ETCG

For example, if the Sponsor determines that ETC 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 ETC is a security, the Sponsor does not intend to permit the Trust to continue holding ETC 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 of 1940, as amended (the “Investment Company Act”)).
As of December 31, 2025, each Share represented approximately 0.7850 ETC.
Furthermore, the value of the Trust’s assets will be reported each day on grayscale.com/funds/grayscale-ethereum-classic-trust/. • Minimal Credit Risk .
This contrasts with the other financial products such as CoinShares exchange-traded notes, TeraExchange swaps, futures and options traded on the Chicago Mercantile Exchange and the Intercontinental Exchange (“ICE”) through which investors gain exposure to digital assets through the use of derivatives that are subject to counterparty and credit risks. • Safekeeping System .
For example, ABC Co., a company that distributes charitable donations on behalf of users, could hold donated funds in smart contracts that are paid to charities only if the charity satisfies certain pre-defined conditions.
In addition, since every computation on the Ethereum Classic Network requires processing power, there is a transaction fee involved with the transfer that is paid by the payor.
Summary of an ETC Transaction In an ETC transaction directly on the Ethereum Classic Network between two parties (as opposed to through an intermediary, such as a custodian), the following circumstances must initially be in place: (i) the party seeking to send ETC must have an Ethereum Classic Network public key, and the Ethereum Classic Network must recognize that public key as having sufficient ETC for the transaction; (ii) the receiving party must have an Ethereum Classic Network public key; and (iii) the spending party must have internet access with which to send its spending transaction.
The receiving party must provide the spending party with its public key and allow the Ethereum Classic Blockchain to record the sending of ETC to that public key.
As discussed in greater detail below in “—Creation of New ETC,” Ethereum Classic Network miners record transactions when they solve for and add blocks of information to the Ethereum Classic Blockchain.
Every 14 seconds, on average, a new block is added to the Ethereum Classic Blockchain with the latest transactions processed by the network, and the computer that generated this block is currently awarded approximately 2 ETC.
As more miners join the Ethereum Classic Network and its processing power increases, the Ethereum Classic Network adjusts the complexity of the block-solving equation to maintain a predetermined pace of adding a new block to the Ethereum Classic Blockchain approximately every fourteen seconds.
The previous miner reward of 4 ETC per block was reduced by 20% to 3.2 ETC per block at block number five million in March 2020, reduced 20% further to 2.56 ETC per block in April 2022, and most recently reduced by 20% to 2.048 ETC per block in May 2024.
This deliberately controlled rate of ETC creation means that the amount of ETC in existence will increase at a controlled rate until the amount of ETC in existence reaches the pre-determined of approximately 210 million ETC.
As of December 31, 2025, approximately 154.9 million ETC were outstanding, and the date when the 210 million ETC limitation will be reached is estimated to be the year 2070.
In February 2024, the Ethereum Classic Network implemented the Spiral upgrade was announced that added Ethereum’s Shapella changes excluding its proof-of-stake related updates..
In May 2025, the upcoming Olympia upgrade was announced that would integrate fee-market mechanisms in the style of Ethereum’s EIP-1559 and establish an on-chain treasury and governance framework for the Ethereum Classic Network.
If a modification is accepted by only a percentage of users and miners, a division in the Ethereum Classic Network may occur such that one network will run the pre-modification source code and the other network will run the modified source code.
Core development of the Ethereum Classic source code has increasingly focused on modifications of the Ethereum Classic Network protocol to increase speed and scalability and also allow for financial and non-financial next generation uses.
The Ethereum Classic Network has implemented certain measures intended to mitigate the risk of future attacks, and is continuing to evaluate ways to mitigate future attacks.
This is not intended as an exhaustive list of all forms of attack against the Ethereum Classic Network.
For additional information, see “Risk Factors—Risk Factors Related to Digital Assets.” Market Participants Miners Miners range from ETC enthusiasts to professional mining operations that design and build dedicated machines and data centers, including mining pools, which are groups of miners that act cohesively and combine their processing power to solve blocks (in the case of proof-of-work) or stake coins (in the case of proof-of-stake).
In the year ended December 31, 2025, the Ethereum Classic Network facilitated daily transaction values between approximately $7.1 million and $575.4 million.
For reference, the Bitcoin network facilitated daily transaction values between approximately $2.9 billion and $54.5 billion over the same period.
If the Ethereum Classic Network’s smart contract capabilities are not more widely utilized, it may struggle to compete with other digital assets.
