in those partnerships are urged to consult their tax advisers about the particular U.S. federal income tax consequences of owning Shares.

This discussion is based on the Code, administrative pronouncements, judicial decisions and final, temporary and proposed Treasury regulations as of the date hereof, changes to any of which subsequent to the date hereof may affect the tax consequences described herein. For the avoidance of doubt, this summary does not discuss any tax consequences arising under the laws of any state, local or foreign taxing jurisdiction. Shareholders are urged to consult their tax advisers about the application of the U.S. federal income

tax laws to their particular situations, as well as any tax consequences arising under the laws of any state, local or foreign taxing jurisdiction.

The Sponsor intends to take the position that the Trust is properly treated as a grantor trust for U.S. federal income tax purposes. Assuming that the Trust is a grantor trust, the Trust will not be subject to U.S. federal income tax. Rather, if the Trust is a grantor trust, each beneficial owner of Shares will be treated as directly owning its pro rata share of the Trust’s assets and a pro rata portion of the Trust’s income, gain, losses and deductions will “flow through” to each beneficial owner of Shares.

If the IRS were to disagree with, and successfully challenge, certain positions the Trust may take, including with respect to Incidental Rights and IR Virtual Currency, the Trust might not qualify as a grantor trust. In addition, the Sponsor has delivered the Pre-Creation Abandonment Notice to the Custodian, stating that the Trust is irrevocably abandoning, effective immediately prior to each Creation Time, all Incidental Rights or IR Virtual Currency to which it would otherwise be entitled as of such time and with respect to which it has not taken any Affirmative Action at or prior to such time. There can be no complete assurance that these abandonments will be treated as effective for U.S. federal income tax purposes. If the Trust were treated as owning any asset other than XLM as of any date on which it creates Shares, it would likely cease to qualify as a grantor trust for U.S. federal income tax purposes.

Because of the evolving nature of digital assets, it is not possible to predict potential future developments that may arise with respect to digital assets, including forks, airdrops and other similar occurrences. Assuming that the Trust is currently a grantor trust for U.S. federal income tax purposes, certain future developments could render it impossible, or impracticable, for the Trust to continue to be treated as a grantor trust for such purposes.

If the Trust is not properly classified as a grantor trust, the Trust might be classified as a partnership for U.S. federal income tax purposes. However, due to the uncertain treatment of digital assets for U.S. federal income tax purposes, there can be no assurance in this regard. If the Trust were classified as a partnership for U.S. federal income tax purposes, the tax consequences of owning Shares generally would not be materially different from the tax consequences described herein, although there might be certain differences, including with respect to timing of the recognition of taxable income or loss. In addition, tax information reports provided to beneficial owners of Shares would be made in a different form. If the Trust were not classified as either a grantor trust or a partnership for U.S. federal income tax purposes, it would be classified as a corporation for such purposes. In that event, the Trust would be subject to entity-level U.S. federal income tax (currently at the rate of 21%) on its net taxable income and certain distributions made by the Trust to shareholders would be treated as taxable dividends to the extent of the Trust’s current and accumulated earnings and profits. Any such dividend distributed to a beneficial owner of Shares that is a non-U.S. person for U.S. federal income tax purposes would be subject to U.S. federal withholding tax at a rate of 30% (or such lower rate as provided in an applicable tax treaty).

The remainder of this discussion is based on the assumption that the Trust will be treated as a grantor trust for U.S. federal income tax purposes.

Each beneficial owner of Shares will be treated for U.S. federal income tax purposes as the owner of an undivided interest in the XLM (and any Incidental Rights and/or IR Virtual Currency) held in the Trust. Due to the new and evolving nature of digital assets and the absence of comprehensive guidance with respect to digital assets, many significant aspects of the U.S. federal income tax treatment of digital assets are uncertain.

In 2014, the Internal Revenue Service (“IRS”) released a notice (the “Notice”) discussing certain aspects of the treatment of “convertible virtual currency” (that is, digital assets that have an equivalent value in fiat currency or that act as substitutes for fiat currency) for U.S. federal income tax purposes. In the Notice, the IRS stated that, for U.S. federal income tax purposes, such digital assets (i) are “property,” (ii) are not “currency” for purposes of the provisions of the Code relating to foreign currency gain or loss and (iii) may be held as a capital asset. In 2019, the IRS released a revenue ruling and a set of “Frequently Asked Questions” (the “Ruling & FAQs”) that provide some additional guidance, including guidance to the effect that, under certain circumstances, hard forks of digital assets are taxable events giving rise to ordinary income and guidance with respect to the determination of the tax basis of digital assets. However, the Notice and the Ruling & FAQs do not address other significant aspects of the U.S. federal income tax treatment of digital assets. Moreover, although the Ruling & FAQs address the treatment of hard forks, there continues to be significant uncertainty with respect to the timing and amount of the income inclusions. While the Ruling & FAQs do not address most situations in which airdrops occur, it is clear from the reasoning of the Ruling & FAQs that the IRS generally would treat an airdrop as a taxable event giving rise to ordinary income.

additional guidance could result in adverse tax consequences for shareholders and could have an adverse effect on the prices of digital assets, including the price of XLM in the Digital Asset Market, and therefore could have an adverse effect on the value of Shares. Future developments that may arise with respect to digital assets may increase the uncertainty with respect to the treatment of digital assets for U.S. federal income tax purposes. For example, the Notice addresses only digital assets that are “convertible virtual currency,” and it is conceivable that, as a result of a fork, airdrop or similar occurrence, a Trust will hold certain types of digital assets that are not within the scope of the Notice.

The remainder of this discussion assumes that XLM, and any Incidental Rights or IR Virtual Currency that the Trust may hold, is properly treated for U.S. federal income tax purposes as property that may be held as a capital asset and that is not currency for purposes of the provisions of the Code relating to foreign currency gain and loss.

Shareholders are urged to consult their tax advisers regarding the tax consequences of an investment in the Trust and in digital assets in general, including, in the case of shareholders that are generally exempt from U.S. federal income taxation, whether such shareholders may recognize “unrelated business taxable income” (“UBTI”) as a consequence of a fork, airdrop or similar occurrence.

It is possible that, in the future, the Trust will hold Incidental Rights and/or IR Virtual Currency that it receives in connection with its investment in XLM. The uncertainties with respect to the treatment of digital assets for U.S. federal income tax purposes, described above, apply to Incidental Rights and IR Virtual Currency, as well as to XLM. As described above, the Notice addressed only digital assets that are “convertible virtual currency,” defined as digital assets that have an equivalent value in fiat currency or that act as substitutes for fiat currency. It is conceivable that certain IR Virtual Currency the Trust may receive in the future would not be within the scope of the Notice.

In general, it is expected that the Trust would receive Incidental Rights and IR Virtual Currency as a consequence of a fork, an airdrop or a similar occurrence related to its ownership of XLM. As described above, the Ruling & FAQs include guidance to the effect that, under certain circumstances, forks (and, presumably, airdrops) of digital assets are taxable events giving rise to ordinary income, but there continues to be uncertainty with respect to the timing and amount of the income inclusions. The Trust’s receipt of Incidental Rights or IR Virtual Currency may give rise to other tax issues. The possibility that the Trust will receive Incidental Rights and/or IR Virtual Currency thus increases the uncertainties and risks with respect to the U.S. federal income tax consequences of an investment in Shares.

The Trust may distribute Incidental Rights or IR Virtual Currency, or cash from the sale of Incidental Rights or IR Virtual Currency, to the shareholders. Alternatively, the Trust may form a liquidating trust to which it contributes Incidental Rights or IR Virtual Currency and distribute interests in the liquidating trust to the shareholders. Any such distribution will not be a taxable event for a U.S. Holder (as defined below). A U.S. Holder’s tax basis in the Incidental Rights or IR Virtual Currency distributed, whether directly or through the medium of a liquidating trust, will be the same as the U.S. Holder’s tax basis in the distributed assets immediately prior to the distribution, and the U.S. Holder’s tax basis in its pro rata share of the Trust’s remaining assets will not include the amount of such basis. Immediately after any such distribution, the U.S. Holder’s holding period with respect to the distributed Incidental Rights or IR Virtual Currency will be the same as the U.S. Holder’s holding period with respect to the distributed assets immediately prior to the distribution. A subsequent sale of the distributed Incidental Rights or IR Virtual Currency will generally be a taxable event for a U.S. Holder.

For simplicity of presentation, the remainder of this discussion assumes that the Trust will hold only XLM. However, the principles set forth in the discussion below apply to all of the assets that the Trust may hold at any time, including Incidental Rights and IR Virtual Currency, as well as XLM. Without limiting the generality of the foregoing, each beneficial owner of Shares generally will be treated for U.S. federal income tax purposes as owning an undivided interest in any Incidental Rights and/or IR Virtual Currency held in the Trust, and any transfers or sales of Incidental Rights and/or IR Virtual Currency by the Trust (other than distributions by the Trust, as described in the preceding paragraph) will be taxable events to shareholders with respect to which shareholders will generally recognize gain or loss in a manner similar to the recognition of gain or loss on a taxable disposition of XLM, as described below.

As used herein, the term “U.S. Holder” means a beneficial owner of a Share for U.S. federal income tax purposes that is:

Except as specifically noted, the discussion below assumes that each U.S. Holder will acquire all of its Shares on the same date for the same price per Share and either solely for cash or solely for XLM that were originally acquired by the U.S. Holder for cash on the same date.

As discussed in the section entitled “Description of Creation of Shares,” a U.S. Holder may be able to acquire Shares of the Trust by contributing XLM in-kind to the Trust (either directly or through an Authorized Participant acting as agent of the U.S. Holder). Assuming that the Trust is properly treated as a grantor trust for U.S. federal income tax purposes, such a contribution should not be a taxable event to the U.S. Holder.

For U.S. federal income tax purposes, each U.S. Holder will be treated as owning an undivided interest in the XLM held in the Trust and will be treated as directly realizing its pro rata share of the Trust’s income, gains, losses and deductions. When a U.S. Holder purchases Shares solely for cash, (i) the U.S. Holder’s initial tax basis in its pro rata share of the XLM held in the Trust will be equal to the amount paid for the Shares and (ii) the U.S. Holder’s holding period for its pro rata share of such XLM will begin on the date of such purchase. When a U.S. Holder acquires Shares in exchange for XLM, (i) the U.S. Holder’s initial tax basis in its pro rata share of the XLM held in the Trust will be equal to the U.S. Holder’s tax basis in the XLM that the U.S. Holder transferred to the Trust and (ii) the U.S. Holder’s holding period for its pro rata share of such XLM generally will include the period during which the U.S. Holder held the XLM that the U.S. Holder transferred to the Trust. The Ruling & FAQs confirm that if a taxpayer acquires tokens of a digital asset at different times and for different prices, the taxpayer has a separate tax basis in each lot of such tokens. Under the Ruling & FAQs, if a U.S. Holder that owns more than one lot of XLM contributes a portion of its XLM to the Trust in exchange for Shares, the U.S. Holder may designate the lot(s) from which such contribution will be made, provided that the U.S. Holder is able to identify specifically which XLM it is contributing and to substantiate its tax basis in those XLM. In general, if a U.S. Holder acquires Shares (i) solely for cash at different prices, (ii) partly for cash and partly in exchange for a contribution of XLM or (iii) in exchange for a contribution of XLM with different tax bases, the U.S. Holder’s share of the Trust’s XLM will consist of separate lots with separate tax bases. In addition, in this situation, the U.S. Holder’s holding period for the separate lots may be different. In addition, the IR Virtual Currency that the Trust acquires in a hard fork or airdrop that is treated as a taxable event will constitute a separate lot with a separate tax basis and holding period.

When the Trust transfers XLM to the Sponsor as payment of the Sponsor’s Fee, or sells XLM to fund payment of any Additional Trust Expenses, each U.S. Holder will be treated as having sold its pro rata share of those XLM for their fair market value at that time (which, in the case of XLM sold by the Trust, generally will be equal to the cash proceeds received by the Trust in respect thereof). As a result, each U.S. Holder will recognize gain or loss in an amount equal to the difference between (i) the fair market value of the U.S. Holder’s pro rata share of the XLM transferred and (ii) the U.S. Holder’s tax basis for its pro rata share of the XLM transferred. Any such gain or loss will be short-term capital gain or loss if the U.S. Holder’s holding period for its pro rata share of the XLM is one year or less and long-term capital gain or loss if the U.S. Holder’s holding period for its pro rata share of the XLM is more than one year. A U.S. Holder’s tax basis in its pro rata share of any XLM transferred by the Trust generally will be determined by multiplying the tax basis of the U.S. Holder’s pro rata share of all of the XLM held in the Trust immediately prior to the transfer by a fraction the numerator of which is the amount of XLM transferred and the denominator of which is the total amount of XLM held in the Trust immediately prior to the transfer. Immediately after the transfer, the U.S. Holder’s tax basis in its pro rata share of the XLM remaining in the Trust will be equal to the tax basis of its pro rata share of the XLM held in the Trust immediately prior to the transfer, less the portion of that tax basis allocable to its pro rata share of the XLM transferred.

As noted above, the IRS has taken the position in the Ruling & FAQs that, under certain circumstances, a hard fork of a digital asset constitutes a taxable event giving rise to ordinary income, and it is clear from the reasoning of the Ruling & FAQs that the IRS generally would treat an airdrop as a taxable event giving rise to ordinary income. Under the Ruling & FAQs, a U.S. Holder will have a basis in any IR Virtual Currency received in a fork or airdrop equal to the amount of income the U.S. Holder recognizes as a result of such fork or airdrop and the U.S. Holder’s holding period for such IR Virtual Currency will begin as of the time it recognizes such income.

U.S. Holders’ pro rata shares of the expenses incurred by the Trust will be treated as “miscellaneous itemized deductions” for U.S. federal income tax purposes. As a result, for taxable years beginning after December 31, 2017 and before January 1, 2026, a non-corporate U.S. Holder’s share of these expenses will not be deductible for U.S. federal income tax purposes. For taxable years beginning on or after January 1, 2026, a non-corporate U.S. Holder’s share of these expenses will be deductible for regular U.S. federal income tax purposes only to the extent that the U.S. Holder’s share of the expenses, when combined with other “miscellaneous itemized deductions,” exceeds 2% of the U.S. Holder’s adjusted gross income for the particular year, will not be deductible for U.S. federal alternative minimum tax purposes and will be subject to certain other limitations on deductibility.

On a sale or other disposition of Shares, a U.S. Holder will be treated as having sold the XLM underlying such Shares. Accordingly, the U.S. Holder generally will recognize gain or loss in an amount equal to the difference between (i) the amount realized on the sale of the Shares and (ii) the portion of the U.S. Holder’s tax basis in its pro rata share of the XLM held in the Trust that is attributable to the Shares that were sold or otherwise subject to a disposition. Such tax basis generally will be determined by multiplying

the tax basis of the U.S. Holder’s pro rata share of all of the XLM held in the Trust immediately prior to such sale or other disposition by a fraction the numerator of which is the number of Shares disposed of and the denominator of which is the total number of Shares held by such U.S. Holder immediately prior to such sale or other disposition (such fraction, expressed as a percentage, the “Share Percentage”). If the U.S. Holder’s share of the Trust’s XLM consists of separate lots with separate tax bases and/or holding periods, the U.S. Holder will be treated as having sold the Share Percentage of each such lot. Gain or loss recognized by a U.S. Holder on a sale or other disposition of Shares will generally be short-term capital gain or loss if the U.S. Holder’s holding period for the XLM underlying such Shares is one year or less and long-term capital gain or loss if the U.S. Holder’s holding period for the XLM underlying such Shares is more than one year. The deductibility of capital losses is subject to significant limitations.

After any sale or other disposition of fewer than all of a U.S. Holder’s Shares, the U.S. Holder’s tax basis in its pro rata share of the XLM held in the Trust immediately after the disposition will equal the tax basis in its pro rata share of the total amount of the XLM held in the Trust immediately prior to the disposition, less the portion of that tax basis that is taken into account in determining the amount of gain or loss recognized by the U.S. Holder on the disposition.

Any brokerage or other transaction fee incurred by a U.S. Holder in purchasing Shares generally will be added to the U.S. Holder’s tax basis in the underlying assets of the Trust. Similarly, any brokerage fee or other transaction fee incurred by a U.S. Holder in selling Shares generally will reduce the amount realized by the U.S. Holder with respect to the sale.

In the absence of guidance to the contrary, it is possible that any income recognized by a U.S. tax-exempt shareholder as a consequence of a hard fork, airdrop or similar occurrence would constitute UBTI. A tax-exempt shareholder should consult its tax adviser regarding whether such shareholder may recognize some UBTI as a consequence of an investment in Shares.

As used herein, the term “non-U.S. Holder” means a beneficial owner of a Share for U.S. federal income tax purposes that is not a U.S. Holder. The term “non-U.S. Holder” does not include (i) a nonresident alien individual who is present in the United States for 183 days or more in a taxable year, (ii) a former U.S. citizen or U.S. resident or an entity that has expatriated from the United States; (iii) a person whose income in respect of Shares is effectively connected with the conduct of a trade or business in the United States; or (iv) an entity that is treated as a partnership for U.S. federal income tax purposes. Shareholders described in the preceding sentence should consult their tax advisers regarding the U.S. federal income tax consequences of owning Shares.

A non-U.S. Holder generally will not be subject to U.S. federal income or withholding tax with respect to its share of any gain recognized on the Trust’s transfer of XLM in payment of the Sponsor’s Fee or any Additional Trust Expense or on the Trust’s sale or other disposition of XLM. In addition, assuming that the Trust holds no asset other than XLM, a non-U.S. Holder generally will not be subject to U.S. federal income or withholding tax with respect to any gain it recognizes on a sale or other disposition of Shares. A non-U.S. Holder also will generally not be subject to U.S. federal income or withholding tax with respect to any distribution received from the Trust, whether in cash or in-kind.

Provided that it does not constitute income that is treated as “effectively connected” with the conduct of a trade or business in the United States, U.S.-source “fixed or determinable annual or periodical” (“FDAP”) income received, or treated as received, by a non-U.S. Holder will generally be subject to U.S. withholding tax at the rate of 30% (subject to possible reduction or elimination pursuant to an applicable tax treaty and to statutory exemptions such as the portfolio interest exemption). Although there is no guidance on point, it is likely that any ordinary income recognized by a non-U.S. Holder as a result of a fork, airdrop or similar occurrence would constitute FDAP income. It is unclear, however, whether any such FDAP income would be properly treated as U.S.-source or foreign-source FDAP income. Non-U.S. Holders should assume that, in the absence of guidance, a withholding agent (including the Sponsor) is likely to withhold 30% from a non-U.S. Holder’s pro rata share of any such income, including by deducting such withheld amounts from proceeds that such non-U.S. Holder would otherwise be entitled to receive in connection with a distribution of Incidental Rights, IR Virtual Currency or proceeds from the disposition of Incidental Rights or IR Virtual Currency. A non-U.S. Holder that is a resident of a country that maintains an income tax treaty with the United States may be eligible to claim the benefits of that treaty to reduce or eliminate, or to obtain a partial or full refund of, the 30% U.S. withholding tax on its share of any such income, but only if the non-U.S. Holder’s home country treats the Trust as “fiscally transparent,” as defined in applicable Treasury regulations.

Although the nature of the Incidental Rights and IR Virtual Currency that the Trust may hold in the future is uncertain, it is unlikely that any such asset would give rise to income that is treated as “effectively connected” with the conduct of a trade or business in the United States or that any income derived by a non-U.S. Holder from any such asset would otherwise be subject to U.S. income or withholding tax, except as discussed above in connection with the fork, airdrop or similar occurrence giving rise to Incidental Rights or IR Virtual Currency. There can, however, be no complete assurance in this regard.

In order to prevent the possible imposition of U.S. “backup” withholding and (if applicable) to qualify for a reduced rate of withholding tax at source under a treaty, a non-U.S. Holder must comply with certain certification requirements (generally, by delivering a properly executed IRS Form W-8BEN or W-8BEN-E to the relevant withholding agent).

The Trust or the appropriate broker will file certain information returns with the IRS and provide shareholders with information regarding their annual income (if any) and expenses with respect to the Trust in accordance with applicable Treasury regulations.

A U.S. Holder will generally be subject to information reporting requirements and backup withholding unless (i) the U.S. Holder is a corporation or other exempt recipient or (ii) in the case of backup withholding, the U.S. Holder provides a correct taxpayer identification number and certifies that it is not subject to backup withholding. In order to avoid the information reporting and backup withholding requirements, a non-U.S. Holder may have to comply with certification procedures to establish that it is not a U.S. person. The amount of any backup withholding will be allowed as a credit against the shareholder’s U.S. federal income tax liability and may entitle the holder to a refund, provided that the required information is furnished to the IRS.

As discussed above, it is unclear whether any ordinary income recognized by a non-U.S. Holder as a result of a fork, airdrop or similar occurrence would constitute U.S.-source FDAP income. Provisions of the Code commonly referred to as “FATCA” require withholding of 30% on payments of U.S.-source FDAP income and, subject to the discussion of proposed U.S. Treasury regulations below, of gross proceeds of dispositions of certain types of property that produce U.S.-source FDAP income to, “foreign financial institutions” (which is broadly defined for this purpose and in general includes investment vehicles) and certain other non-U.S. entities unless various U.S. information reporting and due diligence requirements (generally relating to ownership by U.S. persons of interests in or accounts with those entities) have been satisfied, or an exemption applies. An intergovernmental agreement between the United States and an applicable foreign country may modify these requirements. In addition, regulations proposed by the U.S. Treasury Department (the preamble to which indicates that taxpayers may rely on the regulations pending their finalization) would eliminate the requirement under FATCA of withholding on gross proceeds. If FATCA withholding is imposed, a beneficial owner that is not a foreign financial institution generally may obtain a refund of any amounts withheld by filing a U.S. federal income tax return (which may entail significant administrative burden). Shareholders should consult their tax advisers regarding the effects of FATCA on an investment in the Trust.

The following section sets forth certain consequences under ERISA and the Code which a fiduciary of an “employee benefit plan” as defined in and subject to the fiduciary responsibility provisions of ERISA, or of a “plan” as defined in and subject to Section 4975 of the Code, who has investment discretion should consider before deciding to acquire Shares with plan assets (such “employee benefit plans” and “plans” being referred to herein as “Plans,” and such fiduciaries with investment discretion being referred to herein as “Plan Fiduciaries”). The following summary is not intended to be complete, but only to address certain questions under ERISA and the Code that are likely to be raised by the Plan Fiduciary’s own counsel.

In general, the terms “employee benefit plan” as defined in ERISA and “plan” as defined in Section 4975 of the Code together refer to any plan or account of various types which provides retirement benefits or welfare benefits to an individual or to an employer’s employees and their beneficiaries. Such plans and accounts include, but are not limited to, corporate pension and profit sharing plans, “simplified employee pension plans,” Keogh plans for self-employed individuals (including partners), individual retirement accounts described in Section 408 of the Code and medical benefit plans.

Each Plan Fiduciary must give appropriate consideration to the facts and circumstances that are relevant to an investment in the Trust, including the role an investment in the Trust plays in the Plan’s investment portfolio. Each Plan Fiduciary must be satisfied that investment in the Trust is a prudent investment for the Plan, that the investments of the Plan, including the investment in the Trust, are diversified so as to minimize the risks of large losses and that an investment in the Trust complies with the documents of the Plan and related trust and that an investment in the Trust does not give rise to a transaction prohibited by Section 406 of ERISA or Section 4975 of the Code.

Governmental plans, non-U.S. plans and certain church plans (collectively, “Non-ERISA Arrangements”), while generally not subject to the fiduciary responsibility or prohibited transaction provisions of ERISA or Section 4975 of the Code, may be subject to provisions under other U.S. or non-U.S. federal, state, local or other laws or regulations that are similar to such provisions of ERISA or the Code. Fiduciaries of such plans should consider the consequences of an investment in the Trust under any such applicable similar laws or regulations before acquiring any Shares.

EACH PLAN FIDUCIARY OR FIDUCIARY OF A NON-ERISA ARRANGEMENT CONSIDERING ACQUIRING SHARES MUST CONSULT ITS OWN LEGAL AND TAX ADVISERS BEFORE DOING SO.

ERISA and a regulation issued thereunder contain rules for determining when an investment by a Plan in an entity will result in the underlying assets of the entity being deemed assets of the Plan for purposes of ERISA and Section 4975 of the Code (i.e., “plan assets”). Those rules provide that the assets of an entity will not be deemed “plan assets” of a Plan that purchases an interest therein if the investment in the entity by all “benefit plan investors” is not “significant” or certain other exceptions apply. The term “benefit plan investors” includes all Plans (i.e., all “employee benefit plans” as defined in and subject to the fiduciary responsibility provisions of ERISA and all “plans” as defined in and subject to Section 4975 of the Code) and all entities that hold “plan assets” (each, a “Plan Assets Entity”) due to investments made in such entities by already described benefit plan investors. ERISA provides that a Plan Assets Entity is considered to hold plan assets only to the extent of the percentage of the Plan Assets Entity’s equity interests held by benefit plan investors. In addition, all or part of an investment made by an insurance company using assets from its general account may be treated as a benefit plan investor. Investments by benefit plan investors will be deemed not significant if benefit plan investors own, in the aggregate, less than 25% of the total value of each class of equity interests of the entity (determined by not including the investments of persons with discretionary authority or control over the assets of such entity, of any person who provides investment advice for a fee (direct or indirect) with respect to such assets, and “affiliates” (as defined in the regulations issued under ERISA) of such persons; provided, however, that under no circumstances are investments by benefit plan investors excluded from such calculation).

In order to avoid causing assets of the Trust to be “plan assets,” the Sponsor intends to restrict the aggregate investment by “benefit plan investors” to under 25% of the total value of the Shares of the Trust (not including the investments of the Trustee, the Sponsor, the distributor, any other person who provides investment advice for a fee (direct or indirect) with respect to the assets of the Trust, any other person who has discretionary authority or control over the assets of the Trust, and any entity (other than a benefit plan investor) that is directly or indirectly through one or more intermediaries controlling, controlled by or under common control with any of such entities (including a partnership or other entity for which the Sponsor is the general partner, managing member, investment adviser or provides investment advice), and each of the principals, officers, and employees of any of the foregoing entities who has the power to exercise a controlling influence over the management or policies of such entity or the Trust). Furthermore, because the 25% test is ongoing, it not only restricts additional investments by benefit plan investors, but also can cause the Sponsor to require that existing benefit plan investors redeem from the Trust in the event that other investors redeem their Shares. If rejection of subscriptions or such compulsory redemptions are necessary, as determined by the Sponsor, to avoid causing the assets of the Trust to be “plan assets,” the Sponsor will effect such rejections or redemptions in such manner as the Sponsor, in its sole discretion, determines.

In general, Shares may not be purchased with the assets of a Plan if the Trustee, the Sponsor, the distributor, any placement agent, any of their respective affiliates or any of their respective employees either: (i) has investment discretion with respect to the investment of such Plan assets; (ii) has authority or responsibility to give or regularly gives investment advice with respect to such Plan assets, for a fee, and pursuant to an agreement or understanding that such advice will serve as a primary basis for investment decisions with respect to such Plan assets and that such advice will be based on the particular investment needs of the Plan; or (iii) is an employer maintaining or contributing to such Plan. A party that is described in clause (i) or (ii) of the preceding sentence is a fiduciary under ERISA and the Code with respect to the Plan, and any such purchase (as described in clause (i), (ii) or (iii)) could result in a “prohibited transaction” under ERISA and the Code.

Except as otherwise set forth, the foregoing statements regarding the consequences under ERISA and the Code of an investment in the Trust are based on the provisions of ERISA and the Code as currently in effect, and the existing administrative and judicial interpretations thereunder. No assurance can be given that administrative, judicial or legislative changes will not occur that may make the foregoing statements incorrect or incomplete.

ACCEPTANCE OF SUBSCRIPTIONS ON BEHALF OF PLANS IS IN NO RESPECT A REPRESENTATION BY THE SPONSOR OR ANY OTHER PARTY RELATED TO THE TRUST THAT THIS INVESTMENT MEETS THE RELEVANT LEGAL REQUIREMENTS WITH RESPECT TO INVESTMENTS BY ANY PARTICULAR PLAN OR NON-ERISA ARRANGEMENT OR PLANS OR NON-ERISA ARRANGEMENTS GENERALLY, OR THAT THIS INVESTMENT IS APPROPRIATE FOR ANY PARTICULAR PLAN OR NON-ERISA ARRANGEMENT OR PLANS OR NON-ERISA ARRANGEMENTS GENERALLY. THE PERSON WITH INVESTMENT DISCRETION FOR ANY PLAN OR NON-ERISA ARRANGEMENT SHOULD CONSULT WITH ITS OWN COUNSEL AND ADVISERS AS TO THE PROPRIETY OF AN INVESTMENT IN THE TRUST, IN LIGHT OF THE CIRCUMSTANCES OF THE PARTICULAR PLAN OR NON-ERISA ARRANGEMENT. NEITHER THIS DISCUSSION NOR ANYTHING IN THIS ANNUAL REPORT IS OR IS INTENDED TO BE INVESTMENT ADVICE DIRECTED AT ANY POTENTIAL PURCHASER THAT IS A PLAN OR NON-ERISA ARRANGEMENT, OR AT SUCH PURCHASERS GENERALLY.

Below is a summary of the principal factors that make an investment in the Shares speculative or risky. This summary does not address all of the risks that we face. Additional discussion of the risks summarized in this risk factor summary, and other risks that we face, can be found below and should be read in conjunction with the other information included in this Annual Report on Form 10-K, including the Trust’s financial statements and related notes thereto, and our other filings with the SEC, before making an investment decision regarding the Shares. See “Glossary of Defined Terms” for the definition of certain capitalized terms used in this Annual Report. All other capitalized terms used, but not defined, herein have the meanings given to them in the Trust Agreement.

The following risks, some of which have occurred and any of which may occur in the future, can have a material adverse effect on our business or financial performance, which in turn can affect the price of the Shares. These are not the only risks we face. There may be other risks we are not currently aware of or that we currently deem not to be material but may become material in the future.

The trading prices of many digital assets, including XLM, have experienced extreme volatility in recent periods and may continue to do so. Extreme volatility in the future, including declines in the trading prices of XLM, could have a material adverse effect on the value of the Shares and the Shares could lose all or substantially all of their value.

The trading prices of many digital assets, including XLM, have experienced extreme volatility throughout their existence, including in recent periods and may continue to do so. For instance, following significant increases throughout the majority of 2020, digital asset prices, including XLM, experienced significant volatility throughout 2021 and 2022. This volatility became extreme in November 2022 when FTX, then a major Digital Asset Trading Platform, halted customer withdrawals. See “—Recent developments in the digital asset economy have led to extreme volatility and disruption in digital asset markets, a loss of confidence in participants of the digital asset ecosystem, significant negative publicity surrounding digital assets broadly and market-wide declines in liquidity.” Digital asset prices, including XLM, have continued to fluctuate widely throughout 2024 and through the date of this Annual Report.