For example, Coinbase, Bitfinex, Kraken, and Crypto.com are some of the largest Digital Asset Trading Platforms by volume traded.
For storing ETC, Coinbase Custody Trust Company, LLC, the Custodian for the Trust, is a digital asset custodian that provides custodial accounts that store ETC for users.
Competition Thousands of digital assets have been developed since the inception of Bitcoin, which is currently one of the most developed digital asset because of the length of time it has been in existence, the investment in the infrastructure that supports it, and the network of individuals and entities that are using Bitcoin in transactions.
While the Ethereum Classic Network has enjoyed some success in its limited history, the aggregate value of outstanding ETC is smaller than that of Bitcoin and Ether and may be eclipsed by the more rapid development of other digital assets.
As of December 31, 2025, the Digital Asset Trading Platforms included in the Index were Bitfinex, Coinbase, Crypto.com and Kraken.
The Sponsor and the Trust reasonably believe each of these Digital Asset Trading Platforms are in material compliance with applicable licensing requirements based on the inclusion criteria and jurisdiction, as detailed below, and maintain practices and policies designed to comply with anti-money laundering (“AML”) and know-your-customer (“KYC”) regulations.
Coinbase: A U.S.-based trading platform that has entities registered as money service businesses (“MSBs”) with the U.S.
Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”), and that is licensed as a virtual currency business under the New York State Department of Financial Services’ (“NYDFS”) BitLicense, licensed as a money transmitter in various U.S. states, and chartered as a limited purpose trust company under New York Banking Law.
Crypto.com : A Singapore-based trading platform that has entities registered as MSBs with FinCEN and that is licensed as a money transmitter in various U.S. states and chartered as a non-depository trust company by the New Hampshire Banking Department.
Kraken: A U.S.-based trading platform that has entities registered as MSBs with FinCEN, and that is licensed as a money transmitter in various U.S. states and chartered as a Special Purpose Depository Institution by the Wyoming Division of Banking.
The below table reflects the trading volume in ETC and market share of the ETC-U.S. dollar trading pair of each of the Digital Asset Trading Platforms included in the Index as of December 31, 2025 (collectively, “Constituent Trading Platforms”), using data since the inception of the Trust: Digital Asset Trading Platforms included in the Index as of December 31, 2025 (1) Volume (ETC) Market Share (2) Coinbase 820,405,427 51.06 % Bitfinex 625,173,927 38.91 % Kraken 116,458,449 7.25 % Crypto.com 3,547,070 0.22 % Total ETC-U.S.
Dollar trading pair 1,565,584,873 97.44 % (1) Market share is calculated using trading volume (in ETC) for certain Digital Asset Trading Platforms including Coinbase, Bitfinex, Kraken and Crypto.com, as well as certain other large U.S.-dollar denominated Digital Asset Trading Platforms that were not included in the Index as of December 31, 2025, including Binance.US (data included from April 1, 2020 through June 26, 2023 and from February 23, 2025), Bitstamp by Robinhood (data included from October 1, 2025), Bittrex (data included from August 21, 2018 through December 3, 2023 and from July 10, 2025 through September 25, 2025), OKCoin (data included from December 25, 2018 through March 1, 2021), and OKX (data included from March 31, 2025).
For example, based on data provided by the Index Provider, on any given day during the year ended December 31, 2025, 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 1.47% 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 0.85%.
Constituent Trading Platform Selection Digital Asset Trading Platforms are selected for inclusion in the Index based on a methodology developed by the Index Provider in alignment with the International Organization of Securities Commissions (“IOSCO”) Principles for Financial Benchmarks.
To qualify as a Constituent Trading Platform, a platform is evaluated across the following core criteria listed below (the “Inclusion Criteria”): • Market Quality: Overall liquidity, trading activity, price reliability, and market stability. • Security: Cybersecurity safeguards, custody practices, and operational risk controls. • Legal and Regulatory: Licensing status, regulatory compliance, and legal transparency. • KYC: Assessment of anti-money laundering (“AML”) and know-your-customer (“KYC”) frameworks, transaction monitoring capabilities, and market oversight. • Data Provision: Quality, accessibility, and reliability of trading data and technical infrastructure. • Transparency: Financial and operational disclosures, including reserve and governance transparency. • Team: Assessment of executive leadership, relevant experience, organizational structure, and service offerings across institutional and retail markets. • Negative Events: The Index Provider may apply a downward adjustment for material adverse events, including data breaches, regulatory penalties, withdrawal freezes, or other significant incidents.