Extreme volatility in the future, including declines in the trading prices of XLM, could have a material adverse effect on the value of the Shares and the Shares could lose all or substantially all of their value. Furthermore, negative perception, a lack of stability and standardized regulation in the digital asset economy may reduce confidence in the digital asset economy and may result in greater volatility in the price of XLM and other digital assets, including a depreciation in value. The Trust is not actively managed and will not take any actions to take advantage, or mitigate the impacts, of volatility in the price of XLM. For additional information that quantifies the volatility of XLM prices and the value of the Shares, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Historical NAV and XLM Prices.”

Digital assets such as XLM were only introduced within the past two decades, and the medium-to-long term value of the Shares is subject to a number of factors relating to the capabilities and development of blockchain technologies, such as the recentness of their development, their dependence on the internet and other technologies, their dependence on the role played by users, developers and validators and the potential for malicious activity. For example, the realization of one or more of the following risks could materially adversely affect the value of the Shares:

Moreover, because digital assets, including XLM, have existed for a short period of time and are continuing to be developed, there may be additional risks to digital asset networks and related protocols that are impossible to predict as of the date of this Annual Report.

Digital assets represent a new and rapidly evolving industry, and the value of the Shares depends on the acceptance of XLM.

The first digital asset, Bitcoin, was launched in 2009. In general, digital asset networks, including the Stellar Network and related protocols represent a new and rapidly evolving industry that is subject to a variety of factors that are difficult to evaluate. For example, the realization of one or more of the following risks could materially adversely affect the value of the Shares:

Users, developers and validators may otherwise switch to or adopt certain digital asset networks or protocols at the expense of their engagement with other digital asset networks, which may negatively impact those networks and protocols, including the Stellar

Network. In addition, unlike other digital assets, the SDF retains a central role in stewarding the development of the Stellar Network by managing the supply and distribution of XLM. Because XLM distributions are managed by SDF unilaterally, it is possible SDF could decide to deviate from the planned distributions they have announced. Any inconsistencies or deviations from planned XLM distributions by SDF may undermine confidence in or challenge the future development of the Stellar Network. For example, if developers on the Stellar Network are concerned about actual or perceived inconsistencies in distributions, they may be less willing to commit resources to improving the Stellar Network. In addition, there are only approximately 69 validator nodes and approximately 96 “watcher” nodes as of September 30, 2024, as compared to thousands of independent nodes on the Bitcoin and Ethereum networks, which may lead to further centralization of the Stellar Network. Watcher nodes are nodes that keep track of the ledger and may submit transactions for validation, but which are not themselves participants in validating or publishing validated transactions to the Stellar Network or securing the Stellar Network. Any perception that the Stellar Network is not sufficiently decentralized may have an adverse effect on the adoption of the Stellar Network and the value of XLM. For example, users may believe Stellar Network governance decisions result from coordination among validators who may have different interests than users. If any perception that the Stellar Network is not sufficiently decentralized negatively impacts usage of the network, it would have a negative impact on the value of XLM and in turn the Shares.

Smart contracts are a new technology and ongoing development may magnify initial problems, cause volatility on the networks that use smart contracts and reduce interest in them, which could have an adverse impact on the value of XLM.

Smart contracts are programs that run on a blockchain that execute automatically when certain conditions are met. Since smart contracts typically cannot be stopped or reversed, vulnerabilities in their programming can have damaging effects. For example, in June 2016, a vulnerability in the smart contracts underlying The DAO, a distributed autonomous organization for venture capital funding, allowed an attack by a hacker to syphon approximately $60 million worth of Ether from The DAO’s accounts into a segregated account. In the aftermath of the theft, certain developers and core contributors pursued a “hard fork” of the Ethereum network in order to erase any record of the theft. Despite these efforts, the price of Ether dropped approximately 35% in the aftermath of the attack and subsequent hard fork. In addition, in July 2017, a vulnerability in a smart contract for a multi-signature wallet software developed by Parity led to a $30 million theft of Ether, and in November 2017, a new vulnerability in Parity’s wallet software led to roughly $160 million worth of Ether being indefinitely frozen in an account. Other smart contracts, such as bridges between blockchain networks and DeFi protocols have also been manipulated, exploited or used in ways that were not intended or envisioned by their creators such that attackers syphoned over $3.8 billion worth of digital assets from smart contracts in 2022. Initial problems and continued problems with the development, design and deployment of smart contracts may have an adverse effect on the value of XLM, which could have a negative impact on the value of the Shares.

Changes in the governance of a digital asset network or protocol may not receive sufficient support from users and validators, which may negatively affect that digital asset network’s or protocol’s ability to grow and respond to challenges.

The governance of some digital asset networks and protocols, such as the Stellar Network, is generally by voluntary consensus and open competition. For such networks and protocols, there may be a lack of consensus or clarity on that network’s or protocol’s governance, which may stymie such network’s or protocol’s utility, adaptability and ability to grow and face challenges.

The foregoing notwithstanding, the underlying software for some digital asset networks and protocols, such as the Stellar Network is informally or formally managed or developed by a group of core developers that propose amendments to the relevant network’s or protocol’s source code. Core developers’ roles may evolve over time, generally based on self-determined participation. If a significant majority of users and validators were to adopt amendments to the Stellar Network based on the proposals of such core developers, the Stellar Network would be subject to new source code that may adversely affect the value of XLM.

As a result of the foregoing, it may be difficult to find solutions or marshal sufficient effort to overcome any future problems, especially long-term problems, on digital asset networks.

Digital asset networks face significant scaling challenges and efforts to increase the volume and speed of transactions may not be successful.

Many digital asset networks face significant scaling challenges due to the fact that public, permissionless blockchains generally face a tradeoff between security and scalability. One means through which digital asset networks that utilize public, permissionless blockchains achieve security is decentralization, meaning that no intermediary is responsible for securing and maintaining these systems. For example, a greater degree of decentralization of a public, permissionless blockchain generally means a given digital asset network is less susceptible to manipulation or capture. In practice, this typically means that every single node on a given digital asset network is responsible for securing the system by processing every transaction and maintaining a copy of the entire state of the network. As a result, a digital asset network that utilizes a public, permissionless blockchain may be limited in the number of transactions it can process by the computing capabilities of each single fully participating node. Many developers are actively researching and testing scalability solutions for public blockchains that do not necessarily result in lower levels of security or decentralization, such as off-chain payment channels and Layer 2 networks. Off-chain payment channels would allow parties to transact without requiring the full processing power

of a blockchain. Layer 2 networks can increase the scalability of a blockchain by allowing users to transact on a second blockchain deployed on top of a “Layer 1” network.

As of September 30, 2024, the Stellar Network handled approximately 21.4 transactions per second. In an effort to increase the volume of transactions that can be processed on a given digital asset network, many digital assets are being upgraded with various features to increase the speed and throughput of digital asset transactions. For example, in August 2017, the Bitcoin Network was upgraded with a technical feature known as “Segregated Witness” that potentially doubles the transactions per second that can be handled on-chain. More importantly, Segregated Witness also enables so-called second layer solutions, such as the Lightning Network, or payment channels that greatly increase transaction throughput (i.e., millions of transactions per second). Wallets and “intermediaries,” or connecting nodes that facilitate payment channels, that support Segregated Witness or Lightning Network-like technologies have not seen wide-scale use as of September 30, 2024. Additionally, questions remain regarding Lightning Network services, such as its cost and who will serve as intermediaries.

As corresponding increases in throughput lag behind growth in the use of digital asset networks, average transaction fees and settlement times may increase considerably. For example, the Bitcoin Network has been, at times, at capacity, which has led to increased transaction fees. Since January 1, 2021, Bitcoin average daily transaction fees have ranged from $0.38 per transaction, on September 8, 2024, to as high as $124.17 per transaction, on April 20, 2024. As of September 30, 2024, Bitcoin average daily transaction fees stood at $0.79 per transaction. Since January 1, 2021, Stellar Network average daily transaction fees have ranged from $0.000003 per transaction, on January 1, 2021, to a high as $0.001832 per transaction, on December 15, 2021. As of September 30, 2024, XLM average daily transaction fees stood at $0.000023 per transaction. Increased transaction fees and decreased settlement speeds could preclude certain uses for XLM (e.g., micropayments), and could reduce demand for, and the price of, XLM, which could adversely impact the value of the Shares.

There is no guarantee that any of the mechanisms in place or being explored for increasing the scale of settlement or throughput of Stellar Network transactions will be effective, or how long these mechanisms will take to become effective, which could adversely impact the value of the Shares.

Digital asset networks are developed by a diverse set of contributors and the perception that certain high-profile contributors will no longer contribute to the network could have an adverse effect on the market price of the related digital asset.

Digital asset networks and related protocols are often developed by a diverse set of contributors, but are also often developed by identifiable and high-profile contributors. The perception that certain high-profile contributors may no longer contribute to the applicable digital asset network or protocol may have an adverse effect on the market price of any related digital assets. For example, in June 2017, an unfounded rumor circulated that Ethereum protocol developer Vitalik Buterin had died. Following the rumor, the price of Ether decreased approximately 20% before recovering after Buterin himself dispelled the rumor. Some have speculated that the rumor led to the decrease in the price of Ether. In the event a high-profile contributor to the Stellar Network is perceived as no longer contributing to the Stellar Network due to death, retirement, withdrawal, incapacity, or otherwise, whether or not such perception is valid, it could negatively affect the price of XLM, which could adversely impact the value of the Shares.

Digital assets may have concentrated ownership and large sales or distributions by holders of such digital assets, or any ability to participate in or otherwise influence a digital asset’s underlying network, could have an adverse effect on the market price of such digital asset.

As of the date of this Annual Report, the largest 100 XLM wallets held approximately 61% of the XLM in circulation, not including wallets held by SDF, which are considered illiquid, and approximately 76% of the XLM in circulation, including wallets held by SDF. As of the date of this Annual Report, approximately 19.8 billion XLM remained in wallets belonging to SDF. Moreover, it is possible that other persons or entities control multiple wallets that collectively hold a significant amount of XLM, even if they individually only hold a small amount, and it is possible that some of these wallets are controlled by the same person or entity. As a result of this concentration of ownership, large sales or distributions by such holders could have an adverse effect on the market price of XLM.

If the transaction fees for recording transactions on the Stellar Network are not sufficiently high to incentivize validators, or if certain jurisdictions continue to limit or otherwise regulate validating activities, validators may cease expanding processing power or demand high transaction fees, and any loss of validators could raise concerns around centralization, which could negatively impact the value of XLM and the value of the Shares.

Unlike miners of Bitcoin and certain other digital assets, validators on the Stellar Network do not receive digital assets as a reward for validating blocks. Instead, validators are incentivized to validate blocks because by doing so they earn a share of Stellar Network transaction fees. If the transaction fees for recording transactions on the Stellar Network are not sufficiently high to incentivize validators, or if certain jurisdictions continue to limit or otherwise regulate validating activities, validators may cease expending processing power to validate blocks and confirmations of transactions on the Stellar Ledger could be slowed. For example, the realization of one or more of the following risks could materially adversely affect the value of the Shares:

If a malicious actor or botnet obtains control of more than 50% of the processing power on the Stellar Network, or otherwise obtains control over the Stellar Network through its influence over core developers or otherwise, such actor or botnet could manipulate the Blockchain to adversely affect the value of the Shares or the ability of the Trust to operate.

If a malicious actor or botnet (a volunteer or hacked collection of computers controlled by networked software coordinating the actions of the computers) obtains a majority of the processing power dedicated to validating on the Stellar Network, it may be able to alter the Blockchain on which transactions in XLM rely by constructing fraudulent blocks or preventing certain transactions from completing in a timely manner, or at all. The malicious actor or botnet could also control, exclude or modify the ordering of transactions. Although the malicious actor or botnet may not be able to generate new digital assets or transactions using such control, it may be able to “double-spend” its own digital assets (i.e., spend the same tokens in more than one transaction) and prevent the confirmation of other users’ transactions for so long as it maintained control. To the extent that such malicious actor or botnet did not yield its control of the processing power on the Stellar Network or the XLM community did not reject the fraudulent blocks as malicious, reversing any changes made to the Blockchain may not be possible. Further, a malicious actor or botnet could create a flood of transactions in order to slow down the Stellar Network.

For example, in August 2020, the Ethereum Classic network was the target of two double-spend attacks by an unknown actor or actors that gained more than 50% of the processing power of the Ethereum Classic network. The attack resulted in reorganizations of the Ethereum Classic blockchain that allowed the attacker or attackers to reverse previously recorded transactions in excess of over $5.0 million and $1.0 million. Any similar attacks on the Stellar Network could negatively impact the value of XLM and the value of the Shares.

Although there are no known reports of malicious activity on, or control of, the Stellar Network, it is believed that certain validating pools may have exceeded the 50% threshold on the Stellar Network. The crossing of the 50% threshold indicates a greater risk that a single validating pool or small group of validating pools, for example, could exert authority over the validation of XLM transactions, and this risk is heightened if over 50% of the processing power on the network falls within the jurisdiction of a single governmental authority. If network participants, including the core developers and the administrators of validating pools, do not act to ensure greater decentralization of XLM validating processing power, the feasibility of a malicious actor obtaining control of the processing power on the Stellar Network will increase, which may adversely affect the value of the Shares.

A malicious actor may also obtain control over the Stellar Network through its influence over core developers by gaining direct control over a core developer or an otherwise influential programmer. To the extent that the XLM ecosystem does not grow, the possibility that a malicious actor may be able to maliciously influence the Stellar Network in this manner will remain heightened.

A temporary or permanent “fork” or a “clone” could adversely affect the value of the Shares.

The Stellar Network operates using open-source protocols, meaning that any user can download the software, modify it and then propose that the users and validators of XLM adopt the modification. When a modification is introduced and a substantial majority of users and validators’ consent to the modification, the change is implemented and the network remains uninterrupted. However, if less than a substantial majority of users and validators’ consent to the proposed modification, and the modification is not compatible with the software prior to its modification, the consequence would be what is known as a “hard fork” of the Stellar Network, with one group running the pre-modified software and the other running the modified software. The effect of such a fork would be the existence of two versions of XLM running in parallel, yet lacking interchangeability. For example, Bitcoin Cash is the result of a hard fork of Bitcoin. Some users of the original network may harbor ill will toward the Bitcoin Cash network, and vice versa. These users may attempt to negatively impact the use or adoption of the Bitcoin Cash network. A fork may also occur as a result of an unintentional or unanticipated software flaw in the various versions of otherwise compatible software that users run. Such a fork could lead to users and validators abandoning the digital asset with the flawed software. It is possible, however, that a substantial number of users and validators could adopt an incompatible version of the digital asset while resisting community-led efforts to merge the two chains. This could result in a permanent fork.

Forks may also occur as a digital asset network’s community’s response to a significant security breach. For example, in July 2016, Ethereum “forked” into Ethereum and a new digital asset, Ethereum Classic, as a result of the Ethereum network community’s response to a significant security breach. In June 2016, an anonymous hacker exploited a smart contract running on the Ethereum network to syphon approximately $60 million of Ether held by The DAO, a distributed autonomous organization, into a segregated account. In response to the exploit, most participants in the Ethereum community elected to adopt a “fork” that effectively reversed the exploit. However, a minority of users continued to develop the original blockchain, referred to as “Ethereum Classic” with the digital asset on that blockchain now referred to as ETC. ETC now trades on several Digital Asset Trading Platforms. A fork may also occur as a result of an unintentional or unanticipated software flaw in the various versions of otherwise compatible software that users run. Such a fork could lead to users and validators abandoning the digital asset with the flawed software. It is possible, however, that a substantial number of users and validators could adopt an incompatible version of the digital asset while resisting community-led efforts to merge the two chains. This could result in a permanent fork, as in the case of Ethereum and Ethereum Classic.

In addition, many developers have previously initiated hard forks in the Bitcoin blockchain to launch new digital assets, such as Bitcoin Cash, Bitcoin Gold, Bitcoin Silver and Bitcoin Diamond, as well as the Bitcoin Cash blockchain to launch a new digital asset, Bitcoin Satoshi’s Vision. To the extent such digital assets compete with XLM, such competition could impact demand for XLM and could adversely impact the value of the Shares.

In principle a fork could change the source code for the Stellar Network, including the source code which limits the total supply of XLM to approximately 50 billion. There is no guarantee that the approximately 50 billion of total supply for outstanding XLM will not be changed. If a fork changing the approximately 50 billion of total supply is widely adopted, the limit on the total supply of XLM could be lifted, which could have an adverse impact on the value of XLM and the value of the Shares.

Furthermore, a hard fork can lead to new security concerns. For example, when the Ethereum and Ethereum Classic networks, two other digital asset networks, split in July 2016, replay attacks, in which transactions from one network were rebroadcast to nefarious effect on the other network, plagued Ethereum trading platforms through at least October 2016. An Ethereum trading platform announced in July 2016 that it had lost 40,000 Ethereum Classic, worth about $100,000 at that time, as a result of replay attacks. Similar replay attack concerns occurred in connection with the Bitcoin Cash and Bitcoin Satoshi’s Vision networks split in November 2018. Another possible result of a hard fork is an inherent decrease in the level of security due to significant amounts of validating power remaining on one network or migrating instead to the new forked network. After a hard fork, it may become easier for an individual validator or validating pool’s hashing power to exceed 50% of the processing power of a digital asset network that retained or attracted less validating power, thereby making digital asset networks that rely on proof-of-work more susceptible to attack.

Digital asset networks and related protocols may also be cloned. Unlike a fork of a digital asset network, which modifies an existing blockchain, and results in two competing digital asset networks, each with the same genesis block, a “clone” is a copy of a protocol’s codebase, but results in an entirely new blockchain and new genesis block. Tokens are created solely from the new “clone” network and, in contrast to forks, holders of tokens of the existing network that was cloned do not receive any tokens of the new network. A “clone” results in a competing network that has characteristics substantially similar to the network it was based on, subject to any changes as determined by the developer(s) that initiated the clone.

A hard fork may adversely affect the price of XLM at the time of announcement or adoption. For example, the announcement of a hard fork could lead to increased demand for the pre-fork digital asset, in anticipation that ownership of the pre-fork digital asset would entitle holders to a new digital asset following the fork. The increased demand for the pre-fork digital asset may cause the price of the digital asset to rise. After the hard fork, it is possible the aggregate price of the two versions of the digital asset running in parallel would be less than the price of the digital asset immediately prior to the fork. Furthermore, while the Trust would be entitled to both versions

of the digital asset running in parallel, the Sponsor will, as permitted by the terms of the Trust Agreement, determine which version of the digital asset is generally accepted as the Stellar Network and should therefore be considered the appropriate network for the Trust’s purposes, and there is no guarantee that the Sponsor will choose the digital asset that is ultimately the most valuable fork. Either of these events could therefore adversely impact the value of the Shares. As an illustrative example of a digital asset hard fork, on November 15, 2020, certain Bitcoin Cash developers enacted a proposed update to the Bitcoin Cash network requiring 8% of mined tokens to be redistributed to the developer pool, causing a hard fork, and created a network with a token labeled BCHA. For the days following the fork, the price of BCH fluctuated from $246.15 on November 15, 2020 to $256.55 on November 20, 2020. A clone may also adversely affect the price of XLM at the time of announcement or adoption. For example, on November 6, 2016, Rhett Creighton, a Zcash developer, cloned the Zcash Network to launch Zclassic, a substantially identical version of the Zcash Network that eliminated the Founders’ Reward. For the days following the date the first Zclassic block was mined, the price of ZEC fell from $504.57 on November 5, 2016 to $236.01 on November 7, 2016 in the midst of a broader sell off of ZEC beginning immediately after the Zcash Network launch on October 28, 2016. A clone may also adversely affect the price of XLM at the time of announcement or adoption.

A future fork in or clone of the Stellar Network could adversely affect the value of the Shares or the ability of the Trust to operate.

In addition to forks, a digital asset may become subject to a similar occurrence known as an “airdrop.” In an airdrop, the promoters of a new digital asset announce to some group of users, such as the group that are holders of another digital asset, that such group will be entitled to claim a certain amount of the new digital asset for free, based on the fact that they are part of that group.

Shareholders may not receive the benefits of any forks, the Trust may not choose, or be able, to participate in an airdrop, and the timing of receiving any benefits from a fork, airdrop or similar event is uncertain. We refer to the right to receive any such benefit as an “Incidental Right” and any such virtual currency acquired through an Incidental Right as “IR Virtual Currency.” There are likely to be operational, tax, securities law, regulatory, legal and practical issues that significantly limit, or prevent entirely, shareholders’ ability to realize a benefit, through their Shares in the Trust, from any such Incidental Rights or IR Virtual Currency. For instance, the Custodian may not agree to provide access to the IR Virtual Currency. In addition, the Sponsor may determine that there is no safe or practical way to custody the IR Virtual Currency, or that trying to do so may pose an unacceptable risk to the Trust’s holdings in XLM, or that the costs of taking possession and/or maintaining ownership of the IR Virtual Currency exceed the benefits of owning the IR Virtual Currency. Additionally, laws, regulation or other factors may prevent shareholders from benefiting from the Incidental Right or IR Virtual Currency even if there is a safe and practical way to custody and secure the IR Virtual Currency. For example, it may be illegal to sell or otherwise dispose of the Incidental Right or IR Virtual Currency, or there may not be a suitable market into which the Incidental Right or IR Virtual Currency can be sold (immediately after the fork or airdrop, or ever). The Sponsor may also determine, in consultation with its legal advisers, that the Incidental Right or IR Virtual Currency is, or is likely to be deemed, a security under federal or state securities laws. In such a case, the Sponsor would irrevocably abandon, as of any date on which the Trust creates Shares, such Incidental Right or IR Virtual Currency if holding it would have an adverse effect on the Trust and it would not be practicable to avoid such effect by disposing of the Incidental Right or IR Virtual Currency in a manner that would result in shareholders receiving more than insignificant value thereof. In making such a determination, the Sponsor expects to take into account a number of factors, including the various definitions of a “security” under the federal securities laws and federal court decisions interpreting elements of these definitions, such as the U.S. Supreme Court’s decisions in the Howey and Reves cases, as well as reports, orders, press releases, public statements and speeches by the SEC and its staff providing guidance on when a digital asset may be a security for purposes of the federal securities laws.

The Trust has informed the Custodian that it is irrevocably abandoning, as of any date on which the Trust creates Shares, any Incidental Rights or IR Virtual Currency to which it would otherwise be entitled as of such date and with respect to which it has not taken any Affirmative Action at or prior to such date. In order to avert abandonment of an Incidental Right or IR Virtual Currency, the Trust will send a notice to the Custodian of its intention to retain such Incidental Right or IR Virtual Currency. The Sponsor intends to evaluate each future fork or airdrop on a case-by-case basis in consultation with the Trust’s legal advisers, tax consultants and Custodian. Any inability to recognize the economic benefit of a hard fork or airdrop could adversely affect the value of the Shares. See “Item 1. Business—Incidental Rights and IR Virtual Currency.”

In the event of a hard fork of the Stellar Network, the Sponsor will, if permitted by the terms of the Trust Agreement, use its discretion to determine which network should be considered the appropriate network for the Trust’s purposes, and in doing so may adversely affect the value of the Shares.

In the event of a hard fork of the Stellar Network, the Sponsor will, as permitted by the terms of the Trust Agreement, use its discretion to determine, in good faith, which digital asset network, among a group of incompatible forks of the Stellar Network, is generally accepted as the Stellar Network and should therefore be considered the appropriate digital asset network for the Trust’s purposes. The Sponsor will base its determination on a variety of then relevant factors, including, but not limited to, the Sponsor’s beliefs regarding expectations of the core developers of XLM, users, services, businesses, validators and other constituencies, as well as the actual continued acceptance of, validating power on, and community engagement with, the Stellar Network. There is no guarantee

that the Sponsor will choose the digital asset network or digital asset that is ultimately the most valuable fork, and the Sponsor’s decision may adversely affect the value of the Shares as a result. The Sponsor may also disagree with shareholders, security vendors and the Index Provider on what is generally accepted as XLM and should therefore be considered “XLM” for the Trust’s purposes, which may also adversely affect the value of the Shares as a result.

Any name change and any associated rebranding initiative by the core developers of XLM may not be favorably received by the digital asset community, which could negatively impact the value of XLM and the value of the Shares.

From time to time, digital assets may undergo name changes and associated rebranding initiatives. For example, Bitcoin Cash may sometimes be referred to as Bitcoin ABC in an effort to differentiate itself from any Bitcoin Cash hard forks, such as Bitcoin Satoshi’s Vision, and in the third quarter of 2018, the team behind ZEN rebranded and changed the name of ZenCash to “Horizen.” We cannot predict the impact of any name change and any associated rebranding initiative on XLM. After a name change and an associated rebranding initiative, a digital asset may not be able to achieve or maintain brand name recognition or status that is comparable to the recognition and status previously enjoyed by such digital asset. The failure of any name change and any associated rebranding initiative by a digital asset may result in such digital asset not realizing some or all of the anticipated benefits contemplated by the name change and associated rebranding initiative, and could negatively impact the value of XLM and the value of the Shares.

The Stellar Network’s function as a cross-currency payment platform could be used to facilitate illicit activities, and businesses that facilitate transactions in XLM may be at increased risk of criminal or civil lawsuits, or of having services cut off, which could negatively affect the price of XLM and the value of the Shares.

The Stellar Network’s function as a cross-currency payment platform may encourage bad actors to misuse the Stellar Network for such illicit purposes. As a result, businesses that facilitate transactions in XLM may be at increased risk of potential criminal or civil lawsuits, or of having banking or other services cut off, if there is a concern that the Stellar Network’s use as a cross-currency payment platform could interfere with the performance of anti-money laundering duties and economic sanctions checks. There is also a risk that digital asset trading platforms may remove XLM from their platforms as a result of these concerns. Other service providers of such businesses may also cut off services if there is a concern that the Stellar Network is being used to facilitate crime. Any of the aforementioned occurrences could increase regulatory scrutiny of the Stellar Network and/or adversely affect the price of XLM, the attractiveness of the Stellar Network and an investment in the Shares of the Trust.

When the Trust and the Sponsor, acting on behalf of the Trust, sell or deliver, as applicable, XLM, Incidental Rights and/or IR Virtual Currency, they generally do not transact directly with counterparties other than the Authorized Participant, a Liquidity Provider or other similarly eligible financial institutions that are subject to federal and state licensing requirements and maintain practices and policies designed to comply with AML and KYC regulations. When an Authorized Participant, or Liquidity Provider, sources XLM in connection with the creation of the Shares or facilitates transactions in XLM at the direction of the Trust or the Sponsor, it directly faces its counterparty and, in all instances, the Authorized Participant and its Liquidity Provider follow policies and procedures designed to ensure that it knows the identity of its counterparty. The Authorized Participant is a registered broker-dealer and therefore subject to AML and countering the financing of terrorism obligations under the Bank Secrecy Act as administered by FinCEN and further overseen by the SEC and FINRA. In addition, the Liquidity Provider is a virtual currency entity licensed by the NYDFS, which additionally subjects it to AML obligations.

In accordance with its regulatory obligations, the Authorized Participant, or Liquidity Provider, conducts customer due diligence and enhanced due diligence on its counterparties, which enables it to determine each counterparty’s AML and other risks and assign an appropriate risk rating.

As part of its counterparty onboarding process, each of the Authorized Participant and the Liquidity Provider uses third-party services to screen prospective counterparties against various watch lists, including the Specially Designated Nationals List of the Treasury Department Office of Foreign Assets Control (“OFAC”) and countries and territories identified as non-cooperative by the Financial Action Task Force. If the Sponsor, the Trust, the Authorized Participant or the Liquidity Provider were nevertheless to transact with such a sanctioned entity, the Sponsor, the Trust, the Authorized Participant and the Liquidity Provider would be at increased risk of potential criminal or civil lawsuits.

Recent developments in the digital asset economy have led to extreme volatility and disruption in digital asset markets, a loss of confidence in participants of the digital asset ecosystem, significant negative publicity surrounding digital assets broadly and market-wide declines in liquidity.

Since the fourth quarter of 2021 and to date, digital asset prices have fluctuated widely. This has led to volatility and disruption in the digital asset markets and financial difficulties for several prominent industry participants, including Digital Asset Trading Platforms, hedge funds and lending platforms. For example, in the first half of 2022, digital asset lenders Celsius Network LLC and

Voyager Digital Ltd. and digital asset hedge fund Three Arrows Capital each entered into insolvency proceedings. This resulted in a loss of confidence in participants in the digital asset ecosystem, negative publicity surrounding digital assets more broadly and market-wide declines in digital asset trading prices and liquidity.

Thereafter, in November 2022, FTX, the third largest Digital Asset Trading Platform by volume at the time, halted customer withdrawals amid rumors of the company’s liquidity issues and likely insolvency. Shortly thereafter, FTX’s CEO resigned and FTX and several affiliates of FTX filed for bankruptcy. The U.S. Department of Justice subsequently brought criminal charges, including charges of fraud, violations of federal securities laws, money laundering, and campaign finance offenses, against FTX’s former CEO and others. In November 2023, FTX’s former CEO was convicted of fraud and money laundering. Similar charges related to violations of anti-money laundering laws were brought in November 2023 against Binance and its former CEO. FTX is also under investigation by the SEC, the Justice Department, and the Commodity Futures Trading Commission, as well as by various regulatory authorities in the Bahamas, Europe and other jurisdictions. In response to these events, the digital asset markets have experienced extreme price volatility and declines in liquidity. In addition, several other entities in the digital asset industry filed for bankruptcy following FTX’s bankruptcy filing, such as BlockFi Inc. and Genesis Global Capital, LLC (“Genesis Capital”), a subsidiary of Genesis Global Holdco, LLC (“Genesis Holdco”). The SEC also brought charges against Genesis Capital and Gemini Trust Company, LLC (“Gemini”) in January 2023 for their alleged unregistered offer and sale of securities to retail investors. In October 2023, the New York Attorney General (“NYAG”) brought charges against Gemini, Genesis Capital, Genesis Asia Pacific PTE. LTD. (“Genesis Asia Pacific”), Genesis Holdco (together with Genesis Capital and Genesis Asia Pacific, the “Genesis Entities”), Genesis Capital’s former CEO, DCG, and DCG’s CEO alleging violations of the New York Penal Law, the New York General Business Law and the New York Executive Law. In February 2024, the NYAG amended its complaint to expand the charges against Gemini, the Genesis Entities, Genesis Capital’s former CEO, DCG, and DCG’s CEO to include harm to additional investors. Also in February 2024, the Genesis Entities entered into a settlement agreement with the NYAG to resolve the NYAG’s allegations against the Genesis Entities, which settlement was subsequently approved by the Bankruptcy Court of the Southern District of New York.

Furthermore, Genesis Holdco, together with certain of its subsidiaries, filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code in January 2023. While Genesis Holdco is not a service provider to the Trust, it is a wholly owned subsidiary of DCG, and is an affiliate of the Trust and the Sponsor.

These events have led to a substantial increase in regulatory and enforcement scrutiny of the industry as a whole and of Digital Asset Trading Platforms in particular, including from the Department of Justice, the SEC, the CFTC, the White House and Congress. For example, in June 2023, the SEC brought charges against Binance (the “Binance Complaint”) and Coinbase (the “Coinbase Complaint”), two of the largest digital asset trading platforms, alleging that they solicited U.S. investors to buy, sell, and trade “crypto asset securities” through their unregistered trading platforms and operated unregistered securities exchanges, brokerages and clearing agencies. Binance subsequently announced that it would be suspending USD deposits and withdrawals on Binance.US and that it plans to delist its USD trading pairs. In addition, in November 2023, the SEC brought similar charges against Kraken (the “Kraken Complaint”), alleging that it operated as an unregistered securities exchange, brokerage and clearing agency. Coinbase, Binance and Kraken all continue to litigate these charges against the SEC. The Binance Complaint, the Coinbase Complaint and the Kraken Complaint have led, and may in the future lead, to further volatility in digital asset prices.

These events have also led to significant negative publicity around digital asset market participants including DCG, Genesis and DCG’s other affiliated entities. This publicity could negatively impact the reputation of the Sponsor and have an adverse effect on the trading price and/or the value of the Shares. Moreover, sales of a significant number of Shares of the Trust as a result of these events could have a negative impact on the trading price of the Shares.

Digital asset markets have also been negatively impacted by the failure of entities perceived to be integral to the digital asset ecosystem. For example, in March 2023, state banking regulators placed Silicon Valley Bank and Signature Bank into FDIC receiverships. Also, in March 2023, Silvergate Bank announced plans to wind down and liquidate its operations. Because these banks were perceived to be the banks most open to providing services for the digital asset ecosystem in the United States, their failures may impact the willingness of banks (based on regulatory pressure or otherwise) to provide banking services to digital asset market participants. In addition, because these banks were perceived to be the banks most open to providing services for the digital asset ecosystem, their failure has caused a number of companies that provide digital asset-related services to be unable to find banks that are willing to provide them with such banking services. The inability to access banking services could negatively impact digital asset market participants and therefore the value of digital assets, including XLM, and thus the Shares. In addition, although these events did not have an impact directly on the Trust or the Sponsor when these bank failures occurred, it is possible that a future closing of a bank with which the Trust or the Sponsor has a financial relationship could subject the Trust or the Sponsor to adverse conditions and pose challenges in finding an alternative suitable bank to provide the Trust or the Sponsor with bank accounts and banking services.

Events such as these that impact the wider digital asset ecosystem are continuing to develop and change at a rapid pace and it is not possible to predict at this time all of the risks that they may pose to the Sponsor, the Trust, their affiliates and/or the Trust’s third-party service providers, or on the digital asset industry as a whole.

Continued disruption and instability in the digital asset markets as these events develop, including declines in the trading prices and liquidity of XLM, or the failure of service providers to the Trust, could have a material adverse effect on the value of the Shares and the Shares could lose all or substantially all of their value.

The value of the Shares relates directly to the value of XLM, the value of which may be highly volatile and subject to fluctuations due to a number of factors.

The value of the Shares relates directly to the value of the XLM held by the Trust and fluctuations in the price of XLM could adversely affect the value of the Shares. The market price of XLM may be highly volatile, and subject to a number of factors, including:

In addition, there is no assurance that XLM will maintain its value in the long or intermediate term. In the event that the price of XLM declines, the Sponsor expects the value of the Shares to decline proportionately.

The value of XLM as represented by the Index Price or by the Trust’s principal market may also be subject to momentum pricing due to speculation regarding future appreciation in value, leading to greater volatility that could adversely affect the value of the Shares. Momentum pricing typically is associated with growth stocks and other assets whose valuation, as determined by the investing public, accounts for future appreciation in value, if any. The Sponsor believes that momentum pricing of XLM has resulted, and may continue to result, in speculation regarding future appreciation in the value of XLM, inflating and making the Index Price more volatile. As a result, XLM may be more likely to fluctuate in value due to changing investor confidence, which could impact future appreciation or depreciation in the Index Price and could adversely affect the value of the Shares.

Due to the largely unregulated nature and lack of transparency surrounding the operations of Digital Asset Trading Platforms, they may experience fraud, market manipulation, business failures, security failures or operational problems, which may adversely affect the value of XLM and, consequently, the value of the Shares.

Digital Asset Trading Platforms are relatively new and, in many ways, are not subject to, or may not comply with, regulation in relevant jurisdictions in a manner similar to other regulated trading platforms, such as national securities exchanges or designated contract markets. While many prominent Digital Asset Trading Platforms provide the public with significant information regarding their on-chain activities, ownership structure, management teams, corporate practices, cybersecurity practices and regulatory compliance, many other Digital Asset Trading Platforms do not provide this information. Furthermore, while Digital Asset Trading Platforms are and may continue to be subject to federal and state licensing requirements in the United States, Digital Asset Trading Platforms do not currently appear to be subject to regulation in a similar manner as other regulated trading platforms, such as national securities exchanges or designated contract markets. As a result, the marketplace may lose confidence in Digital Asset Trading Platforms, including prominent trading platforms that handle a significant volume of XLM trading.

Many Digital Asset Trading Platforms, both in the United States and abroad, are unlicensed, not subject to, or not in compliance with, regulation in relevant jurisdictions, or operate without extensive supervision by governmental authorities. In particular, those located outside the United States may be subject to significantly less stringent regulatory and compliance requirements in their local jurisdictions and may take the position that they are not subject to laws and regulations that would apply to a national securities exchange or designated contract market in the United States, or may, as a practical matter, be beyond the ambit of U.S. regulators. As a result, trading activity on or reported by these Digital Asset Trading Platforms is generally significantly less regulated than trading activity on or reported by regulated U.S. securities and commodities markets, and may reflect behavior that would be prohibited in regulated U.S. trading venues. For example, in 2022 one report claimed that trading volumes on Digital Asset Trading Platforms were inflated by over 70% due to false or non-economic trades, with specific focus on unlicensed trading platforms located outside of the United States. Such reports may indicate that the Digital Asset Trading Platform Market is significantly smaller than expected and that the U.S. makes up a significantly larger percentage of the Digital Asset Trading Platform Market than is commonly understood, or that a much larger portion of digital asset market activity takes place on decentralized finance platforms than is commonly understood. Nonetheless, any actual or perceived false trading in the Digital Asset Trading Platform Market, and any other fraudulent or manipulative acts and practices, could adversely affect the value of XLM and/or negatively affect the market perception of XLM, which could in turn adversely impact the value of the Shares.

The SEC has also identified possible sources of fraud and manipulation in the Digital Asset Markets generally, including, among others (1) “wash-trading”; (2) persons with a dominant position in a digital asset manipulating pricing in such digital asset; (3) hacking of the underlying digital asset network and trading platforms; (4) malicious control of the underlying digital asset network; (5) trading based on material, non-public information (for example, plans of market participants to significantly increase or decrease their holdings in a digital asset, new sources of demand for a digital asset) or based on the dissemination of false and misleading information; (6) manipulative activity involving purported “stablecoins,” including Tether; and (7) fraud and manipulation at Digital Asset Markets. The use or presence of such acts and practices in the Digital Asset Markets could, for example, falsely inflate the volume of XLM present in the Digital Asset Markets or cause distortions in the price of XLM, among other things that could adversely affect the Trust or cause losses to shareholders. Moreover, tools to detect and deter fraudulent or manipulative trading activities, such as market manipulation, front-running of trades, and wash-trading, may not be available to or employed by Digital Asset Markets, or may not exist at all. Many Digital Asset Markets also lack certain safeguards put in place by exchanges for more traditional assets to enhance the stability of trading on the exchanges and prevent “flash crashes,” such as limit-down circuit breakers. As a result, the prices of XLM on Digital Asset Markets may be subject to larger and/or more frequent sudden declines than assets traded on more traditional exchanges.

In addition, over the past several years, some Digital Asset Trading Platforms have been closed, been subject to criminal and civil litigation and have entered into bankruptcy proceedings due to fraud and manipulative activity, business failure and/or security breaches. In many of these instances, the customers of such Digital Asset Trading Platforms were not compensated or made whole for the partial or complete losses of their account balances in such Digital Asset Trading Platforms. In some instances, customers are made whole only in dollar terms as of the Digital Asset Trading Platform’s date of failure, rather than on a digital asset basis, meaning customers may still lose out on any price increase in digital assets.

While smaller Digital Asset Trading Platforms are less likely to have the infrastructure and capitalization that make larger Digital Asset Trading Platforms more stable, larger Digital Asset Trading Platforms are more likely to be appealing targets for hackers and malware and their shortcomings or ultimate failures are more likely to have contagion effects on the digital asset ecosystem, including on the price of XLM, and therefore may be more likely to be targets of regulatory enforcement action. For example, in February 2014, Mt. Gox, the largest Digital Asset Trading Platform at the time, halted withdrawals of Bitcoin and subsequently filed for bankruptcy protection in Japan following an exploit that resulted in the loss of several hundred thousand Bitcoin. In the two weeks following the halt of Bitcoin withdrawals from Mt. Gox, the value of one Bitcoin fell on other trading platforms from around $795 to $578. Failure and shortcomings of large Digital Asset Trading Platforms have since continued; in January 2015, Bitstamp announced that approximately 19,000 Bitcoin had been stolen from its operational or “hot” wallets, and in August 2016, it was reported that almost

120,000 Bitcoin then worth around $78 million were stolen from Bitfinex. The value of Bitcoin and other digital assets immediately decreased over 10% following reports of the theft at Bitfinex. Regulatory enforcement actions have followed, such as in July 2017, when FinCEN assessed a $110 million fine against BTC-E, a now defunct Digital Asset Trading Platform, for facilitating crimes such as drug sales and ransomware attacks. In addition, in December 2017, Yapian, the operator of Seoul-based Digital Asset Trading Platform Youbit, suspended digital asset trading and filed for bankruptcy following an exploit that resulted in a loss of 17% of Yapian’s assets. In January 2018, the Japanese Digital Asset Trading Platform, Coincheck, was exploited, resulting in losses of approximately $535 million, and in February 2018, the Italian Digital Asset Trading Platform, Bitgrail, was exploited, resulting in approximately $170 million in losses. In May 2019, one of the world’s largest Digital Asset Trading Platforms, Binance, was exploited, resulting in losses of approximately $40 million. More recently, in November 2022, FTX, another of the world’s largest Digital Asset Trading Platforms, filed for bankruptcy protection and subsequently halted customer withdrawals as well as trading on its FTX.US platform. Fraud, security failures and operational problems all played a role in FTX’s issues and downfall. Moreover, Digital Asset Trading Platforms have been a subject of enhanced regulatory and enforcement scrutiny, and Digital Asset Markets have experienced continued instability, following the failure of FTX. In particular, in June 2023, the SEC brought the Binance Complaint and Coinbase Complaint, alleging that Binance and Coinbase operated unregistered securities exchanges, brokerages and clearing agencies. In addition, in November 2023, the SEC brought the Kraken Complaint, alleging that Kraken operated as an unregistered securities exchange, brokerage and clearing agency.

Negative perception, a lack of stability and standardized regulation in the Digital Asset Markets and/or the closure or temporary shutdown of Digital Asset Trading Platforms due to fraud, business failure, security breaches or government mandated regulation, and associated losses by customers, may reduce confidence in the Stellar Network and result in greater volatility in the prices of XLM. Furthermore, the closure or temporary shutdown of a Digital Asset Trading Platform used in calculating the Index Price may result in a loss of confidence in the Trust’s ability to determine its NAV on a daily basis. These potential consequences of such a Digital Asset Trading Platform’s failure could adversely affect the value of the Shares.

Digital Asset Trading Platforms may be susceptible to “front-running,” which refers to the process when someone uses technology or market advantage to get prior knowledge of upcoming transactions. Front-running is a frequent activity on centralized as well as decentralized trading platforms. By using bots functioning on a millisecond-scale timeframe, bad actors are able to take advantage of the forthcoming price movement and make economic gains at the cost of those who had introduced these transactions. The objective of a front runner is to buy tokens at a low price and later sell them at a higher price while simultaneously exiting the position. To the extent that front-running occurs, it may result in investor frustrations and concerns as to the price integrity of Digital Asset Trading Platforms and digital assets more generally.

Digital Asset Trading Platforms may be susceptible to wash trading. Wash trading occurs when offsetting trades are entered into for other than bona fide reasons, such as the desire to inflate reported trading volumes. Wash trading may be motivated by non-economic reasons, such as a desire for increased visibility on popular websites that monitor markets for digital assets so as to improve a trading platform’s attractiveness to investors who look for maximum liquidity, or it may be motivated by the ability to attract listing fees from token issuers who seek the most liquid and high-volume trading platforms on which to list their tokens. Results of wash trading may include unexpected obstacles to trade and erroneous investment decisions based on false information. Even in the United States, there have been allegations of wash trading even on regulated venues. Any actual or perceived false trading on Digital Asset Trading Platforms, and any other fraudulent or manipulative acts and practices, could adversely affect the value of XLM and/or negatively affect the market perception of XLM. To the extent that wash trading either occurs or appears to occur in Digital Asset Trading Platforms, investors may develop negative perceptions about XLM and the digital assets industry more broadly, which could adversely impact the price of XLM and, therefore, the price of the Shares. Wash trading also may place more legitimate Digital Asset Trading Platforms at a relative competitive disadvantage.

The Index has a limited history and a failure of the Index Price could adversely affect the value of the Shares.

The Index has a limited history and the Index Price is a composite reference rate calculated using trading price data from various Digital Asset Trading Platforms chosen by the Index Provider. The Digital Asset Trading Platforms chosen by the Index Provider have also changed over time. On October 18, 2020, the Index Provider, removed Bittrex (XLM/XBT) and added Bitstamp (XLM/USD) and Binance.US (XLM/USD) as part of its scheduled quarterly review. On April 30, 2022, the Index Provider removed Kraken from the Index due to lack of trading volume and did not add any Constituent Trading Platforms as part of its scheduled quarterly review. On January 28, 2023, the Index Provider removed Binance.US (XLM/USD) from the Index due to the trading platform not meeting the minimum liquidity requirement, and added Kraken (XLM/USD) as a Constituent Trading Platform due to the exchange meeting the minimum liquidity requirement as part of its scheduled quarterly review. The Index Provider may remove or add Digital Asset Trading Platforms to the Index in the future at its discretion. For more information on the inclusion criteria for Digital Asset Trading Platforms in the Index, see “Item 1. Business—Overview of the XLM Industry and Market—XLM Value—The Index and the Index Price.”

Although the Index is designed to accurately capture the market price of XLM, third parties may be able to purchase and sell XLM on public or private markets not included among the constituent Digital Asset Trading Platforms of the Index, and such transactions may take place at prices materially higher or lower than the Index Price. Moreover, there may be variances in the prices of XLM on the various Digital Asset Trading Platforms, including as a result of differences in fee structures or administrative procedures on different Digital Asset Trading Platforms. For example, based on data provided by the Index Provider, on any given day during the year ended September 30, 2024, the maximum differential between the 4:00 p.m., New York time, spot price of any single Digital Asset Trading Platform included in the Index and the Index Price was 0.20% and the average of the maximum differentials of the 4:00 p.m., New York time, spot price of each Digital Asset Trading Platform included in the Index and the Index Price was 0.45%. During this same period, the average differential between the 4:00 p.m., New York time, spot prices of all the Digital Asset Trading Platforms included in the Index and the Index Price was 0.003%. All Digital Asset Trading Platforms that were included in the Index throughout the period were considered in this analysis. To the extent such prices differ materially from the Index Price, investors may lose confidence in the Shares’ ability to track the market price of XLM, which could adversely affect the value of the Shares.

The Index Price used to calculate the value of the Trust’s XLM may be volatile, and purchasing activity in the Digital Asset Markets associated with Basket creations may affect the Index Price and Share trading prices, adversely affecting the value of the Shares.

The price of XLM on public Digital Asset Trading Platforms has a very limited history, and during this history, XLM prices on the Digital Asset Markets more generally, and on Digital Asset Trading Platforms individually, have been volatile and subject to influence by many factors, including operational interruptions. While the Index is designed to limit exposure to the interruption of individual Digital Asset Trading Platforms, the Index Price, and the price of XLM generally, remains subject to volatility experienced by Digital Asset Trading Platforms, and such volatility could adversely affect the value of the Shares. For example, from October 1, 2019 through September 30, 2024, the Index Price ranged from $0.03 to $0.72, with the straight average being $0.16 through September 30, 2024. In addition, during the year ended September 30, 2024, the Index Price ranged from $0.08 to $0.16. The Sponsor has not observed a material difference between the Index Price and average prices from the constituent Digital Asset Trading Platforms individually or as a group. The price of XLM more generally has experienced volatility similar to the Index Price during these periods. For additional information on movement of the Index Price and the price of XLM, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Historical NAV and XLM Prices.”

Furthermore, because the number of Digital Asset Trading Platforms is limited, the Index will necessarily be composed of a limited number of Digital Asset Trading Platforms. If a Digital Asset Trading Platform were subjected to regulatory, volatility or other pricing issues, the Index Provider would have limited ability to remove such Digital Asset Trading Platform from the Index, which could skew the price of XLM as represented by the Index. Trading on a limited number of Digital Asset Trading Platforms may result in less favorable prices and decreased liquidity of XLM and, therefore, could have an adverse effect on the value of the Shares.

Purchasing activity associated with acquiring XLM required for the creation of Baskets may increase the market price of XLM on the Digital Asset Markets, which will result in higher prices for the Shares. Increases in the market price of XLM may also occur as a result of the purchasing activity of other market participants. Other market participants may attempt to benefit from an increase in the market price of XLM that may result from increased purchasing activity of XLM connected with the issuance of Baskets. Consequently, the market price of XLM may decline immediately after Baskets are created. Decreases in the market price of XLM may also occur as a result of sales in Secondary Markets by other market participants. If the Index Price declines, the value of the Shares will generally also decline.

Competition from the emergence or growth of other digital assets or methods of investing in XLM could have a negative impact on the price of XLM and adversely affect the value of the Shares.

As of September 30, 2024, XLM was the 31st largest digital asset by market capitalization as tracked by CoinMarketCap.com. As of September 30, 2024, the digital assets tracked by CoinMarketCap.com had a total market capitalization of approximately $2,228.5 billion (including the approximately $2.9 billion market cap of XLM), as calculated using market prices and total available supply of each digital asset, excluding tokens pegged to other assets. XLM faces competition from a wide range of digital assets. Many consortiums and financial institutions are also researching and investing resources into private or permissioned blockchain platforms rather than open platforms like the Stellar Network. In addition, XLM is currently supported by fewer trading platforms than more established digital assets, such as Bitcoin and Ether, which could impact its liquidity. Competition from the emergence or growth of alternative digital assets could have a negative impact on the demand for, and price of, XLM and thereby adversely affect the value of the Shares.

Investors may invest in XLM through means other than the Shares, including through direct investments in XLM and other potential financial vehicles, possibly including securities backed by or linked to XLM and digital asset financial vehicles similar to the Trust. Market and financial conditions, and other conditions beyond the Sponsor’s control, may make it more attractive to invest in other financial vehicles or to invest in XLM directly, which could limit the market for, and reduce the liquidity of, the Shares. In addition, to the extent digital asset financial vehicles other than the Trust tracking the price of XLM are formed and represent a significant proportion of the demand for XLM, large purchases or redemptions of the securities of these digital asset financial vehicles, or private funds holding XLM, could negatively affect the Index Price, the NAV, the value of the Shares, the Principal Market NAV and the Principal Market

NAV per Share. Moreover, any reduced demand for Shares of the Trust may cause the Shares of the Trust to trade at a discount to the NAV per Share.

Prices of XLM may be affected due to stablecoins (including Tether and U.S. Dollar Coin (“USDC”)), the activities of stablecoin issuers and their regulatory treatment.

While the Trust does not invest in stablecoins, it may nonetheless be exposed to these and other risks that stablecoins pose for the market for XLM and other digital assets. Stablecoins are digital assets designed to have a stable value over time as compared to typically volatile digital assets, and are typically marketed as being pegged to the value of a referenced asset, normally a fiat currency, such as the U.S. dollar. Although the prices of stablecoins are intended to be stable compared to their referenced asset, in many cases their prices fluctuate, sometimes significantly. This volatility has in the past impacted the prices of certain digital assets, and has at times caused certain stablecoins to lose their “peg” to the underlying fiat currency. Stablecoins are a relatively new phenomenon, and it is impossible to know all of the risks that they could pose to participants in the digital asset markets. In addition, some have argued that some stablecoins, particularly Tether, are improperly issued without sufficient backing in a way that could cause artificial rather than genuine demand for digital assets, raising their prices. Regulators have also charged stablecoin issuers with violations of law or otherwise required certain stablecoin issuers to cease certain operations. For example, on February 17, 2021, the New York Attorney General entered into an agreement with Tether’s operators, requiring them to cease any further trading activity with New York persons and pay $18.5 million in penalties for false and misleading statements made regarding the assets backing Tether. On October 15, 2021, the CFTC announced a settlement with Tether’s operators in which they agreed to pay $42.5 million in fines to settle charges that, among others, Tether’s claims that it maintained sufficient U.S. dollar reserves to back every Tether stablecoin in circulation with the “equivalent amount of corresponding fiat currency” held by Tether were untrue.

USDC is a reserve-backed stablecoin issued by Circle Internet Financial that is commonly used as a method of payment in digital asset markets, including the Stellar market. The issuer of USDC uses the Circle Reserve Fund to hold cash, U.S. Treasury bills, notes and other obligations issued or guaranteed as to principal and interest by the U.S. Treasury, and repurchase agreements secured by such obligations or cash, which serve as reserves backing USDC stablecoins. While USDC is designed to maintain a stable value at 1 U.S. dollar at all times, on March 10, 2023, the value of USDC fell below $1.00 (and remained below for multiple days) after Circle Internet Financial disclosed that $3.3 billion of the USDC reserves were held at Silicon Valley Bank, which had entered FDIC receivership earlier that day. Popular stablecoins are reliant on the U.S. banking system and U.S. treasuries, and the failure of either to function normally could impede the function of stablecoins or lead to outsized redemption requests, and therefore could adversely affect the value of the Shares.

Some stablecoins have been asserted to be securities under the federal securities laws. For example, on June 5, 2023, the SEC alleged in a complaint that the stablecoin BUSD, a U.S. dollar stablecoin issued by Binance, was a “crypto asset security” and that Binance “offered and sold to U.S. investors as part of a profit-earning scheme within the Binance ecosystem.” In another example, the District Court for the Southern District of New York denied defendants’ motion to dismiss an SEC complaint asserting that the stablecoin UST, a U.S. dollar stablecoin issued by Terra, is a security. Further public concern about the possible security status of stablecoins manifested in November 2023, when the financial technology company PayPal disclosed in a filing that it had received a subpoena from the SEC relating to the PayPal USD stablecoin that requested the production of documents. A determination that a popular stablecoin is a security could lead to outsized redemption requests, and therefore could adversely affect the broader value of the Shares.

Given the role that stablecoins play in global digital asset markets, their fundamental liquidity can have a dramatic impact on the broader digital asset market, including the market for XLM. Because a large portion of the digital asset market still depends on stablecoins such as Tether and USDC, there is a risk that a disorderly de-pegging or a run on Tether or USDC could lead to dramatic market volatility in, and/or materially and adversely affect the prices of, digital assets more broadly.

Volatility in stablecoins, operational issues with stablecoins (for example, technical issues that prevent settlement), concerns about the sufficiency of any reserves that support stablecoins, or regulatory concerns about stablecoin issuers or intermediaries, such as Bitcoin spot markets, that support stablecoins, could impact individuals’ willingness to trade on trading venues that rely on stablecoins and could impact the price of XLM, and in turn, an investment in the Shares.

The Stellar Development Foundation has control over the distribution of a significant amount of XLM. Future distributions of XLM by SDF, the perception that these distributions may occur, its ability to change its distribution plans, or any failure to distribute XLM in the best interest of the Stellar Network, could cause the price of XLM to decline.

As part of its custodial mandate, SDF, also known as Stellar.org, oversees how the vast majority of XLM are distributed. The initial 100 billion XLM were created by SDF and were required to be distributed as follows: (i) 50% to individuals, (ii) 25% to partners such as businesses, governments, institutions, or nonprofit organizations that contribute to the growth and adoption of the Stellar Network, (iii) 19% to Bitcoin holders and 1% to XRP holders in giveaways conducted in October 2016 and August 2017 and (iv) 5% reserved for SDF operational expenses. No further XLM could be created or distributed according to the Stellar protocol, aside from supply increases by a fixed inflation rate of 1% per year, which was removed pursuant to a Stellar community vote on October 2019.

In November 2019, SDF removed, or “burned”, approximately 55 billion of the approximately 105 billion of XLM’s total supply at the time in order to reduce its ownership stake. As a result, as of November 2019, SDF held approximately 25 billion XLM of the approximately 50 billion of XLM’s total supply (amounting to approximately 50% of the XLM supply). SDF has indicated that it will distribute its remaining XLM as follows: (i) 12 billion for direct development, (ii) 10 billion for use-case investment, (iii) 6 billion for user acquisition and (iv) 2 billion for ecosystem support. For additional information see “Item 1. Business—Overview of the XLM Industry and Market—Creation of New XLM.”

Because XLM distributions are managed by SDF unilaterally, it is possible SDF may deviate from the planned distributions described above. In contrast to the hard-coded, predictable rewards earned by miners of a progressive validating process such as Bitcoin, inconsistencies or deviations from planned XLM distributions by SDF may undermine confidence in or challenge the future development of the Stellar Network. For example, if developers on the Stellar Network are concerned about actual or perceived inconsistencies in distributions of XLM, they may be less willing to commit resources to improving the Stellar Network. Moreover, as a result of SDF’s concentration of control, various considerations, such as large distributions by SDF in the future the perception that these distributions may or may not occur, SDF’s ability to change its distribution plans, or any failure to distribute XLM in the best interest of the Stellar Network, could inhibit the Stellar Network from attracting core developers or marshalling sufficient effort to overcome any future problems and any of these considerations, either alone or in combination, especially long-term problems, could have an adverse effect on the market price of XLM and an investment in the Shares.

Failure of funds that hold digital assets or that have exposure to digital assets through derivatives to receive SEC approval to list their shares on exchanges could adversely affect the value of the Shares.

There have been a growing number of attempts to list on national securities exchanges the shares of funds that hold digital assets or that have exposure to digital assets through derivatives. These investment vehicles attempt to provide institutional and retail investors exposure to markets for digital assets and related products. Until recently, the SEC had repeatedly denied such requests. In January 2018, the SEC’s Division of Investment Management outlined several questions that sponsors would be expected to address before the SEC will consider granting approval for funds holding “substantial amounts” of cryptocurrencies or “cryptocurrency-related products.” The questions, which focus on specific requirements of the Investment Company Act, generally fall into one of five key areas: valuation, liquidity, custody, arbitrage and potential manipulation. The SEC has not explicitly stated whether each of the questions set forth would also need to be addressed by entities with similar products and investment strategies that instead pursue registered offerings under the Securities Act, although such entities would need to comply with the registration and prospectus disclosure requirements of the Securities Act. After several years of the SEC denying requests to list shares of various digital asset funds holding Bitcoin on national securities exchanges, including the request to list the shares of Grayscale Bitcoin Trust ETF on NYSE Arca in June 2022, the Sponsor petitioned the United States Court of Appeals for the District of Columbia Circuit for review of the SEC’s final order denying approval to list shares of Grayscale Bitcoin Trust ETF on NYSE Arca as an exchange-traded product. In August 2023, the D.C. Circuit Court of Appeals granted the Sponsor’s petition and vacated the SEC’s order as arbitrary and capricious. The SEC did not seek panel rehearing or rehearing en banc. In October 2023, the D.C. Circuit Court of Appeals remanded the matter to the SEC. Ultimately, on January 10, 2024, the SEC approved NYSE Arca’s 19b-4 application to list the shares of the Grayscale Bitcoin Trust ETF on NYSE Arca as an exchange-traded product, as well as requests to list shares of various other digital asset funds holding spot Bitcoin on national securities exchanges. Subsequently, the SEC approved NYSE Arca’s similar 19b-4 applications to list the shares of the Grayscale Ethereum Trust ETF and Grayscale Ethereum Mini Trust ETF, as well as requests to list the shares of various other investment vehicles that hold spot Ether on national securities exchanges.

Moreover, even though NYSE Arca’s requests with respect to Grayscale Bitcoin Trust ETF, Grayscale Bitcoin Mini Trust ETF, Grayscale Ethereum Trust ETF and Grayscale Ethereum Mini Trust ETF were approved, there is no guarantee that a similar application to list Shares of the Trust on NYSE Arca, or another national securities exchange, would be approved. In particular, Bitcoin is the only digital asset that the SEC has publicly indicated it does not currently view as a security, although the SEC, by action through delegated authority approving exchange rule filings to list shares of trusts holding Ether as commodity-based exchange-traded products, has implicitly taken the view that Ether is not a security. The Sponsor believes that the SEC is unlikely to approve a request to list the shares of a spot exchange-traded product that holds a digital asset that the SEC believes is a security. Moreover, even if the SEC took the view that a digital asset was not a security, based on prior spot exchange-traded product disapprovals, the existence of a CFTC-regulated futures market for the relevant digital asset would be central to the SEC’s approval of any request to list the shares of a spot exchange-traded product holding such digital asset. As of the date hereof, there are only CFTC-regulated futures markets for a limited number of digital assets, including Bitcoin, Ether, Litecoin, Bitcoin Cash and Dogecoin. As such, there exist significant barriers to obtaining regulatory approval to list the shares of other digital asset investment vehicles, including the Shares of the Trust. Investors should not assume that recent approvals of spot Bitcoin and spot Ether exchange-traded products will subsequently lead to approval of spot exchange-traded products holding other digital assets, such as the Trust. Accordingly, there is no guarantee that the Sponsor will be successful in listing the Shares of the Trust on NYSE Arca even if the Sponsor decides to do so.

The exchange listing of shares of digital asset funds would create more opportunities for institutional and retail investors to invest in the digital asset market. If exchange-listing requests beyond those for funds holding Bitcoin or Ether continue to be denied by the

SEC, increased investment interest by institutional or retail investors could fail to materialize, which could reduce the demand for digital assets generally and therefore adversely affect the value of the Shares.

The Trust relies on third-party service providers to perform certain functions essential to the affairs of the Trust and the replacement of such service providers could pose a challenge to the safekeeping of the Trust’s XLM and to the operations of the Trust.