Trading platforms that meet these Inclusion Criteria are also required to be licensed and able to serve customers in one or more of the following jurisdictions: • United States (FinCEN, state regulatory authorities) • United Kingdom (FCA) • European Union (MiCA passport) • Hong Kong (SFC) • Singapore (MAS) • United Arab Emirates, including the emirates of Dubai and Abu Dhabi (VARA, ADGM) • Gibraltar (GFSC) A Digital Asset Trading Platform is removed from the Constituent Trading Platforms when it no longer satisfies the Inclusion Criteria.

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Gone since FY2024

For example, if the Sponsor determines that ETC 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 ETC is a security, the Sponsor does not intend to permit the Trust to continue holding ETC 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 of 1940 (the “Investment Company Act”)).
As of December 31, 2024, each Share represented approximately 0.8049 ETC.
Furthermore, the value of the Trust’s assets will be reported each day on www.grayscale.com/crypto-products/grayscale-ethereum-classic-trust/. • Minimal Credit Risk .
This contrasts with the other financial products such as CoinShares exchange-traded notes, TeraExchange swaps, futures and options traded on the Chicago Mercantile Exchange (“CME”) and the Intercontinental Exchange (“ICE”) through which investors gain exposure to digital assets through the use of derivatives that are subject to counterparty and credit risks. • Safekeeping System .
For example, ABC Co., a company that distributes charitable donations on behalf of users, could hold donated funds in smart contracts that are paid to charities only if the condition that the charity makes an impact is met.
Summary of an ETC Transaction In an ETC transaction directly on the Ethereum Classic Network (as opposed to through an intermediary, such as a custodian) between two parties, the following circumstances must initially be in place: (i) the party seeking to send ETC must have an Ethereum Classic Network public key, and the Ethereum Classic Network must recognize that public key as having sufficient ETC for the transaction; (ii) the receiving party must have an Ethereum Classic Network public key; and (iii) the spending party must have internet access with which to send its spending transaction.
Next, the receiving party must provide the spending party with its public key and allow the Ethereum Classic Blockchain to record the sending of ETC to that public key.
As discussed in greater detail below in “—Creation of New ETC,” Ethereum Classic Network miners record and confirm transactions when they mine and add blocks of information to the Ethereum Classic Blockchain.
Every 14 seconds, on average, a new block is added to the Ethereum Classic Blockchain with the latest transactions processed by the network, and the computer that generated this block is currently awarded 2.6 ETC.
As more miners join the Ethereum Classic Network and its processing power increases, the Ethereum Classic Network adjusts the complexity of the block-solving equation to maintain a predetermined pace of adding a new block to the Ethereum Classic Blockchain approximately every fifteen seconds.
The previous miner reward of 4 ETC per block was reduced by 20% to 3.2 ETC per block at block number five million on March 16, 2020, and reduced 20% to 2.56 ETC per block on April 25, 2022.
This deliberately controlled rate of ETC creation means that the amount of ETC in existence will increase at a controlled rate until the amount of ETC in existence reaches the pre-determined 210 million ETC.
As of December 31, 2024, approximately 150 million ETC were outstanding, and estimates of when the 210 million ETC limitation will be reached range from at or near the year 2070.
In March 2020, 5M20 Era 3 was implemented which reduced block rewards by 20% to 3.2 ETC.
In April 2022, 5M20 Era 4 was implemented which reduced block rewards by a further 20% to 2.56 ETC.
In December 2023, the upcoming Spiral upgrade was announced that would add Ethereum’s Shapella changes excluding its proof-of-stake related updates.
If a modification is accepted by only a percentage of users and miners, a division in the Ethereum Classic Network will occur such that one network will run the pre-modification source code and the other network will run the modified source code.
Core development of the Ethereum Classic source code has increasingly focused on modifications of the Ethereum Classic Network protocol to increase speed and scalability and also allow for non-financial, next generation uses.
Market Participants Miners Miners range from ETC enthusiasts to professional mining operations that design and build dedicated machines and data centers, including mining pools, which are groups of miners that act cohesively and combine their processing power to solve blocks (in the case of proof-of-work) or stake coins (in the case of proof-of-stake).
In the year ended December 31, 2024, the Ethereum Classic Network facilitated daily transaction values between approximately $24.0 million and $2.1 billion.