The Trust relies on the Custodian, the Authorized Participant and other third-party service providers to perform certain functions essential to managing the affairs of the Trust. In addition, the Authorized Participant may rely on one or more Liquidity Providers to source XLM in connection with the creation of Shares. Any disruptions to such service providers’ business operations, resulting from business failures, financial instability, security failures, government mandated regulation or operational problems could have an adverse impact on the Trust’s ability to access critical services and be disruptive to the operations of the Trust and require the Sponsor to replace such service provider. Moreover, the Sponsor could decide to replace a service provider to the Trust, or a Liquidity Provider could be replaced for other reasons.

If the Sponsor decides, or is required, to replace Coinbase Custody Trust Company, LLC as the custodian of the Trust’s XLM, transferring maintenance responsibilities of the Digital Asset Account to another party will likely be complex and could subject the Trust’s XLM to the risk of loss during the transfer, which could have a negative impact on the performance of the Shares or result in loss of the Trust’s assets.

Moreover, the legal rights of customers with respect to digital assets held on their behalf by a third-party custodian, such as the Custodian, in insolvency proceedings are currently uncertain. The Custodian Agreement contains an agreement by the parties to treat the digital assets credited to the Trust’s Digital Asset Account as financial assets under Article 8 of the New York Uniform Commercial Code (“Article 8”), in addition to stating that the Custodian will serve as fiduciary and custodian on the Trust’s behalf. The Custodian’s parent, Coinbase Global Inc., has stated in its public securities filings that in light of the inclusion in its custody agreements of provisions relating to Article 8 it believes that a court would not treat custodied digital assets as part of its general estate in the event the Custodian were to experience insolvency. However, due to the novelty of digital asset custodial arrangements courts have not yet considered this type of treatment for custodied digital assets and it is not possible to predict with certainty how they would rule in such a scenario. If the Custodian became subject to insolvency proceedings and a court were to rule that the custodied digital assets were part of the Custodian’s general estate and not the property of the Trust, then the Trust would be treated as a general unsecured creditor in the Custodian’s insolvency proceedings and the Trust could be subject to the loss of all or a significant portion of its assets.

To the extent that Sponsor is not able to find a suitable party willing to serve as the custodian, the Sponsor may be required to terminate the Trust and liquidate the Trust’s XLM. In addition, to the extent that the Sponsor finds a suitable party and must enter into a modified Custodian Agreement that is less favorable for the Trust or Sponsor and/or transfer the Trust’s assets in a relatively short time period, the safekeeping of the Trust’s XLM may be adversely affected, which may in turn adversely affect value of the Shares. Likewise, if the Sponsor and/or the Authorized Participant is required to replace any other service provider, they may not be able to find a party willing to serve in such capacity in a timely manner or at all. If the Sponsor decides, or is required, to replace the Authorized Participant and/or if a Liquidity Provider is replaced or required to be replaced, this could negatively impact the Trust’s ability to create new Shares, which would impact the Shares’ liquidity and could have a negative impact on the value of the Shares.

Because of the holding period under Rule 144, the lack of an ongoing redemption program and the Trust’s ability to halt creations from time to time, there is no arbitrage mechanism to keep the value of the Shares closely linked to the Index Price and the Shares have historically traded at a substantial premium over, or a substantial discount to, the NAV per Share.

Shares purchased in the private placement are subject to a holding period under Rule 144. Pursuant to Rule 144, the minimum holding period for Shares purchased in the private placement is six months. In addition, the Trust does not currently operate an ongoing redemption program and may halt creations from time to time. As a result, the Trust cannot rely on arbitrage opportunities resulting from differences between the value of the Shares and the price of XLM to keep the value of the Shares closely linked to the Index Price. As a result, the value of the Shares of the Trust may not approximate the value of the Trust’s NAV per Share or meet the Trust’s investment objective, and may trade at a substantial premium over, or substantial discount to, the value of the Trust’s NAV per Share. For example, in the past, the price of the Shares as quoted on OTCQX varied significantly from the NAV per Share due to these factors, among others, and has historically traded at a substantial premium over, or a substantial discount to, the NAV per Share.

The Shares may trade at a price that is at, above or below the Trust’s NAV per Share as a result of the non-current trading hours between OTCQX and the Digital Asset Trading Platform Market.

The Trust’s NAV per Share will fluctuate with changes in the market value of XLM, and the Sponsor expects the trading price of the Shares to fluctuate in accordance with changes in the Trust’s NAV per Share, as well as market supply and demand. However, the Shares may trade on OTCQX at, above or below the Trust’s NAV per Share for a variety of reasons. For example, OTCQX is open for

trading in the Shares for a limited period each day, but the Digital Asset Trading Platform Market is a 24-hour marketplace. During periods when OTCQX is closed but Digital Asset Trading Platforms are open, significant changes in the price of XLM on the Digital Asset Trading Platform Market could result in a difference in performance between the value of XLM as measured by the Index and the most recent NAV per Share or closing trading price. For example, if the price of XLM on the Digital Asset Trading Platform Market, and the value of XLM as measured by the Index, moves significantly in a negative direction after the close of OTCQX, the trading price of the Shares may “gap” down to the full extent of such negative price shift when OTCQX reopens. If the price of XLM on the Digital Asset Trading Platform Market drops significantly during hours OTCQX is closed, shareholders may not be able to sell their Shares until after the “gap” down has been fully realized, resulting in an inability to mitigate losses in a rapidly negative market. Even during periods when OTCQX is open, large Digital Asset Trading Platforms (or a substantial number of smaller Digital Asset Trading Platforms) may be lightly traded or closed for any number of reasons, which could increase trading spreads and widen any premium or discount on the Shares.

Shareholders may suffer a loss on their investment if the Shares trade above or below the Trust’s NAV per Share.

Historically, the Shares have traded at both premiums and discounts to the NAV per Share, which at times have been substantial. If the Shares trade at a premium, investors who purchase Shares on OTCQX will pay more for their Shares than investors who purchase Shares directly from Authorized Participants. In contrast, if the Shares trade on OTCQX at a discount, investors who purchase Shares directly from Authorized Participants will pay more for their Shares than investors who purchase Shares on OTCQX. The premium or discount at which the Shares have traded has fluctuated over time. From October 19, 2021 to September 30, 2024, the maximum premium of the closing price of the Shares quoted on OTCQX over the value of the Trust’s NAV per Share was 461% and the average premium was 135%. From October 19, 2021 to September 30, 2024, the maximum discount of the closing price of the Shares quoted on OTCQX below the value of the Trust’s NAV per Share was 35% and the average discount was 9%. The closing price of the Shares, as quoted on OTCQX at 4:00 p.m., New York time, on each business day between October 19, 2021 and September 30, 2024, has been quoted at a discount on 206 days. As of September 30, 2024, the last business day of the period, the Trust’s Shares were quoted on OTCQX at a premium of 111% to the Trust’s NAV per Share. As a result, shareholders who purchase Shares on OTCQX may suffer a loss on their investment if they sell their Shares at a time when the premium has decreased from the premium at which they purchased the Shares even if the NAV per Share remains the same. Likewise, shareholders that purchase Shares directly from the Trust may suffer a loss on their investment if they sell their Shares at a time when the Shares are trading at a discount on OTCQX. Furthermore, shareholders may suffer a loss on their investment even if the NAV per Share increases because the decrease in any premium or increase in any discount may offset any increase in the NAV per Share.

The amount of the Trust’s assets represented by each Share will decline over time as the Trust pays the Sponsor’s Fee and Additional Trust Expenses, and as a result, the value of the Shares may decrease over time.

The Sponsor’s Fee accrues daily in U.S. dollars at an annual rate based on the NAV Fee Basis Amount, which is based on the NAV of the Trust, and is paid to the Sponsor in XLM. See “Item 1. Business—Valuation of XLM and Determination of NAV—Disposition of XLM, Incidental Rights and/or IR Virtual Currency” and “Item 1. Business—Activities of the Trust—Hypothetical Expense Example.” As a result, the amount of Trust’s assets represented by each Share declines as the Trust pays the Sponsor’s Fee (or sells XLM in order to raise cash to pay any Additional Trust Expenses), which may cause the Shares to decrease in value over time or dampen any increase in value.

The value of the Shares may be influenced by a variety of factors unrelated to the value of XLM.

The value of the Shares may be influenced by a variety of factors unrelated to the price of XLM and the Digital Asset Trading Platforms included in the Index that may have an adverse effect on the value of the Shares. These factors include the following factors:

Any of these factors could affect the value of the Shares, either directly or indirectly through their effect on the Trust’s assets.

Shareholders do not have the protections associated with ownership of shares in an investment company registered under the Investment Company Act or the protections afforded by the CEA.

The Investment Company Act is designed to protect investors by preventing insiders from managing investment companies to their benefit and to the detriment of public investors, such as: the issuance of securities having inequitable or discriminatory provisions; the management of investment companies by irresponsible persons; the use of unsound or misleading methods of computing earnings and asset value; changes in the character of investment companies without the consent of investors; and investment companies from engaging in excessive leveraging. To accomplish these ends, the Investment Company Act requires the safekeeping and proper valuation of fund assets, restricts greatly transactions with affiliates, limits leveraging, and imposes governance requirements as a check on fund management.

The Trust is not a registered investment company under the Investment Company Act, and the Sponsor believes that the Trust is not required to register under such act. Consequently, shareholders do not have the regulatory protections provided to investors in investment companies.

The Trust will not hold or trade in commodity interests regulated by the CEA, as administered by the CFTC. Furthermore, the Sponsor believes that the Trust is not a commodity pool for purposes of the CEA, and that neither the Sponsor nor the Trustee is subject to regulation by the CFTC as a commodity pool operator or a commodity trading adviser in connection with the operation of the Trust. Consequently, shareholders will not have the regulatory protections provided to investors in CEA-regulated instruments or commodity pools.

The restrictions on transfer and redemption may result in losses on the value of the Shares.

Shares purchased in the private placement may not be resold except in transactions exempt from registration under the Securities Act and state securities laws, and any such transaction must be approved in advance by the Sponsor. In determining whether to grant approval, the Sponsor will specifically look at whether the conditions of Rule 144 under the Securities Act and any other applicable laws have been met. Any attempt to sell Shares without the approval of the Sponsor in its sole discretion will be void ab initio. See “Item 1. Business—Description of the Shares—Transfer Restrictions” for more information.

At this time the Sponsor is not accepting redemption requests from shareholders. Because the Sponsor does not believe that the SEC would, at this time, entertain an application for the waiver of rules needed in order to operate an ongoing redemption program, the Sponsor currently has no intention of seeking regulatory approval from the SEC for the Trust to operate an ongoing redemption program and significant barriers to regulatory approval for any request to list the shares of other digital asset investment vehicles, including the Shares of the Trust, remain. Absent the institution of such redemption program, the Shares may trade at a discount in the future, and may do so indefinitely. Therefore, unless the Trust is permitted to, and does, establish a Share redemption program, shareholders will be unable to (or could be significantly impeded in attempting to) sell or otherwise liquidate investments in the Shares, which could have a material adverse impact on demand for the Shares and their value.

Affiliates of the Trust previously entered into a settlement agreement with the SEC concerning the operation of one such affiliate’s former redemption programs.

On April 1, 2014, Grayscale Bitcoin Trust ETF, an affiliate of the Trust, launched a program pursuant to which its shareholders could request redemptions from Genesis, an affiliate of the Trust and the sole Authorized Participant of Grayscale Bitcoin Trust ETF at that time. On September 23, 2014, Genesis received a letter from the staff of the SEC’s Office of Compliance Inspections and Examinations summarizing the staff’s findings from an onsite review of Genesis’s broker-dealer activities conducted in June 2014. In its exit report, the staff stated that it had concluded that Grayscale Bitcoin Trust ETF’s redemption program, in which its shareholders were permitted to request the redemption of their shares through Genesis, appeared to violate Regulation M under the Exchange Act because such redemptions of shares took place at the same time Grayscale Bitcoin Trust ETF was in the process of creating shares. On July 11, 2016, Genesis and Grayscale Bitcoin Trust ETF entered into a settlement agreement with the SEC whereby they agreed to a cease-and-desist order against future violations of Rules 101 and 102 of Regulation M under the Exchange Act. Genesis also agreed to pay disgorgement of $51,650.11 in redemption fees it collected, plus prejudgment interest of $2,105.68, for a total of $53,755.79. The Trust currently has no intention of seeking an exemption from the SEC under Regulation M in order to instate a redemption program.

There is no guarantee that an active trading market for the Shares will continue to develop.

The Shares are qualified for public trading on OTCQX and an active trading market for the Shares has developed. However, there can be no assurance that such trading market will be maintained or continue to develop. In addition, OTCQX can halt the trading of the Shares for a variety of reasons. To the extent that OTCQX halts trading in the Shares, whether on a temporary or permanent basis, investors may not be able to buy or sell Shares, which could adversely affect the value of the Shares. If an active trading market for the Shares does not continue to exist, the market prices and liquidity of the Shares may be adversely affected.

The Sponsor may also seek to list the Shares on NYSE Arca sometime in the future, and NYSE Arca must receive approval from the SEC in order to list the Shares, but is not currently seeking approval for required rule changes and currently has no intention to do so. Even if such approval were sought in the future, there can be no guarantee that the Shares will ever be listed on NYSE Arca. See “—Failure of funds that hold digital assets or that have exposure to digital assets through derivatives to receive SEC approval to list their shares on exchanges could adversely affect the value of the Shares.”

As the Sponsor and its management have limited history of operating investment vehicles like the Trust, their experience may be inadequate or unsuitable to manage the Trust.

The past performances of the Sponsor’s management in other investment vehicles, including their experiences in the digital asset and venture capital industries, are no indication of their ability to manage an investment vehicle such as the Trust. If the experience of the Sponsor and its management is inadequate or unsuitable to manage an investment vehicle such as the Trust, the operations of the Trust may be adversely affected.

Furthermore, the Sponsor is currently engaged in the management of other investment vehicles which could divert their attention and resources. If the Sponsor were to experience difficulties in the management of such other investment vehicles that damaged the Sponsor or its reputation, it could have an adverse impact on the Sponsor’s ability to continue to serve as Sponsor for the Trust.

Security threats to the Digital Asset Account could result in the halting of Trust operations and a loss of Trust assets or damage to the reputation of the Trust, each of which could result in a reduction in the value of the Shares.

Security breaches, computer malware and computer hacking attacks have been a prevalent concern in relation to digital assets. The Sponsor believes that the Trust’s XLM held in the Digital Asset Account will be an appealing target to hackers or malware distributors seeking to destroy, damage or steal the Trust’s XLM and will only become more appealing as the Trust’s assets grow. To the extent that the Trust, the Sponsor or the Custodian is unable to identify and mitigate or stop new security threats or otherwise adapt to technological changes in the digital asset industry, the Trust’s XLM may be subject to theft, loss, destruction or other attack.

The Sponsor believes that the security procedures in place for the Trust, including, but not limited to, offline storage, or “cold storage”, multiple encrypted private key “shards”, usernames, passwords and 2-step verification, are reasonably designed to safeguard the Trust’s XLM. Nevertheless, the security procedures cannot guarantee the prevention of any loss due to a security breach, software defect or act of God that may be borne by the Trust.

The security procedures and operational infrastructure may be breached due to the actions of outside parties, error or malfeasance of an employee of the Sponsor, the Custodian, or otherwise, and, as a result, an unauthorized party may obtain access to a Digital Asset Account, the relevant private keys (and therefore XLM) or other data of the Trust. Additionally, outside parties may attempt to fraudulently induce employees of the Sponsor or the Custodian to disclose sensitive information in order to gain access to the Trust’s infrastructure. As the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently, or may be designed to remain dormant until a predetermined event and often are not recognized until launched against a target, the Sponsor and the Custodian may be unable to anticipate these techniques or implement adequate preventative measures.

An actual or perceived breach of a Digital Asset Account could harm the Trust’s operations, result in loss of the Trust’s assets, damage the Trust’s reputation and negatively affect the market perception of the effectiveness of the Trust, all of which could in turn reduce demand for the Shares, resulting in a reduction in the value of the Shares. The Trust may also cease operations, the occurrence of which could similarly result in a reduction in the value of the Shares.

XLM transactions are irrevocable and stolen or incorrectly transferred XLM may be irretrievable. As a result, any incorrectly executed XLM transactions could adversely affect the value of the Shares.

XLM transactions are typically not reversible without the consent and active participation of the recipient of the transaction. Once a transaction has been verified and recorded in a block that is added to the Blockchain, an incorrect transfer or theft of XLM generally will not be reversible and the Trust may not be capable of seeking compensation for any such transfer or theft. Although the Trust’s transfers of XLM will regularly be made to or from the Digital Asset Account, it is possible that, through computer or human error, or through theft or criminal action, the Trust’s XLM could be transferred from the Trust’s Digital Asset Account in incorrect amounts or to unauthorized third parties, or to uncontrolled accounts.

Such events have occurred in connection with digital assets in the past. To the extent that the Trust is unable to seek a corrective transaction with such third party or is incapable of identifying the third party which has received the Trust’s XLM through error or theft, the Trust will be unable to revert or otherwise recover incorrectly transferred XLM. The Trust will also be unable to convert or recover its XLM transferred to uncontrolled accounts. To the extent that the Trust is unable to seek redress for such error or theft, such loss could adversely affect the value of the Shares.

The lack of full insurance and shareholders’ limited rights of legal recourse against the Trust, Trustee, Sponsor, Transfer Agent and Custodian expose the Trust and its shareholders to the risk of loss of the Trust’s XLM for which no person or entity is liable.

The Trust is not a banking institution or otherwise a member of the Federal Deposit Insurance Corporation (“FDIC”) or Securities Investor Protection Corporation (“SIPC”) and, therefore, deposits held with or assets held by the Trust are not subject to the protections enjoyed by depositors with FDIC or SIPC member institutions. In addition, neither the Trust nor the Sponsor insures the Trust’s XLM.

While the Custodian is required under the Custodian Agreement to maintain insurance coverage that is commercially reasonable for the custodial services it provides, and the Custodian has advised the Sponsor that they maintain insurance at commercially reasonable amounts for the digital assets custodied on behalf of clients, including the Trust’s XLM, shareholders cannot be assured that the Custodian will maintain adequate insurance or that such coverage will cover losses with respect to the Trust’s XLM. Moreover, while the Custodian maintains certain capital reserve requirements depending on the assets under custody and to the extent required by applicable law, and such capital reserves may provide additional means to cover client asset losses, the Sponsor does not know the amount of such capital reserves, and neither the Trust nor the Sponsor have access to such information. The Trust cannot be assured that the Custodian will maintain capital reserves sufficient to cover losses with respect to the Trust’s digital assets. Furthermore, Coinbase has represented in securities filings that the total value of crypto assets in its possession and control is significantly greater than the total value of insurance coverage that would compensate Coinbase in the event of theft or other loss of funds.

Furthermore, under the Custodian Agreement, the Custodian’s liability with respect to the Trust will never exceed the value of the XLM on deposit in the Digital Asset Account at the time of, and directly relating to, the events giving rise to the liability occurred, as determined in accordance with the Custodian Agreement. In addition, for as long as a cold storage address holds XLM with a value in excess of the Cold Storage Threshold for a period of five consecutive business days or more without being reduced to the Cold Storage Threshold or lower, the Custodian’s maximum liability for such cold storage address shall be limited to the Cold Storage Threshold. The Sponsor monitors the value of XLM deposited in cold storage addresses for whether the Cold Storage Threshold has been met by determining the U.S. dollar value of XLM deposited in each cold storage address on business days. The Custodian is not liable for any lost profits or any special, incidental, indirect, intangible, or consequential damages, whether based in contract, tort, negligence, strict liability or otherwise, and whether or not the Custodian has been advised of such losses or the Custodian knew or should have known of the possibility of such damages. Notwithstanding the foregoing, the Custodian is liable to the Sponsor and the Trust for the loss of any XLM to the extent that the Custodian directly caused such loss through a breach of the Custodian Agreement, even if the Custodian meets its duty of exercising best efforts, and the Custodian is required to return to the Trust a quantity equal to the quantity of any such lost XLM. Although the Cold Storage Threshold has never been met for a given cold storage address, to the extent it is met and not reduced within five business days, the Trust would not have a claim against the Custodian with respect to the digital assets held in such address to the extent the value exceeds the Cold Storage Threshold.

The shareholders’ recourse against the Sponsor and the Trust’s other service providers for the services they provide to the Trust, including those relating to the provision of instructions relating to the movement of XLM, is limited. Consequently, a loss may be suffered with respect to the Trust’s XLM that is not covered by insurance and for which no person is liable in damages. As a result, the recourse of the Trust or the shareholders, under New York law, is limited.

The Trust may be required, or the Sponsor may deem it appropriate, to terminate and liquidate at a time that is disadvantageous to shareholders.

Pursuant to the terms of the Trust Agreement, the Trust is required to dissolve under certain circumstances. In addition, the Sponsor may, in its sole discretion, dissolve the Trust for a number of reasons, including if the Sponsor determines, in its sole discretion, that it is desirable or advisable for any reason to discontinue the affairs of the Trust. For example, the Sponsor expects that it may be advisable to discontinue the affairs of the Trust if a federal court upholds an allegation that XLM is a security under the federal securities laws, among other reasons. See “Item 1. Business—Description of the Trust Agreement—Termination of the Trust.”

If the Trust is required to terminate and liquidate, or the Sponsor determines in accordance with the terms of the Trust Agreement that it is appropriate to terminate and liquidate the Trust, such termination and liquidation could occur at a time that is disadvantageous to shareholders, such as when the Actual Exchange Rate of XLM is lower than the Index Price was at the time when shareholders purchased their Shares. In such a case, when the Trust’s XLM is sold as part of its liquidation, the resulting proceeds distributed to shareholders will be less than if the Actual Exchange Rate were higher at the time of sale. See “Item 1. Business—Description of the Trust Agreement—Termination of the Trust” for more information about the termination of the Trust, including when the termination of the Trust may be triggered by events outside the direct control of the Sponsor, the Trustee or the shareholders.

The Trust Agreement includes provisions that limit shareholders’ voting rights and restrict shareholders’ right to bring a derivative action.

Under the Trust Agreement, shareholders have limited voting rights and the Trust will not have regular shareholder meetings. Shareholders take no part in the management or control of the Trust. Accordingly, shareholders do not have the right to authorize actions,

appoint service providers or take other actions as may be taken by shareholders of other trusts or companies where shares carry such rights. The shareholders’ limited voting rights give almost all control under the Trust Agreement to the Sponsor and the Trustee. The Sponsor may take actions in the operation of the Trust that may be adverse to the interests of shareholders and may adversely affect the value of the Shares.

Moreover, pursuant to the terms of the Trust Agreement, shareholders’ statutory right under Delaware law to bring a derivative action (i.e., to initiate a lawsuit in the name of the Trust in order to assert a claim belonging to the Trust against a fiduciary of the Trust or against a third-party when the Trust’s management has refused to do so) is restricted. Under Delaware law, a shareholder may bring a derivative action if the shareholder is a shareholder at the time the action is brought and either (i) was a shareholder at the time of the transaction at issue or (ii) acquired the status of shareholder by operation of law or the Trust’s governing instrument from a person who was a shareholder at the time of the transaction at issue. Additionally, Section 3816(e) of the Delaware Statutory Trust Act specifically provides that a “beneficial owner’s right to bring a derivative action may be subject to such additional standards and restrictions, if any, as are set forth in the governing instrument of the statutory trust, including, without limitation, the requirement that beneficial owners owning a specified beneficial interest in the statutory trust join in the bringing of the derivative action.” In addition to the requirements of applicable law and in accordance with Section 3816(e), the Trust Agreement provides that no shareholder will have the right, power or authority to bring or maintain a derivative action, suit or other proceeding on behalf of the Trust unless two or more shareholders who (i) are not “Affiliates” (as defined in the Trust Agreement and below) of one another and (ii) collectively hold at least 10.0% of the outstanding Shares join in the bringing or maintaining of such action, suit or other proceeding. This provision applies to any derivative actions brought in the name of the Trust other than claims under the federal securities laws and the rules and regulations thereunder.

Due to this additional requirement, a shareholder attempting to bring or maintain a derivative action in the name of the Trust will be required to locate other shareholders with which it is not affiliated and that have sufficient Shares to meet the 10.0% threshold based on the number of Shares outstanding on the date the claim is brought and thereafter throughout the duration of the action, suit or proceeding. This may be difficult and may result in increased costs to a shareholder attempting to seek redress in the name of the Trust in court. Moreover, if shareholders bringing a derivative action, suit or proceeding pursuant to this provision of the Trust Agreement do not hold 10.0% of the outstanding Shares on the date such an action, suit or proceeding is brought, or such shareholders are unable to maintain Share ownership meeting the 10.0% threshold throughout the duration of the action, suit or proceeding, such shareholders’ derivative action may be subject to dismissal. As a result, the Trust Agreement limits the likelihood that a shareholder will be able to successfully assert a derivative action in the name of the Trust, even if such shareholder believes that he or she has a valid derivative action, suit or other proceeding to bring on behalf of the Trust. See “Item 1. Business—Description of the Trust Agreement—The Sponsor—Fiduciary and Regulatory Duties of the Sponsor” for more detail.

The Sponsor is solely responsible for determining the value of the NAV and NAV per Share and any errors, discontinuance or changes in such valuation calculations may have an adverse effect on the value of the Shares.

The Sponsor will determine the Trust’s NAV and NAV per Share on a daily basis as soon as practicable after 4:00 p.m., New York time, on each business day. The Sponsor’s determination is made utilizing data from the operations of the Trust and the Index Price, calculated at 4:00 p.m., New York time, on such day. If the Sponsor determines in good faith that the Index does not reflect an accurate XLM price, then the Sponsor will employ an alternative method to determine the Index Price under the cascading set of rules set forth in “Item 1. Business—Overview of the XLM Industry and Market—XLM Value—The Index and the Index Price— Determination of the Index Price When Index Price is Unavailable.” In the context of applying such rules, the Sponsor may determine in good faith that the alternative method applied does not reflect an accurate XLM price and apply the next alternative method under the cascading set of rules. If the Sponsor determines after employing all of the alternative methods that the Index Price does not reflect an accurate XLM price, the Sponsor will use its best judgment to determine a good faith estimate of the Index Price. There are no predefined criteria to make a good faith assessment in these scenarios and such decisions will be made by the Sponsor in its sole discretion. The Sponsor may calculate the Index Price in a manner that ultimately inaccurately reflects the price of XLM. To the extent that the NAV, NAV per Share or the Index Price are incorrectly calculated, the Sponsor may not be liable for any error and such misreporting of valuation data could adversely affect the value of the Shares and investors could suffer a substantial loss on their investment in the Trust. Moreover, the terms of the Trust Agreement do not prohibit the Sponsor from changing the Index Price used to calculate the NAV and NAV per Share of the Trust. Any such change in the Index Price could affect the value of the Shares and investors could suffer a substantial loss on their investment in the Trust.

Extraordinary expenses resulting from unanticipated events may become payable by the Trust, adversely affecting the value of the Shares.

In consideration for the Sponsor’s Fee, the Sponsor has contractually assumed all ordinary-course operational and periodic expenses of the Trust. See “Item 1. Business—Expenses; Sales of XLM.” Extraordinary expenses incurred by the Trust, such as taxes and governmental charges; expenses and costs of any extraordinary services performed by the Sponsor (or any other service provider) on behalf of the Trust to protect the Trust or the interests of shareholders (including in connection with any Incidental Rights and any IR Virtual Currency); or extraordinary legal fees and expenses are not assumed by the Sponsor and are borne by the Trust. The Sponsor will cause the Trust to either (i) sell XLM, Incidental Rights and/or IR Virtual Currency held by the Trust or (ii) deliver XLM, Incidental

Rights and/or IR Virtual Currency in-kind to the Sponsor to pay Trust expenses not assumed by the Sponsor on an as-needed basis. Accordingly, the Trust may be required to sell or otherwise dispose of XLM, Incidental Rights or IR Virtual Currency at a time when the trading prices for those assets are depressed.

The sale or other disposition of assets of the Trust in order to pay extraordinary expenses could have a negative impact on the value of the Shares for several reasons. These include the following factors:

The Trust’s delivery or sale of XLM to pay expenses or other operations of the Trust could result in shareholders’ incurring tax liability without an associated distribution from the Trust.

Assuming that the Trust is treated as a grantor trust for U.S. federal income tax purposes, each delivery of XLM by the Trust to pay the Sponsor’s Fee or other expenses and each sale of XLM by the Trust to pay Additional Trust Expenses will be a taxable event to beneficial owners of Shares. Thus, the Trust’s payment of expenses could result in beneficial owners of Shares incurring tax liability without an associated distribution from the Trust. Any such tax liability could adversely affect an investment in the Shares. See “Item 1. Business—Certain U.S. Federal Income Tax Consequences.”

The value of the Shares will be adversely affected if the Trust is required to indemnify the Sponsor, the Trustee, the Transfer Agent or the Custodian under the Trust Documents.

Under the Trust Documents, each of the Sponsor, the Trustee, the Transfer Agent and the Custodian has a right to be indemnified by the Trust for certain liabilities or expenses that it incurs without gross negligence, bad faith or willful misconduct on its part. Therefore, the Sponsor, Trustee, Transfer Agent or the Custodian may require that the assets of the Trust be sold in order to cover losses or liability suffered by it. Any sale of that kind would reduce the NAV of the Trust and the value of the Shares.

Intellectual property rights claims may adversely affect the Trust and the value of the Shares.

The Sponsor is not aware of any intellectual property rights claims that may prevent the Trust from operating and holding XLM, Incidental Rights or IR Virtual Currency. However, third parties may assert intellectual property rights claims relating to the operation of the Trust and the mechanics instituted for the investment in, holding of and transfer of XLM, Incidental Rights or IR Virtual Currency. Regardless of the merit of an intellectual property or other legal action, any legal expenses to defend or payments to settle such claims would be extraordinary expenses that would be borne by the Trust through the sale or transfer of its XLM, Incidental Rights or IR Virtual Currency. Additionally, a meritorious intellectual property rights claim could prevent the Trust from operating and force the Sponsor to terminate the Trust and liquidate its XLM, Incidental Rights or IR Virtual Currency. As a result, an intellectual property rights claim against the Trust could adversely affect the value of the Shares.

Pandemics, epidemics and other natural and man-made disasters could negatively impact the value of the Trust’s holdings and/or significantly disrupt its affairs.

Pandemics, epidemics and other natural and man-made disasters could negatively impact demand for digital assets, including XLM, and disrupt the operations of many businesses, including the businesses of the Trust’s service providers. For example, the COVID-19 pandemic had serious adverse effects on the economies and financial markets of many countries, resulting in increased volatility and uncertainty in economies and financial markets of many countries and in the Digital Asset Markets. Moreover, governmental authorities and regulators throughout the world have in the past responded to major economic disruptions, including as a result of the COVID-19 pandemic, with a variety of fiscal and monetary policy changes, such as quantitative easing, new monetary programs and lower interest rates. An unexpected or quick reversal of any such policies, or the ineffectiveness of such policies, could increase volatility in economies and financial market generally, and could specifically increase volatility in the Digital Asset Markets, which could adversely affect the value of XLM and the value of the Shares.

In addition, pandemics, epidemics and other natural and man-made disasters could disrupt the operations of many businesses. For example, in response to the COVID-19 pandemic, many governments imposed travel restrictions and prolonged, closed international borders and enhanced health screenings at ports of entry and elsewhere, which disrupted businesses around the world. While the Sponsor and the Trust were not materially impacted by these events, any disruptions to the Sponsor’s, the Trust’s or the Trust’s service providers’ business operations resulting from business restrictions, quarantines or restrictions on the ability of personnel to perform their jobs as a result of any future pandemic, epidemic or other disaster could have an adverse impact on the Trust’s ability to access critical services and could be disruptive to the affairs of the Trust.

Competition from consortia or private blockchains could have a negative impact on the price of XLM and adversely affect an investment in the Shares.

Many consortia and financial institutions that can be potential XLM users are researching and investing resources into private or permissioned blockchain platforms that could compete with XLM to facilitate cross-currency transactions. Such initiatives, which include R3’s Corda, Hyperledger and the Enterprise Ethereum Alliance, offer financial payment networks and have partnered with many financial institutions. However, unlike the Stellar Ledger, these platforms do not necessarily require a native digital asset like XLM. In evaluating competing distributed ledger technologies, financial institutions may prefer permissioned blockchains without digital assets over the Stellar Ledger and XLM in the future. If financial institutions choose to use permissioned blockchains instead of the Stellar ledger and XLM, the value of XLM may be negatively affected, which would adversely affect an investment in the Shares.

Risk Factors Related to the Regulation of Digital Assets, the Trust and the Shares

A determination that XLM or any other digital asset is a “security” may adversely affect the value of XLM and the value of the Shares, and result in potentially extraordinary, nonrecurring expenses to, or termination of, the Trust.

Depending on its characteristics, a digital asset may be considered a “security” under the federal securities laws. The test for determining whether a particular digital asset is a “security” is complex and difficult to apply, and the outcome is difficult to predict. Public, though non-binding, statements by senior officials at the SEC have indicated that the SEC does not consider Bitcoin or Ether to be securities. In addition, the SEC, by action through delegated authority approving the exchange rule filings to list shares of trusts holding Ether as commodity-based ETPs, appears to have implicitly taken the view that Ether is not a security. The SEC staff has also provided informal assurances via no-action letter to a handful of promoters that their digital assets are not securities. On the other hand, the SEC has brought enforcement actions against the issuers and promoters of several other digital assets on the basis that the digital assets in question are securities. More recently, the SEC has also brought enforcement actions against Digital Asset Trading Platforms for operating unregistered securities exchanges on the basis that certain of the digital assets traded on their platforms are securities.

Whether a digital asset is a security, or offers and sales of a digital asset are securities transactions, under the federal securities laws depends on whether it is included in the lists of instruments making up the definition of “security” in the Securities Act, the Exchange Act and the Investment Company Act. Digital assets as such do not appear in any of these lists, although each list includes the terms “investment contract” and “note,” and the SEC has typically analyzed whether a particular digital asset, or offer and sale of a digital asset, is a security by reference to whether it meets the tests developed by the federal courts interpreting these terms, known as the Howey and Reves tests, respectively. For many digital assets, whether or not the Howey or Reves tests are met is difficult to resolve definitively, and substantial legal arguments can often be made both in favor of and against a particular digital asset, or offer and sale of a digital asset, qualifying as a security under one or both of the Howey and Reves tests. Adding to the complexity, the SEC staff has indicated that the security status of a particular digital asset can change over time as the relevant facts evolve, though recent arguments advanced in ongoing litigation may suggest that the SEC no longer believes the status of a digital asset can change over time.

As part of determining whether XLM is a security, or transactions in XLM by the Sponsor are securities transactions, for purposes of the federal securities laws, the Sponsor takes into account a number of factors, including the various definitions of “security” under the federal securities laws and federal court decisions interpreting elements of these definitions, such as the U.S. Supreme Court’s decisions in the Howey and Reves cases and their progeny, as well as reports, orders, press releases, public statements and speeches by the SEC, its commissioners and its staff providing guidance on when a digital asset, or offer and sale of a digital asset, may be a security for purposes of the federal securities laws. Finally, the Sponsor discusses the security status of XLM and the Sponsor’s transactions in XLM with external counsel, and has received a memorandum regarding the status of XLM and the Sponsor’s transactions in XLM under the federal securities laws from external counsel. Through this process the Sponsor believes that it is applying the proper legal standards in determining that XLM is not a security in light of the uncertainties inherent in the Howey and Reves tests. The Sponsor has been contacted by staff from the SEC’s Divisions of Corporation Finance and Enforcement with respect to securities law compliance matters involving XLM and is engaged in discussions with the SEC staff.

In light of these uncertainties and the fact-based nature of the analysis, the Sponsor acknowledges that the SEC may take a contrary position; and the Sponsor’s conclusion, even if reasonable under the circumstances, would not preclude legal or regulatory action based on the presence of a security.

As is the case with XLM, analyses from counsel typically review the often-complex facts surrounding a particular digital asset’s underlying technology, creation, use case and usage development, distribution and secondary-market trading characteristics as well as contributions and of marketing or promotional efforts by the individuals or organizations who appear to be involved in these activities, among other relevant facts, usually drawing on publicly available information. This information, usually found on the internet, often includes both information that originated with or is attributed to such individuals or organizations, as well as information from third-party sources and databases that may or may not have a connection to such individuals or organizations, and the availability and nature of such information can change over time. The Sponsor and counsel often have no independent means of verifying the accuracy or completeness of such information, and therefore of necessity usually must assume that such information is materially accurate and complete for purposes of the Howey and Reves analyses. After having gathered this information, counsel typically analyzes it in light of the Howey and Reves tests, in order to inform a judgment as to whether or not a federal court would conclude that the digital asset, or transactions in the digital asset, in question is or is not a security for purposes of the federal securities laws. Often, certain factors appear to support a conclusion that the digital asset in question, or transactions in the digital asset, is a security, while other factors appear to support the opposite conclusion, and in such a case counsel endeavors to weigh the importance and relevance of the competing factors. This analytical process is further complicated by the fact that, at present, federal judicial case law applying the relevant tests to digital assets is limited and in some situations inconsistent, with no federal appellate court having considered the question on the merits, as well as the fact that because each digital asset presents its own unique set of relevant facts, it is not always possible to directly analogize the analysis of one digital asset to another. Because of this factual complexity and the current lack of a well-developed body of federal case law applying the relevant tests to a variety of different fact patterns, the Sponsor has not in the past received, and currently does not expect that it would be able to receive, “opinions” of counsel stating that a particular digital asset, or transactions in the digital asset, is or is not a security for federal securities law purposes. The Sponsor understands that as a matter of practice, counsel is generally able to render a legal “opinion” only when the relevant facts are substantially ascertainable and the applicable law is both well-developed and settled. As a result, given the relative novelty of digital assets, the challenges inherent in fact-gathering for particular digital assets, and the fact that federal courts have only recently been tasked with adjudicating the applicability of federal securities law to digital assets, the Sponsor understands that at present counsel is generally not in a position to render a legal “opinion” on the securities law status of XLM or any other particular digital asset.

As such, notwithstanding the Sponsor’s receipt of a memorandum regarding the status of XLM under the federal securities laws from external counsel and the Sponsor’s view that XLM is not a security and the Sponsor’s transactions in XLM are not securities transactions, the SEC or a federal court may in the future take a different view as to the security status of XLM.

If the Sponsor determines that XLM, or transactions in XLM, is a security under the federal securities laws, whether that determination is initially made by the Sponsor itself, or because a federal court upholds an allegation that XLM is a security, the Sponsor does not intend to permit the Trust to continue holding XLM in a way that would violate the federal securities laws (and therefore would either dissolve the Trust or potentially seek to operate the Trust in a manner that complies with the federal securities laws, including the Investment Company Act). Because the legal tests for determining whether a digital asset, or transactions in the digital asset, is or is not a security often leave room for interpretation, for so long as the Sponsor believes there to be good faith grounds to conclude that the Trust’s XLM is not a security, the Sponsor does not intend to dissolve the Trust on the basis that XLM could at some future point be finally determined to be a security.

Any enforcement action by the SEC or a state securities regulator asserting that XLM, or transactions in XLM, is a security, or a court decision to that effect, would be expected to have an immediate material adverse impact on the trading value of XLM, as well as the Shares. This is because the business models behind most digital assets are incompatible with regulations applying to transactions in securities. If a digital asset, or transactions in that digital asset, is determined to be a security, it is likely to become difficult or impossible for the digital asset to be traded, cleared or custodied in the United States through the same channels used by non-security digital assets, which in addition to materially and adversely affecting the trading value of the digital asset is likely to significantly impact its liquidity and market participants’ ability to convert the digital asset into U.S. dollars. Any assertion that a digital asset, or transactions in that digital asset, is a security by the SEC or another regulatory authority may have similar effects.

For example, in 2020 the SEC filed a complaint against the issuer of XRP, Ripple Labs, Inc., and two of its executives, alleging that they raised more than $1.3 billion through XRP sales that should have been registered under the federal securities laws, but were not. In the years prior to the SEC’s action, XRP’s market capitalization at times reached over $140 billion. However, in the weeks following the SEC’s complaint, XRP’s market capitalization fell to less than $10 billion, which was less than half of its market capitalization in the days prior to the complaint. Subsequently, in July 2023, the District Court for the Southern District of New York held that while XRP is not a security, certain sales of XRP to certain buyers (but not other types of sales to other buyers) amounted to “investment contracts” under the Howey test. The District Court entered a final judgment in the case on August 7, 2024. In October 2024, the SEC filed a notice of appeal.

Likewise, in the days following the announcement of SEC enforcement actions against certain digital asset issuers and trading platforms, the price of various digital assets have declined significantly and may continue to decline as such cases advance through the

federal court system. Furthermore, the decisions in cases involving digital assets have resulted in seemingly inconsistent views of different district court judges, including one that explicitly disagreed with the analysis underlying the decision regarding XRP, which underscore the continuing uncertainty around which digital assets, or transactions in digital assets, are securities and what the correct analysis is to determine each digital asset’s status. For example, the conflicting district court opinions and analyses demonstrate that factors such as how long a digital asset has been in existence, how widely held it is, how large its market capitalization is, the manner in which it is offered, sold or promoted, and whether it has actual use in commercial transactions, ultimately may have limited to no bearing on whether the SEC, a state securities regulator or any particular court will find it to be a security.

In addition, if XLM, or transactions in XLM, is in fact a security, the Trust could be considered an unregistered “investment company” under the Investment Company Act, which could necessitate the Trust’s liquidation. In this case, the Trust and the Sponsor may be deemed to have participated in an illegal offering of investment company securities and there is no guarantee that the Sponsor will be able to register the Trust under the Investment Company Act at such time or take such other actions as may be necessary to ensure the Trust’s activities comply with applicable law, which could force the Sponsor to liquidate the Trust.

Moreover, whether or not the Sponsor or the Trust were subject to additional regulatory requirements as a result of any determination that the Trust’s assets or the Trust’s transactions include securities, the Sponsor may nevertheless decide to terminate the Trust, in order, if possible, to liquidate the Trust’s assets while a liquid market still exists. For example, in response to the SEC’s action against the issuer of the digital asset XRP, certain significant market participants announced they would no longer support XRP and announced measures, including the delisting of XRP from major Digital Asset Trading Platforms, resulting in the Sponsor’s conclusion that it was likely to be increasingly difficult for U.S. investors, including Grayscale XRP Trust (XRP), an affiliate of the Trust, to convert XRP into U.S. dollars. The Sponsor subsequently dissolved Grayscale XRP Trust (XRP) and liquidated its assets. The Sponsor has since established a new investment vehicle that holds XRP, Grayscale XRP Trust. If the SEC or a federal court were to determine that XLM is a security or transactions in XLM are securities, it is likely that the value of the Shares of the Trust would decline significantly. Furthermore, if a federal court upholds an allegation that XLM is a security or transactions in XLM are securities, the Trust itself may be terminated and, if practical, its assets liquidated.

Regulatory changes or actions by the U.S. Congress or any U.S. federal or state agencies may affect the value of the Shares or restrict the use of XLM, validating activity or the operation of the Stellar Network or the Digital Asset Markets in a manner that adversely affects the value of the Shares.

As digital assets have grown in both popularity and market size, the U.S. Congress and a number of U.S. federal and state agencies (including FinCEN, OFAC, SEC, CFTC, FINRA, the Consumer Financial Protection Bureau, the Department of Justice, the Department of Homeland Security, the Federal Bureau of Investigation, the IRS, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Federal Reserve and state financial institution and securities regulators) have been examining the operations of digital asset networks, digital asset users and the Digital Asset Markets, with particular focus on the extent to which digital assets can be used to launder the proceeds of illegal activities, evade sanctions, or fund criminal or terrorist enterprises and the safety and soundness of trading platforms and other service providers that hold or custody digital assets for users. Many of these state and federal agencies have issued consumer advisories regarding the risks posed by digital assets to investors. Ongoing and future regulatory actions with respect to digital assets generally or XLM in particular may alter, perhaps to a materially adverse extent, the nature of an investment in the Shares or the ability of the Trust to continue to operate.

In August 2021, the chair of the SEC stated that he believed investors using digital asset trading platforms are not adequately protected, and that activities on the platforms can implicate the securities laws, commodities laws and banking laws, raising a number of issues related to protecting investors and consumers, guarding against illicit activity, and ensuring financial stability. The chair expressed a need for the SEC to have additional authorities to prevent transactions, products, and platforms from “falling between regulatory cracks,” as well as for more resources to protect investors in “this growing and volatile sector.” The chair called for federal legislation centering on digital asset trading, lending, and decentralized finance platforms, seeking “additional plenary authority” to write rules for digital asset trading and lending. There have also been several bills introduced in Congress that propose to establish additional regulation and oversight of the digital asset markets. In connection with these developments, the SEC has taken a number of actions. For example, in February 2023 the SEC proposed amendments to the custody rules under Rule 206(4)-2 of the Investment Advisers Act. The proposed rule changes would amend the definition of a “qualified custodian” under Rule 206(4)-2(d)(6) and expand the current custody rule in 206(4)-2 to cover digital assets and related advisory activities. If enacted as proposed, these rules would likely impose additional regulatory requirements with respect to the custody and storage of digital assets and could lead to additional regulatory oversight of the digital asset ecosystem more broadly. It is also possible that a new Administration and a new Congress in the United States proposes new laws and regulations related to digital assets. Moreover, the failure of FTX in November 2022 and the resulting market turmoil substantially increased regulatory scrutiny in the United States and globally and led to SEC and criminal investigations, enforcement actions and other regulatory activity across the digital asset ecosystem. For example, in June 2023, the SEC brought enforcement actions against Binance and Coinbase, two of the largest digital asset trading platforms, alleging that Binance and Coinbase operated unregistered securities exchanges, brokerages and clearing agencies. In addition, in November 2023, the SEC brought similar charges against Kraken, alleging that it operated as an unregistered securities exchange, brokerage and clearing agency.

It is difficult to predict whether, or when, any of these developments will lead to Congress granting additional authorities to the SEC or other regulators, what the nature of such additional authorities might be, how additional legislation and/or regulatory oversight might impact the ability of Digital Asset Markets to function or how any new regulations or changes to existing regulations might impact the value of digital assets generally and XLM held by the Trust specifically. The consequences of increased federal regulation of digital assets and digital asset activities could have a material adverse effect on the Trust and the Shares.

Law enforcement agencies have often relied on the transparency of blockchains to facilitate investigations. However, certain privacy-enhancing features have been, or are expected to be, introduced to a number of digital asset networks, and these features may provide law enforcement agencies with less visibility into transaction-level data. Europol, the European Union’s law enforcement agency, released a report in October 2017 noting the increased use of privacy-enhancing digital assets like Zcash and Monero in criminal activity on the internet. In August 2022, OFAC banned all transactions by U.S. persons or in the United States involving Tornado Cash, a digital asset protocol designed to obfuscate blockchain transactions, by adding Tornado Cash and certain Ethereum wallet addresses associated with the protocol to its Specially Designated Nationals and Blocked Persons List. A large portion of validators globally, as well as notable industry participants such as Centre, the issuer of the USDC stablecoin, have reportedly complied with the sanctions and blacklisted the sanctioned addresses from interacting with their networks. In October 2023, FinCEN issued a notice of proposed rulemaking that identified convertible virtual currency (CVC) mixing as a class of transactions of primary money laundering concern and proposed requiring covered financial institutions to implement certain recordkeeping and reporting requirements on transactions that covered financial institutions know, suspect, or have reason to suspect involve CVC mixing within or involving jurisdictions outside the United States. In April 2024, the DOJ arrested and charged the developers of the Samourai Wallet mixing service with conspiracy to commit money laundering and conspiracy to operate an unlicensed money transmitting business. In May 2024, a co-founder of Tornado Cash was sentenced to more than five years imprisonment in the Netherlands for developing Tornado Cash on the basis that he had helped launder more than $2 billion worth of digital assets through Tornado Cash. Additional regulatory action with respect to privacy-enhancing digital assets is possible in the future differently, this may change in the future.

The effect of any future regulatory change on the Trust or the digital assets held by the Trust is impossible to predict, but such change could be substantial and adverse to the Trust and the value of the Shares. In particular, with the exception of funds that hold Bitcoin, Ether and certain Bitcoin-based derivatives or Ether-based derivatives, the SEC has not yet approved the listing on a national securities exchange of any non-futures based digital-asset focused exchange-traded fund or exchange-traded product (such product, an “ETF”). If the SEC were to approve any such ETF other than ours in the future, such an ETF may be perceived to be a superior investment product offering exposure to digital assets compared to the Trust because the value of the shares issued by such an ETF would be expected to more closely track the ETF’s net asset value than do Shares of the Trust, and investors may therefore favor investments in such ETFs over investments in the Trust. Any weakening in demand for the Shares compared to digital asset ETF shares could cause the value of the Shares to decline.

Competing industries may have more influence with policymakers than the digital asset industry, which could lead to the adoption of laws and regulations that are harmful to the digital asset industry.

The digital asset industry is relatively new, although its influence over public policy is increasing, and it does not have the same access to policymakers and lobbying organizations in many jurisdictions compared to industries with which digital assets may be seen to compete, such as banking, payments and consumer finance. Competitors from other, more established industries may have greater access to and influence with governmental officials and regulators and may be successful in persuading these policymakers that digital assets require heightened levels of regulation compared to the regulation of traditional financial services. As a result, new laws and regulations may be proposed and adopted in the United States and elsewhere, or existing laws and regulations may be interpreted in new ways, that disfavor or impose compliance burdens on the digital asset industry or digital asset platforms, which could adversely impact the value of XLM and therefore the value of the Shares.

Regulatory changes or other events in foreign jurisdictions may affect the value of the Shares or restrict the use of one or more digital assets, validating activity or the operation of their networks or the Digital Asset Trading Platform Market in a manner that adversely affects the value of the Shares.

Various foreign jurisdictions have, and may continue to adopt laws, regulations or directives that affect the digital asset network, the Digital Asset Markets, and their users, particularly Digital Asset Trading Platforms and service providers that fall within such jurisdictions’ regulatory scope. For example, if foreign jurisdictions in addition to China were to ban or otherwise restrict validating activity, including by regulating or limiting manufacturers’ ability to produce or sell semiconductors or hard drives in connection with validating, it would have a material adverse effect on digital asset networks (including the Stellar Network), the Digital Asset Market, and as a result, impact the value of the Shares.

A number of foreign jurisdictions have recently taken regulatory action aimed at digital asset activities. China has made transacting in cryptocurrencies illegal for Chinese citizens in mainland China, and additional restrictions may follow. Both China and South Korea

have banned initial coin offerings entirely and regulators in other jurisdictions, including Canada, Singapore and Hong Kong, have opined that initial coin offerings may constitute securities offerings subject to local securities regulations. The United Kingdom’s Financial Conduct Authority published final rules in October 2020 banning the sale of derivatives and exchange-traded notes that reference certain types of digital assets, contending that they are “ill-suited” to retail investors citing extreme volatility, valuation challenges and association with financial crime. A new law, the Financial Services and Markets Act 2023 (“FSMA”), received royal assent in June 2023. The FSMA brings digital asset activities within the scope of existing laws governing financial institutions, markets and assets. In addition, the Parliament of the European Union approved the text of MiCA in April 2023, establishing a regulatory framework for digital asset services across the European Union. Certain parts of MiCA became effective as of June 2024 and the remainder will start to apply as of December 2024. MiCA is intended to serve as a comprehensive regulation of digital asset markets and imposes various obligations on digital asset issuers and service providers. The main aims of MiCA are industry regulation, consumer protection, prevention of market abuse and upholding the integrity of digital asset markets. See “Item 1. Business—Overview of the XLM Industry and Market—Government Oversight.”

Foreign laws, regulations or directives may conflict with those of the United States and may negatively impact the acceptance of one or more digital assets by users, merchants and service providers outside the United States and may therefore impede the growth or sustainability of the digital asset economy in the European Union, China, Japan, Russia and the United States and globally, or otherwise negatively affect the value of XLM. Moreover, other events, such as the interruption in telecommunications or internet services, cyber-related terrorist acts, civil disturbances, war or other catastrophes, could also negatively affect the digital asset economy in one or more jurisdictions. For example, Russia’s invasion of Ukraine on February 24, 2022 led to volatility in digital asset prices, with an initial steep decline followed by a sharp rebound in prices. The effect of any future regulatory change or other events on the Trust or XLM is impossible to predict, and such change could be substantial and adverse to the Trust and the value of the Shares.

If regulators or public utilities take actions that restrict or otherwise impact validating activities, there may be a significant decline in such activities, which could adversely affect the Stellar Network and the value of the Shares.

Concerns have been raised about the electricity required to secure and maintain digital asset networks. For example, as of September 30, 2024, over 602 million tera hashes are performed every second in connection with mining on the Bitcoin Network. Although measuring the electricity consumed by this process is difficult because these operations are performed by various machines with varying levels of efficiency, the process consumes a significant amount of energy. The operations of the Stellar Network and other digital asset networks may also consume significant amounts of energy. Further, in addition to the direct energy costs of performing calculations on any given digital asset network, there are indirect costs that impact a network’s total energy consumption, including the costs of cooling the machines that perform these calculations.

Driven by concerns around energy consumption and the impact on public utility companies, various states and cities have implemented, or are considering implementing, moratoriums on validating activity in their jurisdictions. For example, in November 2022, New York imposed a two-year moratorium on new proof-of-work mining permits at fossil fuel plants in the state. A significant reduction in validating activity as a result of such actions could adversely affect the security of the Stellar Network by making it easier for a malicious actor or botnet to manipulate the Blockchain. See “—If a malicious actor or botnet obtains control of more than 50% of the processing power on the Stellar Network, or otherwise obtains control over the Stellar Network through its influence over core developers or otherwise, such actor or botnet could manipulate the Blockchain to adversely affect the value of the Shares or the ability of the Trust to operate.” If regulators or public utilities take action that restricts or otherwise impacts validating activities, such actions could result in decreased security of a digital asset network, including the Stellar Network, and consequently adversely impact the value of the Shares.

If regulators subject an Authorized Participant, the Trust or the Sponsor to regulation as a money service business or money transmitter, this could result in extraordinary expenses to the Authorized Participant, the Trust or the Sponsor and also result in decreased liquidity for the Shares.

To the extent that the activities of any Authorized Participant, the Trust or the Sponsor cause it to be deemed a “money services business” under the regulations promulgated by FinCEN, such Authorized Participant, the Trust or the Sponsor may be required to comply with FinCEN regulations, including those that would mandate the Authorized Participant, the Trust or the Sponsor to implement anti-money laundering programs, make certain reports to FinCEN and maintain certain records. Similarly, the activities of an Authorized Participant, the Trust or the Sponsor may require it to be licensed as a money transmitter or as a digital asset business, such as under the ‘NYDFS’ BitLicense regulations or California’s Digital Financial Assets Law, once effective.

Such additional regulatory obligations may cause the Authorized Participant, the Trust or the Sponsor to incur extraordinary expenses. If the Authorized Participant, the Trust or the Sponsor decided to seek the required licenses, there is no guarantee that they will timely receive them. An Authorized Participant may instead decide to terminate its role as Authorized Participant of the Trust, or the Sponsor may decide to discontinue and wind up the Trust. An Authorized Participant’s decision to cease acting as such may decrease

the liquidity of the Shares, which could adversely affect the value of the Shares, and termination of the Trust in response to the changed regulatory circumstances may be at a time that is disadvantageous to the shareholders.

Additionally, to the extent an Authorized Participant, the Trust or the Sponsor is found to have operated without appropriate state or federal licenses, or registration, it may be subject to investigation, administrative or court proceedings, and civil or criminal monetary fines and penalties, all of which would harm the reputation of the Trust or the Sponsor, decrease the liquidity, and have a material adverse effect on the price of, the Shares.

Regulatory changes or interpretations could obligate the Trust or the Sponsor to register and comply with new regulations, resulting in potentially extraordinary, nonrecurring expenses to the Trust.

Current and future legislation, CFTC and SEC rulemaking and other regulatory developments may impact the manner in which XLM is treated. In particular, XLM may be classified by the CFTC as a “commodity interest” under the CEA or may be classified by the SEC as a “security” under U.S. federal securities laws. It is possible that a new Administration and Congress in the United States creates a new classification for digital assets. The Sponsor and the Trust cannot be certain as to how future regulatory developments will impact the treatment of XLM under the law. In the face of such developments, the required registrations and compliance steps may result in extraordinary, nonrecurring expenses to the Trust. If the Sponsor decides to terminate the Trust in response to the changed regulatory circumstances, the Trust may be dissolved or liquidated at a time that is disadvantageous to shareholders.

To the extent that XLM is deemed to fall within the definition of a “commodity interest” under the CEA, the Trust and the Sponsor may be subject to additional regulation under the CEA and CFTC regulations. The Sponsor may be required to register as a commodity pool operator or commodity trading adviser with the CFTC and become a member of the National Futures Association and may be subject to additional regulatory requirements with respect to the Trust, including disclosure and reporting requirements. These additional requirements may result in extraordinary, recurring and/or nonrecurring expenses of the Trust, thereby materially and adversely impacting the Shares. If the Sponsor determines not to comply with such additional regulatory and registration requirements, the Sponsor will terminate the Trust. Any such termination could result in the liquidation of the Trust’s XLM at a time that is disadvantageous to shareholders.

To the extent that XLM is determined to be a security under U.S. federal securities laws, the Trust and the Sponsor may be subject to additional requirements under the Investment Company Act and the Sponsor may be required to register as an investment adviser under the Investment Advisers Act. Such additional registration may result in extraordinary, recurring and/or non-recurring expenses of the Trust, thereby materially and adversely impacting the Shares. If the Sponsor determines not to comply with such additional regulatory and registration requirements, the Sponsor will terminate the Trust. Any such termination could result in the liquidation of the Trust’s XLM at a time that is disadvantageous to shareholders.

If the IRS were to disagree with, and successfully challenge certain positions the Trust may take, including with respect to Incidental Rights and IR Virtual Currency, the Trust might not qualify as a grantor trust. In addition, the Sponsor has delivered the Pre-Creation Abandonment Notice to the Custodian stating that the Trust is irrevocably abandoning, effective immediately prior to each Creation Time, all Incidental Rights or IR Virtual Currency to which it would otherwise be entitled as of such time and with respect to which it has not taken any Affirmative Action at or prior to such time. There can be no complete assurance that these abandonments will be treated as effective for U.S. federal income tax purposes. If the Trust were treated as owning any asset other than XLM as of any date on which it creates Shares, it would likely cease to qualify as a grantor trust for U.S. federal income tax purposes.

provided to beneficial owners of Shares would be made in a different form. If the Trust were not classified as either a grantor trust or a partnership for U.S. federal income tax purposes, it would be classified as a corporation for such purposes. In that event, the Trust would be subject to entity-level U.S. federal income tax (currently at the rate of 21%) on its net taxable income and certain distributions made by the Trust to shareholders would be treated as taxable dividends to the extent of the Trust’s current and accumulated earnings and profits. Any such dividend distributed to a beneficial owner of Shares that is a non-U.S. person for U.S. federal income tax purposes would be subject to U.S. federal withholding tax at a rate of 30% (or such lower rate as provided in an applicable tax treaty).

The treatment of digital assets for U.S. federal income tax purposes is uncertain.

As discussed in the section entitled “Certain U.S. Federal Income Tax Consequences—Uncertainty Regarding the U.S. Federal Income Tax Treatment of Digital Assets” below, assuming that the Trust is properly treated as a grantor trust for U.S. federal income tax purposes, each beneficial owner of Shares will be treated for U.S. federal income tax purposes as the owner of an undivided interest in the XLM (and, if applicable, any Incidental Rights and/or IR Virtual Currency) held in the Trust. Due to the new and evolving nature of digital assets and the absence of comprehensive guidance with respect to digital assets, many significant aspects of the U.S. federal income tax treatment of digital assets are uncertain.

In 2014, the Internal Revenue Service (“IRS”) released a notice (the “Notice”) discussing certain aspects of “convertible virtual currency” (that is, digital assets that have an equivalent value in fiat currency or that act as substitutes for fiat currency) for U.S. federal income tax purposes and, in particular, stating that such digital assets (i) are “property” (ii) are not “currency” for purposes of the rules relating to foreign currency gain or loss and (iii) may be held as a capital asset. In 2019, the IRS released a revenue ruling and a set of “Frequently Asked Questions” (the “Ruling & FAQs”) that provide some additional guidance, including guidance to the effect that, under certain circumstances, hard forks of digital assets are taxable events giving rise to ordinary income and guidance with respect to the determination of the tax basis of digital assets. However, the Notice and the Ruling & FAQs do not address other significant aspects of the U.S. federal income tax treatment of digital assets. Moreover, although the Ruling & FAQs address the treatment of hard forks, there continues to be uncertainty with respect to the timing and amount of the income inclusions.

There can be no assurance that the IRS will not alter its position with respect to digital assets in the future or that a court would uphold the treatment set forth in the Notice and the Ruling & FAQs. It is also unclear what additional guidance on the treatment of digital assets for U.S. federal income tax purposes may be issued in the future. Any such alteration of the current IRS positions or additional guidance could result in adverse tax consequences for shareholders and could have an adverse effect on the value of XLM. Future developments that may arise with respect to digital assets may increase the uncertainty with respect to the treatment of digital assets for U.S. federal income tax purposes. For example, the Notice addresses only digital assets that are “convertible virtual currency,” and it is conceivable that, as a result of a fork, airdrop or similar occurrence, the Trust will hold certain types of digital assets that are not within the scope of the Notice.

Shareholders are urged to consult their tax advisers regarding the tax consequences of owning and disposing of Shares and digital assets in general.

Future developments regarding the treatment of digital assets for U.S. federal income tax purposes could adversely affect the value of the Shares.

As discussed above, many significant aspects of the U.S. federal income tax treatment of digital assets, such as XLM, are uncertain, and it is unclear what guidance on the treatment of digital assets for U.S. federal income tax purposes may be issued in the future. It is possible that any such guidance would have an adverse effect on the prices of digital assets, including on the price of XLM in the Digital Asset Markets, and therefore may have an adverse effect on the value of the Shares.

Because of the evolving nature of digital assets, it is not possible to predict potential future developments that may arise with respect to digital assets, including forks, airdrops and similar occurrences. Such developments may increase the uncertainty with respect to the treatment of digital assets for U.S. federal income tax purposes. Moreover, certain future developments could render it impossible, or impracticable, for the Trust to continue to be treated as a grantor trust for U.S. federal income tax purposes.

Future developments in the treatment of digital assets for tax purposes other than U.S. federal income tax purposes could adversely affect the value of the Shares.

The taxing authorities of certain states, including New York, (i) have announced that they will follow the Notice with respect to the treatment of digital assets for state income tax purposes and/or (ii) have issued guidance exempting the purchase and/or sale of digital assets for fiat currency from state sales tax. However, it is unclear what further guidance on the treatment of digital assets for state tax purposes may be issued in the future.

The treatment of digital assets for tax purposes by non-U.S. jurisdictions may differ from the treatment of digital assets for U.S. federal, state or local tax purposes. It is possible, for example, that a non-U.S. jurisdiction would impose sales tax or value-added tax on

purchases and sales of digital assets for fiat currency. If a foreign jurisdiction with a significant share of the market of XLM users imposes onerous tax burdens on digital asset users, or imposes sales or value-added tax on purchases and sales of digital assets for fiat currency, such actions could result in decreased demand for XLM in such jurisdiction.

Any future guidance on the treatment of digital assets for state, local or non-U.S. tax purposes could increase the expenses of the Trust and could have an adverse effect on the prices of digital assets, including on the price of XLM in the Digital Asset Markets. As a result, any such future guidance could have an adverse effect on the value of the Shares.

A U.S. tax-exempt shareholder may recognize “unrelated business taxable income” as a consequence of an investment in Shares.

Under the guidance provided in the Ruling & FAQs, hard forks, airdrops and similar occurrences with respect to digital assets will under certain circumstances be treated as taxable events giving rise to ordinary income. In the absence of guidance to the contrary, it is possible that any such income recognized by a U.S. tax-exempt shareholder would constitute “unrelated business taxable income” (“UBTI”). A tax-exempt shareholder should consult its tax adviser regarding whether such shareholder may recognize UBTI as a consequence of an investment in Shares. See “Certain U.S. Federal Income Tax Consequences.”

Non-U.S. Holders may be subject to U.S. federal withholding tax on income derived from forks, airdrops and similar occurrences.

The Ruling & FAQs do not address whether income recognized by a non-U.S. person as a result of a fork, airdrop or similar occurrence could be subject to the 30% withholding tax imposed on U.S.-source “fixed or determinable annual or periodical” income. Non-U.S. Holders (as defined under “Certain U.S. Federal Income Tax Consequences—Tax Consequences to Non-U.S. Holders” below) should assume that, in the absence of guidance, a withholding agent (including the Sponsor) is likely to withhold 30% of any such income recognized by a non-U.S. Holder in respect of its Shares, including by deducting such withheld amounts from proceeds that such non-U.S. Holder would otherwise be entitled to receive in connection with a distribution of Incidental Rights or IR Virtual Currency. See “Certain U.S. Federal Income Tax Consequences.”

Potential conflicts of interest may arise among the Sponsor or its affiliates and the Trust. The Sponsor and its affiliates have no fiduciary duties to the Trust and its shareholders other than as provided in the Trust Agreement, which may permit them to favor their own interests to the detriment of the Trust and its shareholders.

The Sponsor will manage the affairs of the Trust. Conflicts of interest may arise among the Sponsor and its affiliates, including the Authorized Participants, on the one hand, and the Trust and its shareholders, on the other hand. As a result of these conflicts, the Sponsor may favor its own interests and the interests of its affiliates over the Trust and its shareholders. These potential conflicts include, among others, the following:

By purchasing the Shares, shareholders agree and consent to the provisions set forth in the Trust Agreement. See “Item 1. Business—Description of the Trust Agreement.”

For a further discussion of the conflicts of interest among the Sponsor, the distributor, the marketer, Authorized Participant, Liquidity Providers, the Trust and others, see “Item 13. Certain Relationships and Related Transactions and Director Independence.”

Because the Sponsor and the Trust’s sole Authorized Participant are affiliated with each other, the Trust’s Baskets will not be exchanged for XLM in arm’s-length transactions.

The Sponsor is the parent company of Grayscale Securities, LLC, a registered broker dealer currently acting as the sole Authorized Participant, distributor and marketer for the Shares. The Trust issues Creation Baskets in exchange for deposits of XLM. See “Item 1. Business—Description of Creation of Shares.” As the sole Authorized Participant, Grayscale Securities is currently the only entity that may place orders to create Creation Baskets. As a result, the issuance of Creation Baskets does not occur on an arm’s-length basis.

While additional Authorized Participants may be added at any time, subject to the discretion of the Sponsor, the Sponsor may be disincentivized from replacing affiliated service providers due to its affiliated status. In connection with this conflict of interest, shareholders should understand that affiliated service providers will receive fees for providing services to the Trust. Clients of the affiliated service providers may pay commissions at negotiated rates that are greater or less than the rate paid by the Trust. The Sponsor may have an incentive to resolve questions between Grayscale Securities, on the one hand, and the Trust and shareholders, on the other hand, in favor of Grayscale Securities (including, but not limited to, questions as to the calculation of the Basket Amount).

DCG is a minority interest holder in both Coinbase, Inc. and Kraken, which operate two of the Digital Asset Trading Platforms included in the Index Price.

DCG, the sole member and indirect parent company of the Sponsor, holds a minority interest of less than 1.0% in each of Coinbase, Inc., which operates Coinbase, and Kraken. The Sponsor values its digital assets by reference to the Index Price. The Index Price is the

price in U.S. dollars of an XLM derived from the Digital Asset Trading Platforms that are reflected in the Index developed by CoinDesk Indices, Inc. as of 4:00 p.m., New York time, on each business day. Coinbase and Kraken are two of such Digital Asset Trading Platforms included in the Index.

Although DCG does not exercise control over Coinbase or Kraken, it is possible that investors could have concerns that DCG could influence market data provided by these Digital Asset Trading Platforms in a way that benefits DCG, for example by artificially inflating the values of XLM in order to increase the Sponsor’s fees. This could make the Trust’s Shares less attractive to investors than the shares of similar vehicles that do not present these concerns, adversely affect investor sentiment about the Trust and negatively affect Share trading prices.

DCG holds a minority interest in the parent company of the Custodian, which could lead DCG to cause the Sponsor to take actions that favor the Custodian’s interests over the Trust’s interests.

Coinbase, Inc. is also the parent company of the Custodian, Coinbase Custody Trust Company, LLC. The Custodian serves as a fiduciary and custodian on the Trust’s behalf, and is responsible for safeguarding the XLM and Incidental Rights and/or IR Virtual Currency held by the Trust, and holding the private keys that provide access to the Trust’s digital wallets and vaults. DCG’s minority interest of less than 1.0% in the parent company of the Custodian may present risks to shareholders to the extent DCG causes the Sponsor to favor the Custodian’s interests over the interests of the Trust or its shareholders with respect to, for example, fees charged and the quality of service provided by the Custodian. Similarly, it is possible that investors could have concerns that DCG’s interest in Coinbase, Inc. could cause it to refrain from taking actions that are in the best interests of the Trust but that could harm the Custodian. This could make the Trust’s Shares less attractive to investors than the shares of similar vehicles that do not present these concerns, adversely affect investor sentiment about the Trust and negatively affect Share trading prices.

Shareholders cannot be assured of the Sponsor’s continued services, the discontinuance of which may be detrimental to the Trust.

Shareholders cannot be assured that the Sponsor will be willing or able to continue to serve as sponsor to the Trust for any length of time. If the Sponsor discontinues its activities on behalf of the Trust and a substitute sponsor is not appointed, the Trust will terminate and liquidate its XLM.

Appointment of a substitute sponsor will not guarantee the Trust’s continued operation, successful or otherwise. Because a substitute sponsor may have no experience managing a digital asset financial vehicle, a substitute sponsor may not have the experience, knowledge or expertise required to ensure that the Trust will operate successfully or continue to operate at all. Therefore, the appointment of a substitute sponsor may not necessarily be beneficial to the Trust and the Trust may terminate. See “Item 13. Certain Relationships and Related Transactions and Director Independence—The Sponsor.”

Although the Custodian is a fiduciary with respect to the Trust’s assets, if the Custodian resigns or is removed by the Sponsor or otherwise, without replacement, it would trigger early termination of the Trust.

The Custodian is a fiduciary under § 100 of the New York Banking Law and a qualified custodian for purposes of Rule 206(4)-2(d)(6) under the Investment Advisers Act and is licensed to custody the Trust’s XLM in trust on the Trust’s behalf. However, the SEC has recently released proposed amendments to rule 206(4)-2 that, if enacted as proposed, would amend the definition of a “qualified custodian” under Rule 206(4)-2(d)(6). Executive officers of the Custodian’s parent company have made public statements indicating that the Custodian will remain a qualified custodian under the proposed SEC rule, if enacted as currently proposed. However, there can be no assurance that the Custodian would continue to qualify as a “qualified custodian” under a final rule.

Furthermore, during the initial term, the Custodian may terminate the Custodian Agreement for Cause (as defined in “Description of the Custodian Agreement—Termination”) at any time, and after the initial term, the Custodian can terminate the Agreement for any reason upon the notice period provided under the Custodian Agreement. If the Custodian resigns or is removed by the Sponsor or otherwise, without replacement, the Trust will dissolve in accordance with the terms of the Trust Agreement.

Shareholders may be adversely affected by the lack of independent advisers representing investors in the Trust.

The Sponsor has consulted with counsel, accountants and other advisers regarding the formation and operation of the Trust. No counsel was appointed to represent investors in connection with the formation of the Trust or the establishment of the terms of the Trust Agreement and the Shares. Moreover, no counsel has been appointed to represent an investor in connection with the offering of the Shares. Accordingly, an investor should consult his, her or its own legal, tax and financial advisers regarding the desirability of the value of the Shares. Lack of such consultation may lead to an undesirable investment decision with respect to investment in the Shares.

To prevent, detect and respond to information security threats, the Sponsor maintains a cyber risk management program. The program is supervised by an in-house dedicated Chief Information Security Officer (“CISO”), with over 15 years of experience in financial services risk management, whose team is responsible for leading enterprise-wide cybersecurity strategy, policy, standards, architecture, and processes. The Enterprise Risk Committee (“ERC”), which includes members of management of the Sponsor, receives regular reports from the CISO on, among other things, the Sponsor’s cyber risks and threats, the status of projects to strengthen the Sponsor’s information security systems, assessments of the Sponsor’s security program and the emerging threat landscape.

The CISO updates the ERC and the Board quarterly. These regular reports include the Sponsor’s performance preparing for, preventing, detecting, responding to, and recovering from, cyber incidents. The CISO also promptly informs and updates the ERC and the Board of the Sponsor about any information security incidents that may pose a material risk to the Sponsor. The Sponsor contracts an independent third party to conduct a full cyber risk assessment annually, and the results of those assessments are reported to the ERC and the Board. Material outcomes from any penetration testing, vulnerability scanning, and business continuity or disaster recovery testing are additionally reported to the ERC and Board.

The Sponsor’s Security Awareness Program includes training that reinforces the Sponsor’s Information Security policies, standards, and practices, and the expectation that employees will comply with these policies. The Security Awareness Program engages personnel through training on how to identify potential cybersecurity risks and protect the Sponsor’s resources and information. This training is mandatory for all employees upon onboarding at the firm and again annually, and it is supplemented by firmwide training and testing initiatives, including periodic phishing tests.

The Sponsor administers a Third-Party Risk Management Program at the firm to identify, assess and oversee the risk associated with service providers and third parties involved in the supply chain. Third parties are risk-rated and must adhere to additional security diligence requirements administered with oversight from the CISO according to risk, including cybersecurity diligence questionnaires, evidence validation, SOC report reviews, and/or on-site assessments. Material changes to the program, new, or worsening security risks associated with third parties are reported to the ERC at least quarterly.

There have not been any breaches at the Sponsor or the Trust during the year ended September 30, 2024. However, even though we take steps to employ reasonable cybersecurity efforts, not every cybersecurity incident can be prevented or detected. Therefore, while we believe there are currently no risks from any potential cybersecurity threat or cybersecurity incident that are reasonably likely to have a material effect on our results of operations or financial condition, the likelihood or severity of such risks are difficult to predict.

The Sponsor and an affiliate of the Trust, Grayscale Bitcoin Trust ETF (“Grayscale Bitcoin Trust”), are currently parties to certain legal proceedings. Although the Trust is not a party to these proceedings, the Trust may in the future be subject to legal proceedings or disputes.

On January 30, 2023, Osprey Funds, LLC (“Osprey”) filed a suit in Connecticut Superior Court against the Sponsor alleging that statements the Sponsor made in its advertising and promotion of Grayscale Bitcoin Trust violated the Connecticut Unfair Trade Practices Act, and seeking statutory damages and injunctive relief. On April 17, 2023, the Sponsor filed a motion to dismiss the complaint and, following briefing, a hearing on the motion to dismiss was held on June 26, 2023. On October 23, 2023, the Court denied the Sponsor’s motion to dismiss. On November 6, 2023, the Sponsor filed a motion for reargument of the Court’s order denying the Sponsor’s motion to dismiss. On November 16, 2023, Osprey filed an opposition to the Sponsor’s motion for reargument, and on November 30, 2023, the Sponsor filed a reply in further support of its motion for reargument. On March 11, 2024, the Court denied the Sponsor’s motion for reargument. On March 25, 2024, the Sponsor filed an application for interlocutory appeal. On March 28, 2024, Osprey filed an opposition to the Sponsor’s application for interlocutory appeal. On April 1, 2024, the Court denied the Sponsor’s application for interlocutory appeal. On April 10, 2024, Osprey filed a motion to amend the complaint. The amended complaint went into effect on April 25, 2024. A scheduling order was entered by the Court with trial scheduled to begin on July 15, 2025. On July 31, 2024, the Sponsor filed a motion to strike the amended complaint. On August 30, 2024, Osprey filed an opposition to the Sponsor’s motion to strike the amended complaint. On October 11, 2024, the Court denied the Sponsor’s motion to strike. The Sponsor and Grayscale Bitcoin Trust believe this lawsuit is without merit and intend to vigorously defend against it.

As of the date of this Annual Report, the Sponsor does not expect the foregoing proceedings to have a material adverse effect on the Trust’s business, financial condition or results of operations.

The Sponsor and/or the Trust may be subject to additional legal proceedings and disputes in the future.

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Prior to October 3, 2022, Shares were distributed by Genesis, acting as the sole Authorized Participant, through sales in private placement transactions exempt from the registration requirements of the Securities Act pursuant to Rule 506(c) thereunder. Since October 3, 2022, Grayscale Securities has been the only acting Authorized Participant of the Trust and Liquidity Provider(s) have been engaged to source XLM in connection with the creation of Shares. The Shares are quoted on OTCQX under the ticker symbol “GXLM.” Over-the-counter market quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.

As of September 30, 2024, there were approximately 37 holders of record. This includes Cede & Co. as nominee for DTC for the Shares traded on OTCQX, but not its direct participants. Therefore, this number does not include the individual holders who have bought Shares on OTCQX or transferred their eligible Shares to their brokerage accounts. Because most of the Trust’s Shares are held by brokers and other institutions on behalf of shareholders, we are unable to estimate the total number of shareholders represented by these record holders.

截至2024年9月30日，註冊人已根據證券法規則D規則501的含義，以參考每股資產淨值確定的不同價格向選定的「認可投資者」分發了1,224,400股股票。這些股票是根據證券法D規則506(C)正在進行的發行而出售的。從2022年10月3日開始，灰色證券公司作爲這些分銷的授權參與者。對於2022年10月3日之前的所有此類分發，Genesis作爲授權參與者。作爲這些銷售的交換，信託基金總共收到了113,313,403.21584900 XLM。於截至2024年9月30日止年度內，註冊人並無派發任何股份。由於股票已經並將繼續定期創建和發行，證券法中使用的「分發」一詞可能會時不時地發生。因此，根據證券法第2(A)(11)條的規定，在任何此類期間促進股票發行並擔任分銷商和營銷商的授權參與者可被視爲「承銷商」。並無就此類銷售向獲授權參與者支付承保折扣或佣金。

發行人和關聯購買者購買股權證券-下表列出了截至2024年9月30日的三個月內，申辦者的間接母公司DCG每月在公開市場購買Grayscale Stellar Lumens Trust（XLM）（OTCQX：GXLM）股份的信息：

以下對我們財務狀況和經營業績的討論和分析應與本年度報告其他地方包含的我們的經審計財務報表和相關注釋一起閱讀，並對其進行完整限定，這些財務報表和註釋是根據美國公認會計原則（「美國公認會計原則」）編制的。以下討論可能包含基於我們認爲合理的假設的前瞻性陳述。我們的實際結果可能與這些前瞻性陳述中討論的結果存在重大差異。可能導致或促成這些差異的因素包括但不限於下文和本年度報告其他地方討論的因素，特別是「項目1A.風險因素」和「前瞻性陳述」。

信託是一個被動的實體，由發起人管理和管理，沒有任何官員、董事或員工。該信託持有XLM，並不時發行創設籃子，以換取XLM的存款。作爲一種被動投資工具，信託的投資目標是股份價值(基於每股XLm)，以反映信託持有的XLm的價值，減去信託的費用和其他負債。雖然對這些股票的投資不是對XLM的直接投資，但這些股票旨在爲投資者提供一種具有成本效益和便利的方式，以獲得對XLM的投資敞口。到目前爲止，該信託尚未達到其投資目標，在OTCQX上報價的股票並未反映該信託持有的XLM的價值，減去該信託的費用和其他負債，而是以溢價和折扣價交易，而這些價值有時是相當大的. 信託基金的管理方式不同於商業公司或活躍的投資工具。

該信託認爲投資交易是接收XLm用於股份創建以及交付XLm用於股份贖回或支付XLm費用。目前，該信託不接受股東的贖回請求。該信託按交易日記錄其投資交易，公允價值變化反映爲投資未實現增值或折舊的淨變化。已實現的損益採用特定識別方法計算。已實現的損益與交易相關確認，包括以XLm計算的贊助商費用的結算義務。

爲了確定哪個市場是信託的主要市場（或在沒有主要市場的情況下，最有利的市場），以便根據美國GAAP（「主要市場NV」）計算信託的淨資產價值，信託遵循財務會計準則委員會（「FASB」）會計準則法典（「ASC」）主題820-10，公允價值計量，概述了公允價值會計的應用。ASC 820-10將公允價值確定爲XLm在當前銷售中收到的價格，假設市場參與者之間在計量日進行有序交易。ASC 820-10要求信託假設XLm在其主要市場上出售給市場參與者，或者在沒有主要市場的情況下，出售給最有利的市場。市場參與者被定義爲主要或最有利市場中獨立、知識淵博、願意且能夠進行交易的買家和賣家。

該信託僅從授權參與者（或流動性提供者）收到與創建訂單相關的XLm，並且本身不進行任何數字資產市場的交易。因此，該信託着眼於數字資產市場基於市場的數量和活動水平。授權參與者或流動性提供者可以在經紀市場、經銷商市場、委託人對委託人市場和交易所市場（本年度報告中稱爲「交易平台市場」）中進行交易，每個市場的定義見FASb ASC主術語表（統稱爲「數字資產市場」）。

在確定哪個符合條件的數字資產市場是信託的主要市場時，信託按以下順序審查這些標準：

信託確定其主要市場（或在沒有主要市場的情況下，最有利的市場）每年進行一次季度分析，以確定（i）過去十二個月內每個數字資產市場的交易量和活動水平是否最近發生變化，（ii）是否開發了信託可以訪問的任何數字資產市場，或（iii）如果每個數字資產市場的價格穩定性最近發生變化，這將對主要市場的選擇產生重大影響，並需要改變信託對其主要市場的確定。

信託以下午4：00 XLm的公允價值記錄與創建訂單相關的XLm的成本基礎，紐約時間，爲財務報告目的創建日期。信託記錄的成本基礎可能與授權參與者向投資者出售相應股份所收取的收益不同。

該信託是一家符合美國公認會計准則的投資公司，並遵循FASb ASC主題946的會計和報告指南，金融服務-投資公司.該信託根據其作爲投資公司的會計分類，使用公允價值作爲XLm的會計方法。該信託不是1940年《投資公司法》規定的註冊投資公司。美國GAAP要求管理層做出影響財務報表和隨附註釋中報告金額的估計和假設。實際結果可能與這些估計不同，而且這些差異可能是重大的。

(All下表和後續段落中的金額，除股份、每股、XLm和XLm金額的價格外，均以千計）

截至2024年9月30日止年度，XLM投資的已實現及未實現淨虧損爲(1,352美元)，其中包括轉讓XLM以支付保薦人費用的已實現虧損(260美元)和XLM投資的未實現折舊淨變動(1,092美元)。本年度對XLm的已實現和未實現投資淨虧損是由於XLm價格從2023年9月30日的每XLm 0.11美元貶值到2024年9月30日的每XLm 0.10美元。在截至2024年9月30日的一年中，經營導致的淨資產減少爲1,585美元，其中包括對XLM的投資的已實現和未實現淨虧損，加上保薦人費用233美元。截至2024年9月30日，淨資產增至10,574美元，同比增長28%。淨資產增加是由於期內約34,875,230 XLM價值3,923美元與股份創造有關的XLM對信託的貢獻，但被上述XLM價格折舊及提取約2,115,119 XLM以支付前述保薦人費用所部分抵銷。

截至2023年9月30日的年度，XLm投資的已實現和未實現淨損失爲（230美元），其中包括轉讓XLm以支付贊助商費用的已實現損失（281美元）以及XLm投資未實現折舊的淨變化51美元。今年XLm投資的淨已實現和未實現虧損是由於XLm價格貶值，從2022年9月30日的每XLm 0.12美元降至2023年9月30日的每XLm 0.11美元。截至2023年9月30日止年度，運營導致的淨資產淨減少爲（417美元），其中包括XLm投資的已實現和未實現淨損失，加上贊助商費用187美元。截至2023年9月30日，淨資產降至8，236美元，全年下降5%。淨資產減少是由於上述XLm價格貶值以及提取約1，850，602 XLm以支付上述發起人費用。

截至2022年9月30日止年度，XLm投資的已實現和未實現淨損失爲（12，302美元），其中包括轉讓XLm以支付贊助商費用的已實現損失（93美元）以及XLm投資未實現折舊淨變化（12，209美元）。本年度XLm投資的淨已實現和未實現虧損是由於XLm價格貶值，從2021年9月30日的每XLm 0.28美元降至2022年9月30日的每XLm 0.12美元。截至2022年9月30日止年度，運營導致的淨資產淨減少爲（12，689美元），其中包括XLm投資的已實現和未實現淨損失，加上387美元的發起人費用。截至2022年9月30日，淨資產降至8，653美元，全年下降59%。淨資產減少是由於上述XLm價格貶值以及提取約1，897，452 XLm以支付上述發起人費用。

自成立以來，該信託從未有現金餘額。當在數字資產市場上出售XLm、附帶權利和/或IR虛擬貨幣以代表信託支付額外信託費用時，發起人將努力出售支付費用所需的確切金額的XLm、附帶權利和/或IR虛擬貨幣，以儘量減少信託持有的XLm以外的資產。因此，發起人預計信託不會記錄其運營產生的任何現金流，並且其現金餘額在每個報告期末將爲零。此外，該信託並非任何表外安排的一方。

爲了換取贊助商費用，贊助商同意承擔信託產生的大部分費用。因此，本年度報告涵蓋期間信託的唯一普通費用是贊助商費用。該信託不知道任何合理可能導致其流動性需求發生重大變化的趨勢、需求、條件或事件。

截至2024年9月30日，根據指數價格（非GAAP方法），該信託的收盤淨餘額爲10，586，233美元。截至2024年9月30日，根據信託主要市場（Coinbase）上XLm的數字資產市場價格，該信託的總市值爲10，573，847美元。

截至2023年9月30日，根據指數價格（非GAAP方法），該信託的收盤淨餘額爲8，233，264美元。根據信託主要市場（Coinbase）上XLm的數字資產市場價格，截至2023年9月30日，該信託的總市值爲8，235，823美元。

截至2022年9月30日，根據指數價格（非GAAP方法），該信託的收盤淨餘額爲8，657，706美元。根據信託主要市場（Coinbase）上XLm的數字資產市場價格，截至2022年9月30日，該信託的總市值爲8，653，359美元。

由於XLm價格的變動將直接影響股份的價格，投資者應了解XLm價格的近期變動。然而，投資者還應該注意，XLm價格過去的走勢並不是未來走勢的指標。行動可能受到各種因素的影響，包括但不限於政府監管、服務提供商經歷的安全漏洞以及世界各地的政治和經濟不確定性。

下圖顯示了2018年12月6日（信託開始運營）至2024年9月30日期間信託每股資產淨值與指數價格和信託每股主要市場資產淨值的變化。有關確定信託資產淨值的更多信息，請參閱「第1項。業務-XLm行業和市場概述-XLm價值-指數和指數價格。」

下表顯示了2019年10月1日至2024年9月30日期間指數價格的走勢。在此期間，指數價格範圍爲0.03美元至0.72美元，截至2024年9月30日，直線平均值爲0.16美元。贊助商尚未觀察到指數價格與組成數字資產交易平台個別或整體的平均價格之間存在重大差異。

下表顯示了2019年10月1日至2024年9月30日期間該信託主要市場報告的XLm數字資產市場價格的變化。在此期間，XLm的價格範圍爲0.03美元至0.72美元，截至2024年9月30日，直線平均價格爲0.16美元：

自2021年10月19日以來，該信託股票一直在OTCQX上以代碼GXLm進行報價。OTCQX上的股份價格與每股資產淨值存在顯着差異。2021年10月19日至2024年9月30日，OTCQX上的股票收盤價相對信託每股資產淨值的最大溢價爲461%，平均溢價爲135%，OTCQX上的股票收盤價低於信託每股資產淨值的最大折讓爲35%，平均折扣爲9%。股票收盤價（OTCQX下午4：00報），紐約時間，每個工作日的報價均爲206天折扣。截至2024年9月30日（本期最後一個工作日），信託股票在OTCQX上的報價較信託每股資產淨值溢價111%。

下表列出了OTCQX報告的股票收盤價的高和低範圍、根據美國公認會計原則計算的信託每股主要市場資產淨值以及自2021年10月19日以來各季度信託的每股資產淨值。

下圖列出了2021年10月19日至2024年9月30日期間OTCQX報告的股票歷史收盤價和信託的每股資產淨值。

GXLm溢價/（折扣）：GXLm股價與每股淨資產淨值（非GAAP）（美元）

下圖列出了2021年10月19日至2024年9月30日期間OTCQX報告的股票歷史溢價和折扣以及信託的每股資產淨值。

GXLm溢價/（折扣）：GXLm股價與每股淨資產淨值（非GAAP）（%）

本信託協議並未授權信託借款以支付信託的日常費用。該信託不從事可能使信託或股份持有人面臨任何外幣相關市場風險的外幣交易。該信託不投資衍生金融工具，也沒有海外業務或長期債務工具。

有關其中歸檔的財務報表列表，請參閱F-1頁的財務報表索引。

截至2024年9月30日止年度，與會計師就會計原則或實踐或財務報表披露的任何事宜沒有任何分歧。

該信託維持披露控制和程序，旨在確保在其《交易法》報告中要求披露的信息在SEC規則和表格規定的時間內被記錄、處理、總結和報告，並確保此類信息被積累並傳達給首席執行官和首席財務和會計官。並酌情向申辦者董事會審計委員會通報情況，以便及時就所需披露做出決定。

在發起人首席執行官和首席財務會計官的監督和參與下，發起人對信託的披露控制和程序進行了評估，定義見交易法規則13 a-15（e）。基於此評估，發起人首席執行官和首席財務會計官得出結論，截至2024年9月30日，信託的披露控制和程序有效。

保薦人管理層負責建立和維護交易法規則13a-15(F)和15d-15(F)所界定的對財務報告的充分內部控制。信託基金對財務報告的內部控制是一個程序，旨在根據美國普遍接受的會計原則，爲財務報告的可靠性和爲外部目的編制財務報表提供合理保證。財務報告的內部控制包括以下政策和程序：(1)與保持合理詳細、準確和公平地反映信託資產的交易和處置的記錄有關；(2)提供合理保證，以記錄必要的交易，以便根據公認的會計原則編制財務報表，並且信託的收入和支出僅根據適當的授權進行；(3)提供合理保證，防止或及時發現可能對財務報表產生重大影響的未經授權的信託資產的獲取、使用或處置。

由於其固有的侷限性，財務報告的內部控制可能無法防止或發現錯誤陳述。此外，對未來時期的任何有效性評估的預測都可能面臨控制措施可能因條件變化而變得無效的風險，或者對政策或程序的合規程度可能惡化的風險。

發起人首席執行官兼首席財務會計官評估了截至2024年9月30日信託財務報告內部控制的有效性。在進行此次評估時，他們使用了特雷德韋委員會贊助組織委員會（COSO）在內部控制綜合框架（2013）中規定的標準。他們的評估包括對信託財務報告內部控制設計的評估以及對其財務報告內部控制的運營有效性的測試。根據他們的評估和這些標準，發起人的首席執行官和首席財務會計官得出的結論是，截至2024年9月30日，信託對財務報告保持了有效的內部控制。

由於根據《JOBS法案》，我們是一家「新興成長型公司」，因此只要我們是一家新興成長型公司，我們的獨立註冊會計師事務所就不需要證明我們對財務報告的內部控制的有效性。

在信託最近完成的截至2024年9月30日的財年期間，信託對財務報告的內部控制沒有發生對這些內部控制產生重大影響或合理可能產生重大影響的變化。

該信託沒有任何董事、高級官員或員工.根據信託協議，信託的所有管理職能均已委託給發起人、其代理人及其附屬機構，包括但不限於託管人及其代理人，並由其履行。作爲發起人的官員，發起人的首席執行官Peter Mintzberg和發起人的首席財務官Edward McGee可以以其主要官員的身份爲信託採取某些行動並執行某些協議和認證擔保人

申辦者設有董事會（「董事會」），負責管理和指導申辦者的事務。董事會由Mark Shifke、Matthew Kummell、Mintzberg先生和McGee先生組成，他們還保留了申辦者有限責任公司協議授予他們作爲高級官員的權力。

申辦者設有審計委員會。審計委員會負責監督信託的財務報告流程，包括該流程的風險和控制以及通常由上市公司審計委員會履行的其他監督職能。審計委員會由McGee先生和申辦者首席運營官Hugh Ross組成。

申辦者制定了適用於其高管和代理人的道德準則（「道德準則」）。請發送電子郵件至： 290 Harbor Drive，4日康涅狄格州斯坦福樓06902 或致電贊助商（212）668-1427. 申辦者的道德準則旨在編纂指導申辦者的商業和道德原則，阻止不當行爲，促進誠實和道德行爲，避免利益衝突，並促進遵守適用的政府法律、規則和法規，及時內部報告違規行爲並追究遵守本準則的責任。

現年65歲的Mark Shifke是DCG的首席財務官，自2024年1月以來一直擔任董事會主席。自2021年3月以來，希夫克一直擔任全棧支付和數字銀行平台Dock Ltd.的董事會成員。自2023年9月以來，希夫克一直擔任加密貨幣平台Lumo的董事會成員。施福克先生擁有近40年的財務和金融科技經驗，以及八年以上領導兩家上市公司的首席財務官經驗。在加入DCG之前，Shifke先生曾擔任BillTrust的首席財務官，該公司專注於提供有關支付的AR和基於雲的解決方案，以及移動銀行和支付平台Green Dot(紐約證券交易所股票代碼：GDOT)的首席財務官。此前，希夫克曾領導摩根大通和高盛的團隊，專門負責併購結構和諮詢，以及稅務資產投資。希夫克還曾擔任畢馬威國際結構性金融集團的負責人。希夫克的職業生涯始於戴維斯·波爾克，在那裏他是合夥人。他畢業於杜蘭大學(B.A./J.D.)和紐約大學法學院(LL.M.在稅務方面)。

現年48歲的馬特·庫梅爾是德州儀器集團戰略與運營部門的高級副總裁，自2024年1月以來一直擔任該贊助商的董事。在DCG任職期間，Kummell先生領導該業務的投資後工作，包括與DCG投資組合公司有關的投資運營和價值創造。自2023年12月以來，庫梅爾一直擔任數字資產挖掘和押注公司Foundry的董事會成員。直到2023年11月，庫梅爾一直在CoinDesk，Inc.的董事會任職，CoinDesk，Inc.是一家爲加密資產和區塊鏈技術社區提供數字媒體、活動和信息服務的公司。2012年1月之前，庫梅爾一直擔任金融服務軟件公司德里維克斯公司的董事會成員。在加入DCG之前，Kummell先生是花旗商業諮詢服務團隊的北美負責人，該團隊是花旗市場部專注於機構投資者客戶的戰略諮詢業務。Kummell先生還在Citadel、Balyasny Asset Management和Point 72 Asset Management的前身S.A.C.Capital Advisors擔任過戰略和前臺領導職務。此前，庫梅爾曾在貝恩公司波士頓總部擔任案件小組組長。庫梅爾是達特茅斯學院塔克商學院的兼職教授。他畢業於加州大學洛杉磯分校(B.A.)以及達特茅斯學院塔克商學院(MBA)。

現年56歲的彼得·明茨伯格一直擔任贊助商的首席執行官，自2024年8月以來一直擔任贊助商的董事。明茨伯格從高盛加盟贊助商，他曾在高盛擔任資產和财富管理戰略全球主管。在此之前，他曾在貝萊德、阿波羅、奧本海默基金和景順擔任戰略、併購和投資者關係方面的多個全球領導職務。明茨伯格在客戶類型和資產類別的廣泛基礎上擁有深厚的知識，擁有20多年開發和執行戰略以及創新以推動增長的經驗。明茨伯格的職業生涯始於紐約的麥肯錫公司、舊金山的S和聖保羅的S，專注於金融服務和技術行業。2018年，明茨伯格被校友會評爲拉美裔金融界領袖，並被紐約市夥伴關係選爲2016-2017屆David洛克菲勒研究員。 他獲得了里約熱內盧聯邦大學的工程學學士學位，以及哈佛大學的工商管理碩士學位。

現年41歲的愛德華·麥基自2022年1月以來一直擔任贊助商的首席財務官，並自2024年1月以來一直擔任贊助商的董事。在擔任首席財務官之前，麥基先生自2019年6月起擔任保薦人總裁副財務兼財務總監。在擔任保薦人之前，McGee先生曾在高盛公司擔任會計政策副總裁總裁，爲其美國證券交易委員會財務報告團隊提供服務，協助其財務報表的準備和審查，並在2014年至2019年爲其特殊情況組、招商銀行部門和城市投資組提供美國公認會計准則的解釋、應用和政策制定。2011至2014年間，麥基先生在安永會計師事務所擔任核數師，爲上市公司提供擔保服務。McGee先生在坦帕大學John H.Sykes商學院獲得會計學學士學位，並在新澤西州立大學羅格斯商學院獲得會計碩士學位時以優異成績畢業。McGee先生是在紐約州獲得執照的註冊公共會計師。

休·羅斯現年57歲，自2021年2月以來一直擔任贊助商的首席運營官。在加入贊助商之前，羅斯先生在紐約的投資管理公司Horizon Kinetics LLC擔任了12年的首席運營官，負責運營基礎設施和各種數字資產計劃。在加入Horizon Kinetics之前的十年裏，Ross先生是高盛公司的副總裁總裁，在高盛資產管理公司內部，他曾擔任做多投資經理研究團隊的首席運營官，該團隊當時被稱爲全球經理策略(Global Manager Strategy)。羅斯還擔任過GSAM和高盛私人财富管理業務的合規官。在加入高盛之前，羅斯曾在一家轉讓代理公司擔任內部法律顧問，並開始了他作爲證券業律師的職業生涯，代表經紀自營商和投資顧問。羅斯先生畢業於埃默裏大學Goizueta商學院(B.B.A)和紐約法學院(J.D.)。

項目12. 某些受益人的證券所有權股東和管理以及相關股東事宜

該信託沒有任何董事、高級官員或員工。下表列出了有關股份實際所有權的某些信息：（i）根據轉讓代理人的記錄和向發起人提供的其他所有權信息，據發起人所知，實際擁有大部分股份的每個人;（ii）發起人的每位董事和執行官單獨;及（iii）申辦者作爲一個整體的所有董事和執行人員。

下文所載的受益擁有股份數量和受益所有權百分比基於截至2024年11月18日的已發行股份數量。

根據美國證券交易委員會的規則，受益所有權包括對證券的投票權或投資權。

除非另有說明，上表中列出的每位股東的地址爲Grayscale Investments，LLC，290 Harbor Drive，4日 Floor，Stamford，Connecticut 06902。

申辦者尚未建立正式程序來解決所有潛在的利益衝突。因此，股東可能依賴於發生此類衝突的各方的善意來公平解決衝突。儘管申辦者試圖監控這些衝突，但申辦者確保這些衝突實際上不會對信託造成不利後果是極其困難的（如果不是不可能的話）。

發起人目前打算聲稱，如果任何訴訟指控此類衝突違反了發起人對投資者所承擔的任何義務，股東通過認購信託股份已同意以下利益衝突。

DCG是（i）發起人的唯一成員和間接母公司，以及2022年10月3日至2023年9月12日期間流動性提供者Genesis的母公司，（ii）Grayscale Securities的間接母公司，截至本年度報告日期，唯一代理授權參與者，（iii）指數提供商的前間接母公司（在2023年11月20日出售給無關聯第三方之前），（iv）Coinbase，Inc.的少數股權持有人，該公司運營着Coinbase，Coinbase是指數中的數字資產交易平台之一，也是託管人的母公司，佔其股權不到1.0%，以及（v）Kraken的少數股權持有人，Kraken是指數中的數字資產交易平台之一，佔其股權不到1.0%。

DCG投資了大量數字資產和參與數字資產生態系統的公司，包括交易平台和託管人。DCG對Stellar Network應採取的變更的立場可能不利於有利於信託基金或其股東的立場。此外，在硬分叉之前或之後，DCG關於恒星網絡的一組不兼容的分叉中的哪一個分叉應被視爲「真正」恒星網絡的立場可能不利於最有利於信託基金的立場。

贊助商在適用的情況下在不同客戶和潛在的未來商業企業之間分配其有限資源時存在利益衝突，而贊助商對每個客戶和潛在的未來商業企業負有受託責任。此外，發起人的專業人員還爲信託的其他附屬機構（包括其他幾種數字資產投資工具）及其各自的客戶提供服務。儘管發起人及其專業人員不能也不會將其或他們各自的所有時間或資源投入到信託事務的管理上，但發起人打算投入並促使其專業人員投入足夠的時間和資源來妥善管理信託事務，以符合其或他們各自對信託和其他人的受託義務。

贊助商和Grayscale Securities是彼此的附屬機構，贊助商未來可能會聘請其他附屬服務提供商。由於贊助商的附屬地位，其可能會被取消更換附屬服務提供商的動力。就這種利益衝突而言，股東應該明白，附屬服務提供商將因向信託提供服務而收取費用。附屬服務提供商的客戶可以按照協商的費率支付佣金，該費率高於或低於信託支付的費率。

發起人和任何附屬服務提供商可能會不時就其對信託以及未來對其他客戶的義務提出相互衝突的要求。贊助商和附屬服務提供商的未來業務可能會產生更高的費用，導致員工的付款增加，因此，激勵贊助商和/或附屬服務提供商相應地分配其/其有限資源，以應對信託的潛在損害。

有關信託的一些條款沒有進行公平磋商，並且（在適用的情況下）沒有對信託進行獨立盡職調查。然而，贊助商不會爲信託保留任何附屬服務提供商，如果贊助商有理由相信會故意或故意偏袒任何其他客戶而不是信託。

2022年10月3日之前，信託和贊助商的附屬公司Genesis是唯一的授權參與者，並且是與贊助商和信託簽訂的參與者協議的一方。自2022年10月3日以來，唯一的授權參與者是Grayscale Securities，該信託和贊助商的附屬公司。由於這種隸屬關係，發起人有動力以有利於Grayscale Securities的方式解決Grayscale Securities與信託和股東之間的問題（包括但不限於有關籃子金額計算的問題）。最後，贊助商和DCG的幾名員工是FINRA註冊的代表，他們通過Grayscale Securities維護他們的許可證。

2023年9月12日之前，信託和發起人的附屬公司Genesis已受聘擔任流動性提供者之一。Genesis以流動性提供者的身份與信託的附屬實體進行XLm交易。例如，當贊助商收到XLm的贊助商費用時，它通過Genesis出售了XLm。對於這項服務，Genesis向贊助商收取了交易費，該費用不由信託承擔。此外，申辦者的間接母公司DCG是Genesis的唯一股東和母公司，也是Genesis的客戶，並且可以獨立於信託基金，不時通過Genesis購買或出售XLm。截至2023年9月12日，Genesis不再擔任流動性提供者。

因爲贊助商的官員可能會將XLm交易爲自己的個人交易帳戶（遵守某些內部交易政策和程序）在管理信託帳戶的同時，贊助商官員的活動，根據其受託責任，可能會不時，導致他們在個人交易帳戶中持有與信託頭寸相反的頭寸。贊助商官員的個人交易帳戶記錄將不會供股東查閱。

DCG是指數提供商的間接母公司，直到DCG於2023年11月將指數提供商出售給無關聯第三方。在被DCG出售之前，指數提供商是發起人和信託的附屬機構，並且有動力解決有關指數構建方式以及指數價格計算方式的問題或變更的問題。以有利於發起人和信託的方式。

Marcum LLP（「Marcum」）截至2024年9月30日和2023年9月30日止年度提供的服務費用爲：

在上表中，根據SEC的定義和規則，審計費是爲審計年度報告中包含的信託財務報表而向Marcum支付的專業服務費用 10-K 並審查表格季度報告中包含的財務報表 10-Q, 以及會計師通常提供的與監管備案或業務相關的服務。

該信託基金沒有董事會，因此，對於向其主要會計師事務所支付的費用，沒有審計委員會或預先批准政策。此類決定（包括截至2024年9月30日的財年）由申辦者董事會和審計委員會做出。

請參閱第頁的財務報表索引 F-1 獲取此處提交的財務報表列表。

由於時間表不是必需的、不適用的，或者信息已包含在內，因此省略了時間表。

†本展品的部分（用星號表示）已被省略，因爲註冊人已確定（i）省略的信息不重要，並且（ii）省略的信息屬於註冊人視爲私人或機密的類型。

在本年度報告中，以下引用的術語均具有該術語後面所闡述的含義：

“實際匯率“-對於任何特定資產，在任何時候，信託能夠以美元（或其他適用法定貨幣）出售該資產的每單位價格（扣除任何相關費用後確定），使信託能夠及時支付任何額外信託費用，通過利用申辦者的商業合理努力來獲得最高的價格。

“額外信託費用“-除贊助商費用外，信託發生的非贊助商支付費用的任何費用，包括但不限於：（i）稅款和政府費用，（ii）贊助商提供的任何特殊服務的費用和成本（或任何其他服務提供商）代表信託保護信託或股東的利益（包括與任何附帶權利和任何IR虛擬貨幣有關），（iii）託管人或其他代理人、服務提供商或信託對手的任何賠償，（iv）與股份在任何二級市場上市、報價或交易相關的費用和開支（包括法律、營銷和審計費用和支出）在任何特定財年超過600，000美元的範圍內以及（v）非常法律費用和支出，包括與訴訟、監管執行或調查事項相關的任何法律費用和支出。

“管理員費用“-因信託向信託提供服務而向信託的任何管理人支付的費用，贊助商將向該管理人支付該費用作爲贊助商付費的應收賬款。

“平權行動“-信託在創建股份之前隨時決定收購或放棄特定附帶權利和IR虛擬貨幣。

“座席“-信託任命代表股東就附帶權利和/或IR虛擬貨幣的任何分配行事的人。

“Authorized Participant”—Certain eligible financial institutions that have entered into an agreement with the Trust and the Sponsor concerning the creation of Shares. Each Authorized Participant (i) is a registered broker-dealer, (ii) has entered into a Participant Agreement with the Sponsor and (iii) owns a digital wallet address that is known to the Custodian as belonging to the Authorized Participant or a Liquidity Provider.

“Basket Amount”—On any trade date, the amount of XLM required as of such trade date for each Creation Basket, as determined by dividing (x) the amount of XLM owned by the Trust at 4:00 p.m., New York time, on such trade date, after deducting the amount of XLM representing the U.S. dollar value of accrued but unpaid fees and expenses of the Trust (converted using the Index Price at such time, and carried to the eighth decimal place), by (y) the number of Shares outstanding at such time (with the quotient so obtained calculated to one one-hundred-millionth of one XLM (i.e., carried to the eighth decimal place)), and multiplying such quotient by 100.

“Bitcoin”—A type of digital asset based on an open-source cryptographic protocol existing on the Bitcoin Network.

“Bitcoin Network”—The online, end-user-to-end-user network hosting a public transaction ledger, known as the blockchain, and the source code comprising the basis for the cryptographic and algorithmic protocols governing the Bitcoin Network.

“Blockchain” or “Stellar Ledger”—The public transaction ledger of the Stellar Network on which transactions in XLM are recorded.

“CFTC”—The U.S. Commodity Futures Trading Commission, an independent agency with the mandate to regulate commodity futures and option markets in the United States.

“Covered Person”—The Sponsor and its affiliates. See “Item 1. Business—Description of the Trust Agreement—The Sponsor—Liability of the Sponsor and Indemnification.”

“Creation Basket”—Basket of Shares issued by the Trust in exchange for deposits of the Basket Amount required for each such Creation Basket.

“Creation Time”—With respect to the creation of any Shares by the Trust, the time at which the Trust creates such Shares.

“Custodial Services”—The Custodian’s services that (i) allow XLM to be deposited from a public blockchain address to the Trust’s Digital Asset Account and (ii) allow the Trust and the Sponsor to withdraw XLM from the Trust’s Digital Asset Account to a public blockchain address the Trust or the Sponsor controls pursuant to instructions the Trust or the Sponsor provides to the Custodian.

“Custodian Agreement”—The Amended and Restated Custodial Services Agreement, dated as of June 29, 2022, by and between the Trust and the Sponsor and Custodian that governs the Trust’s and the Sponsor’s use of the Custodial Services provided by the Custodian as a fiduciary with respect to the Trust’s assets.

“Custodian Fee”—Fee payable to the Custodian for services it provides to the Trust, which the Sponsor shall pay to the Custodian as a Sponsor-paid Expense.

“Digital Asset Account”—A segregated custody account controlled and secured by the Custodian to store private keys, which allow for the transfer of ownership or control of the Trust’s XLM on the Trust’s behalf.

“Digital Asset Market”—A “Brokered Market,” “Dealer Market,” “Principal-to-Principal Market” or “Exchange Market” (referred to as “Trading Platform Market” in this Annual Report), as each such term is defined in the Financial Accounting Standards Board Accounting Standards Codification Master Glossary.

“Digital Asset Trading Platform”—An electronic marketplace where trading platform participants may trade, buy and sell XLM based on bid-ask trading. The largest Digital Asset Trading Platforms are online and typically trade on a 24-hour basis, publishing transaction price and volume data.

“Digital Asset Trading Platform Market”—The global trading platform market for the trading of XLM, which consists of transactions on electronic Digital Asset Trading Platforms.

“DTC”—The Depository Trust Company. DTC is a limited purpose trust company organized under New York law, a member of the U.S. Federal Reserve System and a clearing agency registered with the SEC. DTC will act as the securities depository for the Shares.

“FinCEN”—The Financial Crimes Enforcement Network, a bureau of the U.S. Department of the Treasury.

“FINRA”—The Financial Industry Regulatory Authority, Inc., which is the primary regulator in the United States for broker-dealers, including Authorized Participants.

“Genesis”—Genesis Global Trading, Inc., a wholly owned subsidiary of Digital Currency Group, Inc., which served as a Liquidity Provider from October 3, 2022 to September 12, 2023.

“Grayscale Securities”—Grayscale Securities, LLC, a wholly owned subsidiary of the Sponsor, which as of the date of this Annual Report, is the only acting Authorized Participant.

“Incidental Rights”—Rights to acquire, or otherwise establish dominion and control over, any virtual currency or other asset or right, which rights are incident to the Trust’s ownership of XLM and arise without any action of the Trust, or of the Sponsor or Trustee on behalf of the Trust.

“Index License Agreement”—The license agreement, dated as of February 1, 2022, between the Index Provider and the Sponsor governing the Sponsor’s use of the Index for calculation of the Index Price, as amended by Amendment No. 1 thereto and as the same may be amended from time to time.

“Index Price”—The U.S. dollar value of an XLM derived from the Digital Asset Trading Platforms that are reflected in the Index, calculated at 4:00 p.m., New York time, on each business day. See “Item 1. Business—Overview of the XLM Industry and Market—XLM Value—The Index and the Index Price” for a description of how the Index Price is calculated. For purposes of the Trust Agreement, the term XLM Index Price shall mean the Index Price as defined herein.

“Index Provider”—CoinDesk Indices, Inc., a Delaware corporation that publishes the Index. Prior to its sale to an unaffiliated third party on November 20, 2023, DCG was the indirect parent company of CoinDesk Indices, Inc. As a result, CoinDesk Indices, Inc. was an affiliate of the Sponsor and the Trust and was considered a related party of the Trust.

“Investor”—Any investor that has entered into a subscription agreement with an Authorized Participant, pursuant to which such Authorized Participant will act as agent for the investor.

“IR Virtual Currency”—Any virtual currency tokens, or other asset or right, acquired by the Trust through the exercise (subject to the applicable provisions of the Trust Agreement) of any Incidental Right.

“IRS”—The U.S. Internal Revenue Service, a bureau of the U.S. Department of the Treasury.

“Liquidity Provider”—A service provider that facilitates the purchase of XLM in connection with the creation of Baskets.

“Marketing Fee”—Fee payable to the marketer for services it provides to the Trust, which the Sponsor will pay to the marketer as a Sponsor-paid Expense.

“NAV”—The aggregate value, expressed in U.S. dollars, of the Trust’s assets (other than U.S. dollars or other fiat currency), less its liabilities (which include estimated accrued but unpaid fees and expenses) , a non-GAAP metric, calculated in the manner set forth under “Item 1. Business—Valuation of XLM and Determination of NAV.” See also “Item 1. Business—Investment Objective” for a description of the Trust’s Principal Market NAV, as calculated in accordance with U.S. GAAP. Prior to February 7, 2024, NAV was referred to as Digital Asset Holdings. For purposes of the Trust Agreement, the term XLM Holdings shall mean the NAV as defined herein.

“NAV Fee Basis Amount”—The amount on which the Sponsor’s Fee for the Trust is based, as calculated in the manner set forth under “Item 1. Business—Valuation of XLM and Determination of NAV”. For purposes of the Trust Agreement, the term XLM Holdings Fee Basis Amount shall mean the NAV Fee Basis Amount as defined herein.

“Participant Agreement”—An agreement entered into by an Authorized Participant with the Sponsor that provides the procedures for the creation of Baskets and for the delivery of XLM required for Creation Baskets.

“Pre-Creation Abandonment”—The abandonment by the Trust, irrevocably for no direct or indirect consideration, all Incidental Rights and IR Virtual Currency to which the Trust would otherwise be entitled, effective immediately prior to a Creation Time for the Trust.

“Pre-Creation Abandonment Notice”—A notice delivered by the Sponsor to the Custodian, on behalf of the Trust, stating that the Trust is abandoning irrevocably for no direct or indirect consideration, effective immediately prior to each Creation Time, all Incidental Rights and IR Virtual Currency to which it would otherwise be entitled as of such time and with respect to which the Trust has not taken any Affirmative Action at or prior to such time.

“Principal Market NAV”—The net asset value of the Trust determined on a GAAP basis. Prior to February 7, 2024, Principal Market NAV was referred to as NAV.

“Secondary Market”—Any marketplace or other alternative trading system, as determined by the Sponsor, on which the Shares may then be listed, quoted or traded, including but not limited to, the OTCQX Best Market® of OTC Markets Group Inc.

“Shares”—Common units of fractional undivided beneficial interest in, and ownership of, the Trust.

“Sponsor-paid Expenses”—The fees and expenses incurred by the Trust in the ordinary course of its affairs that the Sponsor is obligated to assume and pay, excluding taxes, but including: (i) the Marketing Fee, (ii) the Administrator Fee, (iii) the Custodian Fee and fees for any other security vendor engaged by the Trust, (iv) the Transfer Agent fee, (v) the Trustee fee, (vi) the fees and expenses related to the listing, quotation or trading of the Shares on any Secondary Market (including customary legal, marketing and audit fees and expenses) in an amount up to $600,000 in any given fiscal year, (vii) ordinary course, legal fees and expenses, (viii) audit fees, (ix) regulatory fees, including, if applicable, any fees relating to the registration of the Shares under the Securities Act or the Exchange Act, (x) printing and mailing costs, (xi) costs of maintaining the Trust’s website and (xii) applicable license fees, provided that any expense that qualifies as an Additional Trust Expense will be deemed to be an Additional Trust Expense and not a Sponsor-paid Expense.

“Sponsor’s Fee”—A fee, payable in XLM, which accrues daily in U.S. dollars at an annual rate of 2.5% of the NAV Fee Basis Amount of the Trust as of 4:00 p.m., New York time, on each day; provided that for a day that is not a business day, the calculation of the Sponsor’s Fee will be based on the NAV Fee Basis Amount from the most recent business day, reduced by the accrued and unpaid Sponsor’s Fee for such most recent business day and for each day after such most recent business day and prior to the relevant calculation date.

“Stellar” or “Stellar Network”—The online, end-user-to-end-user network hosting the public transaction ledger, known as the Blockchain, and the source code comprising the basis for the cryptographic and algorithmic protocols governing the Stellar Network. See “Item 1. Business—Overview of the XLM Industry and Market.”

“Stellar Development Foundation” or “SDF”—A non-profit entity that consists of a team of scientists, cryptographers, engineers and advisers from various parts around the world that contributes to the growth and development to the Stellar Network.

“Total Basket Amount”—With respect to any creation order, the applicable Basket Amount multiplied by the number of Baskets being created.

“Transfer Agency and Service Agreement”—The agreement between the Sponsor and the Transfer Agent which sets forth the obligations and responsibilities of the Transfer Agent with respect to transfer agency services and related matters.

“Transfer Agent”—Continental Stock Transfer & Trust Company, a Delaware corporation.

“Transfer Agent Fee”—Fee payable to the Transfer Agent for services it provides to the Trust, which the Sponsor will pay to the Transfer Agent as a Sponsor-paid Expense.

“Treasury Regulations”—The regulations, including proposed or temporary regulations, promulgated under the Code.

“Trust”—Grayscale Stellar Lumens Trust (XLM), a Delaware statutory trust, formed on October 26, 2018 under the DSTA and pursuant to the Trust Agreement.

“Trust Agreement”—The Amended and Restated Declaration of Trust and Trust Agreement between the Trustee and the Sponsor establishing and governing the operations of the Trust, as amended by Amendments No. 1, No. 2, and No. 3 thereto and as the same may be amended from time to time.

“Trustee”— CSC Delaware Trust Company (formerly known as Delaware Trust Company), a Delaware trust company, is the Delaware trustee of the Trust.

“XLM” or “Stellar Lumens”—Stellar Lumens tokens, which are a type of digital asset based on an open-source cryptographic protocol existing on the Stellar Network, comprising units that constitute the assets underlying the Trust’s Shares.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned in the capacities* indicated, thereunto duly authorized.

* The Registrant is a trust and the persons are signing in their capacities as officers or directors of Grayscale Investments, LLC, the Sponsor of the Registrant.

We have audited the accompanying statements of assets and liabilities, including the schedules of investment, of Grayscale Stellar Lumens Trust (XLM) (the “Trust”) as of September 30, 2024, 2023 and 2022, and the related statements of operations and changes in net assets for each of the three years in the three-year period ended September 30, 2024, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Trust as of September 30, 2024, 2023 and 2022, and the results of its operations for each of the three years in the three-year period ended September 30, 2024, in conformity with accounting principles generally accepted in the United States of America.

These financial statements are the responsibility of the management of the Trust’s Sponsor, Grayscale Investments, LLC. Our responsibility is to express an opinion on the Trust’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Trust in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Trust is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Trust's internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

In forming our opinion, we have considered the adequacy of the disclosures included in Note 7 to the financial statements concerning among other things the risks and uncertainties related to the Trust’s investment in Stellar Lumens and Incidental Rights or IR Virtual Currency that arise as a result of the Trust’s investment in Stellar Lumens. The risks and rewards to be recognized by the Trust associated with its investment in Stellar Lumens will be dependent on many factors outside of the Trust’s control. The currently immature nature of the Stellar Lumens market including clearing, settlement, custody and trading mechanisms, the dependency on information technology to sustain Stellar Lumens continuity, as well as valuation and volume volatility all subject Stellar Lumens to unique risks of theft, loss, or other misappropriation as well as valuation uncertainty. Furthermore, these factors also contribute to the significant uncertainty with respect to the future viability and value of Stellar Lumens. Our opinion is not qualified in respect to this matter.

We have served as the Trust’s auditor since 2019 (such date takes into account the acquisition of certain assets of Friedman LLP by Marcum LLP effective September 1, 2022).

1. Organization

Grayscale Stellar Lumens Trust (XLM) (the “Trust”) is a Delaware Statutory Trust that was formed on October 26, 2018 and commenced operations on December 6, 2018. In general, the Trust holds Lumens (“XLM”) and, from time to time, issues common units of fractional undivided beneficial interest (“Shares”) (in minimum baskets of 100 Shares, referred to as “Baskets”) in exchange for XLM. The redemption of Shares is not currently contemplated and the Trust does not currently operate a redemption program. Subject to receipt of regulatory approval and approval by the Sponsor in its sole discretion, the Trust may in the future operate a redemption program. The Trust currently has no intention of seeking regulatory approval to operate an ongoing redemption program. The Trust’s investment objective is for the value of the Shares (based on XLM per Share) to reflect the value of XLM held by the Trust, less the Trust’s expenses and other liabilities. The Trust may also receive Incidental Rights and/or IR Virtual Currency as a result of the Trust’s investment in XLM, in accordance with the terms of the Trust Agreement.

Incidental Rights are rights to claim, or otherwise establish dominion and control over, any virtual currency or other asset or right, which rights are incident to the Trust’s ownership of XLM and arise without any action of the Trust, or of the Sponsor or Trustee on behalf of the Trust; IR Virtual Currency is any virtual currency tokens, or other asset or right, received by the Trust through the exercise (subject to the applicable provisions of the Trust Agreement) of any Incidental Right.

Grayscale Investments, LLC (“Grayscale” or the “Sponsor”) acts as the Sponsor of the Trust and is a wholly owned subsidiary of Digital Currency Group, Inc. (“DCG”). The Sponsor is responsible for the day-to-day administration of the Trust pursuant to the provisions of the Trust Agreement. Grayscale is responsible for preparing and providing annual and quarterly reports on behalf of the Trust to investors and is also responsible for selecting and monitoring the Trust’s service providers. As partial consideration for the Sponsor’s services, the Trust pays Grayscale a Sponsor’s Fee as discussed in Note 6. The Sponsor also acts as the sponsor and manager of other investment products including Grayscale Aave Trust (AAVE), Grayscale Avalanche Trust (AVAX), Grayscale Basic Attention Token Trust (BAT) (OTCQB: GBAT), Grayscale Bitcoin Trust ETF (NYSE Arca: GBTC), Grayscale Bitcoin Mini Trust ETF (NYSE Arca: BTC), Grayscale Bitcoin Cash Trust (BCH) (OTCQX: BCHG), Grayscale Bittensor Trust (TAO), Grayscale Chainlink Trust (LINK) (OTCQX: GLNK), Grayscale Decentraland Trust (MANA) (OTCQX: MANA), Grayscale Ethereum Trust ETF (NYSE Arca: ETHE), Grayscale Ethereum Classic Trust (ETC) (OTCQX: ETCG), Grayscale Ethereum Mini Trust ETF (NYSE Arca: ETH), Grayscale Filecoin Trust (FIL) (OTC Markets: FILG), Grayscale Horizen Trust (ZEN) (OTCQX: HZEN), Grayscale Litecoin Trust (LTC) (OTCQX: LTCN), Grayscale Livepeer Trust (LPT) (OTCQX: GLIV), Grayscale MakerDao Trust (MKR), Grayscale NEAR Trust (NEAR), Grayscale Solana Trust (SOL) (OTCQX: GSOL), Grayscale Stacks Trust (STX), Grayscale Sui Trust (SUI), Grayscale XRP Trust, Grayscale Zcash Trust (ZEC) (OTCQX: ZCSH), Grayscale Decentralized AI Fund LLC, Grayscale Decentralized Finance (DeFi) Fund LLC (OTCQB: DEFG), Grayscale Digital Large Cap Fund LLC (OTCQX: GDLC), and Grayscale Smart Contract Platform Ex Ethereum (ETH) Fund LLC, each of which is an affiliate of the Trust. The following investment products sponsored or managed by the Sponsor are also SEC reporting companies with their shares registered pursuant to Section 12(g) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”): Grayscale Bitcoin Cash Trust (BCH), Grayscale Ethereum Classic Trust (ETC), Grayscale Horizen Trust (ZEN), Grayscale Litecoin Trust (LTC), Grayscale Zcash Trust (ZEC), and Grayscale Digital Large Cap Fund LLC. The following investment products sponsored by the Sponsor are SEC reporting companies with their shares registered pursuant to Section 12(b) of the Exchange Act: Grayscale Bitcoin Trust ETF, Grayscale Ethereum Trust ETF, Grayscale Ethereum Mini Trust ETF, and Grayscale Bitcoin Mini Trust ETF.

Authorized Participants of the Trust are the only entities who may place orders to create or, if permitted, redeem Baskets. Grayscale Securities, LLC (“Grayscale Securities” or, in such capacity, an “Authorized Participant”), a registered broker-dealer and wholly owned subsidiary of the Sponsor, is the only Authorized Participant, and is party to a participant agreement with the Sponsor and the Trust. Additional Authorized Participants may be added at any time, subject to the discretion of the Sponsor. Liquidity Providers who are unaffiliated with the Trust may be engaged from time to time and at any time. Genesis Global Trading, Inc. (“Genesis”), a wholly owned subsidiary of DCG, served as a Liquidity Provider from October 3, 2022 to September 12, 2023.

The custodian of the Trust is Coinbase Custody Trust Company, LLC (the “Custodian”), a third-party service provider. The Custodian is responsible for safeguarding the XLM, Incidental Rights, and IR Virtual Currency held by the Trust, and holding the private key(s) that provide access to the Trust’s digital wallets and vaults.

The transfer agent for the Trust (the “Transfer Agent”) is Continental Stock Transfer & Trust Company. The responsibilities of the Transfer Agent are to maintain creations, redemptions, transfers, and distributions of the Trust’s Shares which are primarily held in book-entry form.

On October 18, 2021, the Trust received notice that its Shares were qualified for public trading on the OTCQX Best Market® (“OTCQX”) of OTC Markets Group, Inc. The Trust’s trading symbol on OTCQX is “GXLM” and the CUSIP number for its Shares is 38963R105.

2. Summary of Significant Accounting Policies

The following is a summary of significant accounting policies followed by the Trust:

The financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). The Trust qualifies as an investment company for accounting purposes pursuant to the accounting and reporting guidance under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 946, Financial Services—Investment Companies. The Trust uses fair value as its method of accounting for XLM in accordance with its classification as an investment company for accounting purposes. The Trust is not a registered investment company under the Investment Company Act of 1940. U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Actual results could differ from those estimates and these differences could be material.

The Trust conducts its transactions in XLM, including receiving XLM for the creation of Shares and delivering XLM for the redemption of Shares and for the payment of the Sponsor’s Fee. At this time, the Trust is not accepting redemption requests from shareholders. Since its inception, the Trust has not held cash or cash equivalents.

Principal Market and Fair Value Determination

To determine which market is the Trust’s principal market (or in the absence of a principal market, the most advantageous market) for purposes of calculating the Trust’s net asset value in accordance with U.S. GAAP (“Principal Market NAV”), the Trust follows ASC Topic 820-10 Fair Value Measurement, which outlines the application of fair value accounting. ASC 820-10 determines fair value to be the price that would be received for XLM in a current sale, which assumes an orderly transaction between market participants on the measurement date. ASC 820-10 requires the Trust to assume that XLM is sold in its principal market to market participants or, in the absence of a principal market, the most advantageous market. Market participants are defined as buyers and sellers in the principal or most advantageous market that are independent, knowledgeable, and willing and able to transact.

The Trust only receives XLM in connection with a creation order from the Authorized Participant (or a Liquidity Provider) and does not itself transact on any Digital Asset Markets. Therefore, the Trust looks to market-based volume and level of activity for Digital Asset Markets. The Authorized Participant(s), or a Liquidity Provider, may transact in a Brokered Market, a Dealer Market, Principal-to-Principal Markets and Exchange Markets (referred to as “Trading Platform Markets” in this Annual Report), each as defined in the FASB ASC Master Glossary (collectively, “Digital Asset Markets”).

In determining which of the eligible Digital Asset Markets is the Trust’s principal market, the Trust reviews these criteria in the following order:

First, the Trust reviews a list of Digital Asset Markets that maintain practices and policies designed to comply with anti-money laundering (“AML”) and know-your-customer (“KYC”) regulations, and non-Digital Asset Trading Platform Markets that the Trust reasonably believes are operating in compliance with applicable law, including federal and state licensing requirements, based upon information and assurances provided to it by each market.

Second, the Trust sorts these Digital Asset Markets from high to low by market-based volume and level of activity of XLM traded on each Digital Asset Market in the trailing twelve months.

Third, the Trust then reviews pricing fluctuations and the degree of variances in price on Digital Asset Markets to identify any material notable variances that may impact the volume or price information of a particular Digital Asset Market.

Fourth, the Trust then selects a Digital Asset Market as its principal market based on the highest market-based volume, level of activity and price stability in comparison to the other Digital Asset Markets on the list. Based on information reasonably available to the Trust, Trading Platform Markets have the greatest volume and level of activity for the asset. The Trust therefore looks to accessible Trading Platform Markets as opposed to the Brokered Market, Dealer Market and Principal-to-Principal Markets to determine its principal market. As a result of the aforementioned analysis, a Trading Platform Market has been selected as the Trust’s principal market.

The Trust determines its principal market (or in the absence of a principal market the most advantageous market) annually and conducts a quarterly analysis to determine (i) if there have been recent changes to each Digital Asset Market’s trading volume and level of activity in the trailing twelve months, (ii) if any Digital Asset Markets have developed that the Trust has access to, or (iii) if recent changes to each Digital Asset Market’s price stability have occurred that would materially impact the selection of the principal market and necessitate a change in the Trust’s determination of its principal market.

The cost basis of XLM received in connection with a creation order is recorded by the Trust at the fair value of XLM at 4:00 p.m., New York time, on the creation date for financial reporting purposes. The cost basis recorded by the Trust may differ from proceeds collected by the Authorized Participant from the sale of the corresponding Shares to investors.

Investment Transactions and Revenue Recognition

The Trust considers investment transactions to be the receipt of XLM for Share creations and the delivery of XLM for Share redemptions or for payment of expenses in XLM. At this time, the Trust is not accepting redemption requests from shareholders. The Trust records its investment transactions on a trade date basis and changes in fair value are reflected as net change in unrealized appreciation or depreciation on investments. Realized gains and losses are calculated using the specific identification method. Realized gains and losses are recognized in connection with transactions including settling obligations for the Sponsor’s Fee in XLM.

Fair Value Measurement

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the ‘exit price’) in an orderly transaction between market participants at the measurement date.

U.S. GAAP utilizes a fair value hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are those that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Trust. Unobservable inputs reflect the Trust’s assumptions about the inputs market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.

The fair value hierarchy is categorized into three levels based on the inputs as follows:

•

Level 1 – Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Trust has the ability to access. Since valuations are based on quoted prices that are readily and regularly available in an active market, these valuations do not entail a significant degree of judgment.

•

Level 2 – Valuations based on quoted prices in markets that are not active or for which significant inputs are observable, either directly or indirectly.

•

Level 3 – Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

The availability of valuation techniques and observable inputs can vary by investment. To the extent that valuations are based on sources that are less observable or unobservable in the market, the determination of fair value requires more judgment. Fair value estimates do not necessarily represent the amounts that may be ultimately realized by the Trust.


			Fair Value Measurement Using
(Amounts in thousands)	Amount at Fair Value		Level 1		Level 2		Level 3
September 30, 2024
Assets
Investment in XLM	$	10,574	$	10,574	$	-	$	-
September 30, 2023
Assets
Investment in XLM	$	8,236	$	8,236	$	-	$	-

Recently Issued Accounting Pronouncements

In December 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-08, Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets (“ASU 2023-08”). ASU 2023-08 is intended to improve the accounting for certain crypto assets by requiring an entity to measure those crypto assets at fair value each reporting period with changes in fair value recognized in net income. The amendments also improve the information provided to investors about an entity’s crypto asset holdings by requiring disclosure about significant holdings, contractual sale restrictions, and changes during the reporting period. ASU 2023-08 is effective for annual and interim reporting periods beginning after December 15, 2024. Early adoption is permitted for both interim and annual financial statements that have not yet been issued. The Trust adopted this new guidance on October 1, 2024, with no material impact on its financial statements and disclosures as the Trust historically used fair value as its method of accounting for XLM in accordance with its classification as an investment company for accounting purposes.

3. Fair Value of XLM

XLM is held by the Custodian on behalf of the Trust and is carried at fair value. As of September 30, 2024, 2023 and 2022 the Trust held 105,860,211.4551950, 73,100,101.0441121 and 74,950,703.0854167 XLM, respectively.

The Trust determined the fair value per XLM to be $0.10, $0.11, and $0.12 on September 30, 2024, 2023 and 2022 respectively, using the price provided at 4:00 p.m., New York time, by the Digital Asset Trading Platform Market considered to be the Trust’s principal market (Coinbase).

The following represents the changes in quantity of XLM and the respective fair value:


(Amounts in thousands, except XLM amounts)	Quantity			Fair Value
Balance at September 30, 2021		76,848,154.9650449		$	21,342
XLM contributed		-			-
XLM distributed for Sponsor’s Fee, related party		(1,897,451.8796282	)		(387	)
Net change in unrealized depreciation on investment in XLM		-			(12,209	)
Net realized loss on investment in XLM		-			(93	)
Balance at September 30, 2022		74,950,703.0854167		$	8,653
XLM contributed		-			-
XLM distributed for Sponsor’s Fee, related party		(1,850,602.0413046	)		(187	)
Net change in unrealized appreciation on investment in XLM		-			51
Net realized loss on investment in XLM		-			(281	)
Balance at September 30, 2023		73,100,101.0441121		$	8,236
XLM contributed		34,875,229.5092218			3,923
XLM distributed for Sponsor’s Fee, related party		(2,115,119.0981389	)		(233	)
Net change in unrealized depreciation on investment in XLM		-			(1,092	)
Net realized loss on investment in XLM		-			(260	)
Balance at September 30, 2024		105,860,211.4551950		$	10,574

The SEC has stated that certain digital assets may be considered “securities” under the federal securities laws. The test for determining whether a particular digital asset is a “security” is complex and difficult to apply, and the outcome is difficult to predict. Public, though non-binding, statements by senior officials at the SEC have indicated that the SEC did not consider Bitcoin or Ether to be securities, and does not currently consider Bitcoin to be a security. In addition, the SEC appears to have implicitly accepted that Ether is not a security (i) by not objecting to Ether futures trading on Commodity Futures Trading Commission-regulated markets under rules designed for futures on non-security commodity underliers and (ii) by approving the listing and trading of exchange-traded products (“ETPs”) that invest in Ether (i.e., approving the redemption of shares of the Trust) under the rules for commodity-based trust shares, without requiring these ETPs to be registered as investment companies. Likewise, in various courts filings and arguments the SEC has distinguished Ether from assets that it claimed were securities, and in judicial opinions, courts have accepted or even assumed that Ether is not a security. Moreover, in a recent settlement with another market participant relating to allegations that it acted as an unregistered broker-dealer for facilitating trading in certain digital assets, the SEC highlighted that the firm would cease trading in all digital assets other than Bitcoin, Bitcoin Cash and Ether—activity that, if the SEC believed Ether was presently a security—would continue to constitute unregistered brokerage activity. The SEC staff has also provided informal assurances via no-action letter to a handful of promoters that their digital assets are not securities. On the other hand, the SEC has brought enforcement actions against the issuers and promoters of several other digital assets on the basis that the digital assets in question are securities and has not formally or explicitly confirmed that it does not deem Ether to be a security.

If XLM is determined to be a “security” under federal or state securities laws by the SEC or any other agency, or in a proceeding in a court of law or otherwise, it may have material adverse consequences for XLM. For example, it may become more difficult for XLM to be traded, cleared and custodied as compared to other digital assets that are not considered to be securities, which could, in turn, negatively affect the liquidity and general acceptance of XLM and cause users to migrate to other digital assets. As such, any determination that XLM is a security under federal or state securities laws may adversely affect the value of XLM and, as a result, an investment in the Shares.

In addition, if XLM is in fact a security, the Trust could be considered an unregistered “investment company” under the Investment Company Act of 1940, which could necessitate the Trust’s liquidation. In this case, the Trust and the Sponsor may be deemed to have participated in an illegal offering of securities and there is no guarantee that the Sponsor will be able to register the Trust under the Investment Company Act of 1940 at such time or take such other actions as may be necessary to ensure the Trust’s activities comply with applicable law, which could force the Sponsor to liquidate the Trust.

To the extent a private key required to access an XLM address is lost, destroyed or otherwise compromised and no backup of the private keys are accessible, the Trust may be unable to access the XLM controlled by the private key and the private key will not be capable of being restored by the Stellar Network. The processes by which XLM transactions are settled are dependent on the XLM peer-to-peer network, and as such, the Trust is subject to operational risk. A risk also exists with respect to previously unknown technical vulnerabilities, which may adversely affect the value of XLM.

The Trust relies on third-party service providers to perform certain functions essential to its operations. Any disruptions to the Trust’s service providers’ business operations resulting from business failures, financial instability, security failures, government mandated regulation or operational problems could have an adverse impact on the Trust’s ability to access critical services and be disruptive to the operations of the Trust.

The Sponsor and the Trust may be subject to various litigation, regulatory investigations, and other legal proceedings that arise in the ordinary course of its business.

8. Quarterly Statements of Operations

Fiscal Year Ended September 30, 2024


	Three Months Ended (unaudited)
(Amounts in thousands)	Dec-31, 2023			Mar-31, 2024			Jun-30, 2024			Sept-30, 2024			Year Ended September 30, 2024
Expenses
Sponsor’s Fee, related party	$	55		$	58		$	60		$	60		$	233
Net investment loss	$	(55	)	$	(58	)	$	(60	)	$	(60	)	$	(233	)
Net realized and unrealized gain (loss) from:
Net realized loss on investment in XLM		(61	)		(59	)		(67	)		(73	)		(260	)
Net change in unrealized appreciation (depreciation) on investment in XLM		1,253			1,012			(4,377	)		1,020			(1,092	)
Net realized and unrealized gain (loss) on investment		1,192			953			(4,444	)		947			(1,352	)
Net increase (decrease) in net assets resulting from operations	$	1,137		$	895		$	(4,504	)	$	887		$	(1,585	)

Fiscal Year Ended September 30, 2023


	Three Months Ended (unaudited)
(Amounts in thousands)	Dec-31, 2022			Mar-31, 2023			Jun-30, 2023			Sept-30, 2023			Year Ended September 30, 2023
Expenses
Sponsor’s Fee, related party	$	46		$	40		$	42		$	59		$	187
Net investment loss	$	(46	)	$	(40	)	$	(42	)	$	(59	)	$	(187	)
Net realized and unrealized (loss) gain from:
Net realized loss on investment in XLM		(73	)		(76	)		(74	)		(58	)		(281	)
Net change in unrealized (depreciation) appreciation on investment in XLM		(3,223	)		2,989			202			83			51
Net realized and unrealized (loss) gain on investment		(3,296	)		2,913			128			25			(230	)
Net (decrease) increase in net assets resulting from operations	$	(3,342	)	$	2,873		$	86		$	(34	)	$	(417	)

9. Financial Highlights Per Share Performance


	Years Ended September 30,
	2024			2023			2022
Per Share Data:
Principal market net asset value, beginning of year	$	9.99		$	10.49		$	25.88
Net decrease in net assets from investment operations:
Net investment loss		(0.24	)		(0.23	)		(0.47	)
Net realized and unrealized loss		(1.11	)		(0.27	)		(14.92	)
Net decrease in net assets resulting from operations		(1.35	)		(0.50	)		(15.39	)
Principal market net asset value, end of year	$	8.64		$	9.99		$	10.49
Total return		-13.51	%		-4.77	%		-59.47	%
Ratios to average net assets:
Net investment loss		-2.50	%		-2.50	%		-2.50	%
Expenses		-2.50	%		-2.50	%		-2.50	%

An individual shareholder’s return, ratios, and per Share performance may vary from those presented above based on the timing of Share transactions. The amount shown for a Share outstanding throughout the period may not correlate with the Statement of Operations for the period due to the number of Shares issued in Creations occurring at an operational value derived from an operating metric as defined in the Trust Agreement.

Total return is calculated assuming an initial investment made at the Principal Market NAV at the beginning of the year and assuming redemption on the last day of the year.


德拉瓦	83-6545098
（州或其他司法管轄區公司或組織）	（國稅局僱主識別號）

290 Harbor Drive， 4這是地板斯坦福, 康乃狄克	06902
（主要行政辦公室地址）	(Zip代碼）



每個班級的標題	交易符號	註冊的每個交易所的名稱
Grayscale Stellar Lumens Trust（XLM）股票	GXLM	N/A


產品貨號	項目標題	頁面
第一部分
項目1.	業務	1
項目1A.	風險因素	46
項目10。	未解決的員工評論	78
項目1C.	網絡安全	79
項目2.	性能	79
項目3.	法律訴訟	80
項目4.	礦山安全披露	80
第二部分
項目5.	註冊人普通股市場、相關股東事項和發行人購買股票證券	81
項目6.	[預留]	81
項目7.	管理層對財務狀況和經營成果的探討與分析	82
項目7A.	市場風險的定量和定性披露	89
項目8.	財務報表和補充數據	89
項目9.	會計和財務披露方面的變化和與會計師的分歧	89
項目9A.	控制和程序	90
項目90。	其他信息	90
項目9 C.	有關阻止檢查的外國司法管轄區的披露	90
第三部分
項目10.	董事、執行官和公司治理	91
項目11.	高管薪酬	92
項目12.	某些受益所有人和管理層的證券所有權以及相關股東事宜	93
項目13.	某些關係和關聯交易以及董事獨立性	93
項目14.	首席會計師費用和服務	95
第四部分
項目15.	展品和財務報表附表	96
項目16.	表格10-k摘要	97
	給出定義的術語的術語表	98


截至2024年9月30日指數中包含的數字資產交易平台	卷（XLM）(1)		市場份額(2)
Coinbase		187,263,178,033		82.50	%
海怪		15,047,633,728		6.63	%
位戳		15,419,873,971		6.79	%
Total XLm-美元交易對		217,730,685,732		95.92	%


	年
	1			2			3
每個XLM的假設價格	$	100.00		$	100.00		$	100.00
贊助商費用		2.50	%		2.50	%		2.50	%
信託份額，開始		100,000.00			100,000.00			100,000.00
XLm in Trust，開始		10,000.00			9,750.00			9,506.25
XLm在信託中的假設價值	$	1,000,000.00		$	975,000.00		$	950,625.00
信託的初始資產淨值	$	1,000,000.00		$	975,000.00		$	950,625.00
交付XLm以支付贊助商費用		250.00			243.75			237.66
XLm in Trust，結束		9,750.00			9,506.25			9,268.59
結束信託資產淨值	$	975,000.00		$	950,625.00		$	926,859.38
每股期末資產淨值	$	9.75		$	9.51		$	9.27
每個XLM的假設價格	$	100.00		$	100.00		$	100.00


☒	根據1934年《證券交易所法》第13或15（d）條提交的年度報告


☐	根據1934年《證券交易所法》第13或15（d）條提交的過渡報告


大型加速文件夾	☐	加速編報公司	☐

非加速歸檔	☒	小型上市公司	☒

		新興成長型公司	☒


期間	(a)購買的GXLm股份總數		(b)GXLM每股平均支付價格		(c)作爲公開宣佈的計劃或計劃的一部分購買的股份總數(1)		(d)根據計劃或計劃可能購買的股票的大致美元價值(1)
							(in數百萬）
2024年7月1日至2024年7月31日		-	$	-		-	$	200.0
2024年8月1日至2024年8月31日		-		-		-		200.0
2024年9月1日至2024年9月30日		-		-		-		200.0
總計		-	$	-		-	$	200.0


	截至9月30日，
	2024		2023		2022
授權股份數量	無限		無限		無限
流通股數量		1,224,400		824,600		824,600
可自由交易的股票數量(1)		864,998		714,743		706,993
擁有至少100股股份的受益持有人數量(2)		36		9		13
記錄持有者人數(2)		37		10		14


	截至9月30日的年份，
	2024			2023			2022
淨已實現和未實現投資損失	$	(1,352	)	$	(230	)	$	(12,302	)
經營淨資產淨減少	$	(1,585	)	$	(417	)	$	(12,689	)
淨資產(1)	$	10,574		$	8,236		$	8,653


	9月30日，
	2024		2023		2022
主要市場XLm價格(1)	$	0.10	$	0.11	$	0.12
每股主要市場資產淨值(2)	$	8.64	$	9.99	$	10.49
指數價格(3)	$	0.10	$	0.11	$	0.12
每股資產淨值(3)	$	8.65	$	9.98	$	10.50


			高			低
期間	平均		指數價格		日期	指數價格		日期	結束期間		最後業務天
截至2020年9月30日的十二個月	$	0.07	$	0.11	8/17/2020	$	0.03	3/16/2020	$	0.07	$	0.07
截至2021年9月30日的十二個月	$	0.31	$	0.72	5/11/2021	$	0.07	10/2/2020	$	0.28	$	0.28
截至2022年9月30日的十二個月	$	0.20	$	0.42	10/16/2021	$	0.10	9/6/2022	$	0.12	$	0.12
截至2023年9月30日的十二個月	$	0.10	$	0.17	7/20/2023	$	0.07	12/29/2022	$	0.11	$	0.12
截至2024年9月30日的十二個月	$	0.11	$	0.16	3/11/2024	$	0.08	7/5/2024	$	0.10	$	0.10
2019年10月1日至2024年9月30日	$	0.16	$	0.72	5/11/2021	$	0.03	3/16/2020	$	0.10	$	0.10


			高			低
期間	平均		數字資產市場價格		日期	數字資產市場價格		日期	結束期間		最後業務天
截至2020年9月30日的十二個月	$	0.07	$	0.11	8/17/2020	$	0.03	3/16/2020	$	0.07	$	0.07
截至2021年9月30日的十二個月	$	0.31	$	0.72	5/11/2021	$	0.07	10/2/2020	$	0.28	$	0.28
截至2022年9月30日的十二個月	$	0.20	$	0.42	10/16/2021	$	0.10	9/6/2022	$	0.12	$	0.12
截至2023年9月30日的十二個月	$	0.10	$	0.17	7/20/2023	$	0.07	12/29/2022	$	0.11	$	0.12
截至2024年9月30日的十二個月	$	0.11	$	0.16	3/11/2024	$	0.08	7/5/2024	$	0.10	$	0.10
2019年10月1日至2024年9月30日	$	0.16	$	0.72	5/11/2021	$	0.03	3/16/2020	$	0.10	$	0.10


	高						低
	OTCQX		主要市場資產淨值按分享(1)		每股資產淨值(2)		OTCQX		主要市場資產淨值按分享(1)		每股資產淨值(2)
2021年日曆
四季度	$	83.47	$	37.29	$	37.25	$	34.00	$	23.09	$	23.16
2022年日曆
一季度	$	38.15	$	26.70	$	26.69	$	15.75	$	15.56	$	15.57
二季度	$	23.99	$	21.56	$	21.58	$	9.31	$	9.31	$	9.31
三季度	$	12.25	$	12.25	$	12.26	$	8.42	$	9.15	$	9.15
四季度	$	11.25	$	11.69	$	11.69	$	5.00	$	6.43	$	6.43
2023年日曆
一季度	$	11.11	$	9.93	$	9.92	$	5.08	$	6.52	$	6.52
二季度	$	51.93	$	10.03	$	10.03	$	7.59	$	6.84	$	6.84
三季度	$	48.15	$	14.91	$	14.88	$	14.65	$	8.51	$	8.51
四季度	$	33.29	$	11.89	$	11.89	$	20.00	$	8.98	$	8.98
2024年日曆
一季度	$	65.25	$	14.03	$	14.02	$	23.05	$	9.53	$	9.53
二季度	$	63.44	$	11.76	$	11.76	$	31.00	$	7.61	$	7.60
三季度	$	42.96	$	9.42	$	9.42	$	16.30	$	7.35	$	7.35


	截至9月30日的年份，
	2024			2023			2022
	(All XLm餘額四捨五入爲最接近的XLM）
XLM：
期初餘額		73,100,101			74,950,703			76,848,155
創作		34,875,230			-			-
贊助商費用，關聯方		(2,115,119	)		(1,850,602	)		(1,897,452	)
期末餘額		105,860,212			73,100,101			74,950,703
應計但未付的贊助商費用，關聯方		-			-			-
期末淨餘額		105,860,212			73,100,101			74,950,703
股份數量：
期初餘額		824,600			824,600			824,600
創作		399,800			-			-
期末餘額		1,224,400			824,600			824,600


實益擁有人姓名或名稱及地址	量和性質有益的所有權		百分比有益的所有權
主要股東：
數字貨幣集團公司(1)(2)(3)		65,753		4.83	%
贊助商董事及執行官：(4)
馬克·希夫克	*		* %
馬修·庫梅爾	*		* %
彼得·明茨伯格	*		* %
愛德華·麥吉	*		* %
休·羅斯	*		* %
贊助商作爲一個整體的董事和執行官	*		* %


	截至9月30日，
	2024		2023
審計費用	$	77,700	$	68,250
總計	$	77,700	$	68,250


Grayscale Investments, LLC as Sponsor of Grayscale Stellar Lumens Trust (XLM)

By:	/s/ Peter Mintzberg
	Name:	Peter Mintzberg
	Title:	Member of the Board of Directors and Chief Executive Officer (Principal Executive Officer)*

By:	/s/ Edward McGee
	Name:	Edward McGee
	Title:	Member of the Board of Directors and Chief Financial Officer (Principal Financial and Accounting Officer)*

By:	/s/ Mark Shifke
	Name:	Mark Shifke
	Title:	Chairman of the Board of Directors Director*

By:	/s/ Matthew Kummell
	Name:	Matthew Kummell
	Title:	Member of the Board of Directors Director*


展品 Number		展品說明

4.1		經修訂及重訂的《信託聲明及信託協議》(以註冊人於2022年5月5日提交的表格10《註冊聲明》附件4.1爲參考而併入)。

4.2		經修訂及重訂的《信託及信託協議聲明》第1號修正案(以註冊人於2022年5月5日提交的表格10《登記聲明》附件4.2作爲參考而納入)。

4.3		經修訂及重訂的《信託聲明及信託協議》的第2號修正案(以註冊人於2022年6月29日提交的表格10《登記聲明》附件4.3爲參考而併入)。

4.4		經修訂和重申的《信託和信託協議宣言》的第3號修正案(通過引用登記人於2024年3月25日提交的當前8-k表格報告的附件4.1併入)。

4.5		信託證書修訂證書(載於經修訂及重訂的《信託聲明及信託協議》第1號修訂附件A)

4.6		保薦人和GrayScale Securities，LLC作爲授權參與者於2022年10月3日簽署的參與者協議(通過引用註冊人於2022年10月3日提交的8-k表格中的附件4.1合併而成)。

4.7		註冊人證券描述(參照註冊人於2022年11月21日提交的10-k表格年度報告附件4.6)。

10.1†		經修訂和重新簽署的保管人協議，日期爲2022年6月29日，保管人和保管人之間的協議(通過參考註冊人於2022年8月5日提交的Form 10-Q季度報告的附件10.1而併入)。

10.2		保薦人與GrayScale Securities，LLC之間的分銷和營銷協議，日期爲2022年10月3日(通過引用註冊人於2022年10月3日提交的表格8-k中的附件10.1合併而成)。

10.3†		索引許可協議，日期爲2022年2月1日，由保薦人和索引提供商(通過引用註冊人於2022年5月5日提交的表格10中的註冊聲明的附件10.3合併而成)。

10.4†		贊助商和索引提供商之間於2023年6月20日簽訂的索引許可協議的第1號修正案(通過引用註冊人於2023年6月23日提交的表格8-k中的附件10.1合併而成).

10.5		轉讓代理和服務協議(通過參考註冊人於2022年5月5日提交的表格10註冊聲明的附件10.4而合併)。

31.1*		首席執行幹事根據2002年《薩班斯-奧克斯利法案》第302條頒發的證書。

31.2*		首席財務和會計幹事根據2002年《薩班斯-奧克斯利法案》第302條出具的證明。

32.1*		根據2002年薩班斯-奧克斯利法案第906條通過的《美國法典》第18編第1350條規定的首席執行官的證明。

32.2*		根據2002年《薩班斯-奧克斯利法案》第906節通過的《美國法典》第18編第1350條規定的首席財務和會計幹事的證明。

101.IN *		內聯MBE實例文檔 - 該實例文檔不會出現在交互式數據文件中，因爲其MBE標籤嵌入在Inline MBE文檔中。

101.SCH*		內聯MBE分類擴展架構文檔

104		封面交互式數據文件-封面交互式數據文件不會出現在交互式數據文件中，因爲其MBE標籤嵌入在內聯MBE文檔中。


		Page
Grayscale Stellar Lumens Trust (XLM) Annual Financial Statements

Report of Independent Registered Public Accounting Firm (Marcum LLP, PCAOB ID 688 )		F-2

Statements of Assets and Liabilities at September 30, 2024 and 2023		F-3

Schedules of Investment at September 30, 2024 and 2023		F-4

Statements of Operations for the years ended September 30, 2024, 2023 and 2022		F-5

Statements of Changes in Net Assets for the years ended September 30, 2024, 2023 and 2022		F-6

Notes to Financial Statements		F-7


	September 30,
	2024		2023
Assets:
Investment in XLM, at fair value (cost $21,909 and $18,479 as of September 30, 2024 and 2023, respectively)	$	10,574	$	8,236
Total assets	$	10,574	$	8,236
Liabilities:
Sponsor’s Fee payable, related party	$	-	$	-
Total liabilities		-		-
Net assets	$	10,574	$	8,236
Shares issued and outstanding, no par value (unlimited Shares authorized)		1,224,400		824,600
Principal market net asset value per Share	$	8.64	$	9.99


September 30, 2024
	Quantity of XLM		Cost		Fair Value		% of Net Assets
Investment in XLM		105,860,211.4551950	$	21,909	$	10,574		100	%
Net assets			$	21,909	$	10,574		100	%

September 30, 2023
	Quantity of XLM		Cost		Fair Value		% of Net Assets
Investment in XLM		73,100,101.0441121	$	18,479	$	8,236		100	%
Net assets			$	18,479	$	8,236		100	%