For reference, the Bitcoin network facilitated daily transaction values between approximately $2.9 billion and $57.6 billion over the same period.
If ETC’s smart contract capabilities are not more widely utilized, it may struggle to compete with other digital assets.
For example, Coinbase, Kraken, and Bitfinex are some of the largest Digital Asset Trading Platforms by volume traded.
Coinbase Custody Trust Company, LLC, the Custodian for the Trust, is a digital asset custodian that provides custodial accounts that store ETC for users.
Competition Thousands of digital assets have been developed since the inception of Bitcoin, which is currently the most developed digital asset because of the length of time it has been in existence, the investment in the infrastructure that supports it, and the network of individuals and entities that are using Bitcoin in transactions.
While ETC has enjoyed some success in its limited history, the aggregate value of outstanding ETC is smaller than that of Bitcoin and Ether and may be eclipsed by the more rapid development of other digital assets.
As of December 31, 2024, the Digital Asset Trading Platforms included in the Index were Coinbase, Kraken and Bitfinex.
As further described below, the Sponsor and the Trust reasonably believe each of these Digital Asset Trading Platforms are in material compliance with applicable licensing requirements based on the Trading Platform Category and Jurisdiction, as detailed below, and maintain practices and policies designed to comply with AML and KYC regulations.
Bitfinex is categorized by the Reference Rate Provider as a “Category 2” trading platform which meets the Inclusion Criteria outlined below but is non-U.S. licensed.
Coinbase: A U.S.-based trading platform registered as a money services business (“MSB”) with the Financial Crimes Enforcement Network (“FinCEN”) and licensed as a virtual currency business under the New York State Department of Financial Services (“NYDFS”) BitLicense, as well as a money transmitter in various U.S. states.
Kraken: A U.S.-based trading platform registered as an MSB with FinCEN and licensed as a money transmitter in various U.S. states.
The below table reflects the trading volume in ETC and market share of the ETC-U.S. dollar trading pairs of each of the Digital Asset Trading Platforms included in the Index as of December 31, 2024 (collectively, “Constituent Trading Platforms”), using data since the inception of the Trust: Digital Asset Trading Platforms included in the Index as of December 31, 2024 (1) Volume (ETC) Market Share (2) Coinbase 778,517,057 50.02 % Bitfinex 622,139,532 39.98 % Kraken 112,150,153 7.21 % Total ETC-U.S.
Dollar trading pair 1,512,806,742 97.21 % (1) On July 28, 2024, the Index Provider added Bitfinex to the Index due to the trading platform meeting the Index Provider’s minimum liquidity requirement, and removed Crypto.com from the Index due to the trading platform failing to meet the Index Provider’s minimum liquidity requirement, as part of its scheduled quarterly review.
(2) Market share is calculated using trading volume (in ETC) for certain Digital Asset Trading Platforms including, Coinbase, Kraken and Bitfinex, as well as certain other large U.S.-dollar denominated Digital Asset Trading Platforms that were not included in the Index as of December 31, 2024, including Binance.US (data included from April 1, 2020 through June 26, 2023), Bittrex (data included from August 21, 2018 through December 3, 2023), Crypto.com (data included from January 1, 2023) and OKCoin (data included from December 25, 2018 through March 1, 2021).
For example, based on data provided by the Index Provider, on any given day during the year ended December 31, 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 4.75% 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 1.74%.
Prior to February 23, 2024, NAV was referred to as Digital Asset Holdings and NAV per Share was referred to as Digital Asset Holdings per Share.
Constituent Trading Platform Selection The Digital Asset Trading Platforms that are included in the Index are selected by the Index Provider utilizing a methodology that is guided by the International Organization of Securities Commissions (“IOSCO”) principles for financial benchmarks.
For a trading platform to become a Constituent Trading Platform, it must satisfy the criteria listed below (the “Inclusion Criteria”): • No evidence in the past 12 months of trading restrictions on individuals or entities that would otherwise meet the trading platform’s eligibility requirements to trade; • No evidence in the past 12 months of undisclosed restrictions on deposits or withdrawals from user accounts; • Real-time price discovery; • Limited or no capital controls; • Transparent ownership including a publicly-known ownership entity; • Publicly available language and policies addressing legal and regulatory compliance, including KYC (Know Your Customer), AML (Anti-Money Laundering) and other policies designed to comply with relevant regulations that might apply to it; and • Offer programmatic spot trading of the trading pair, and reliably publish trade prices and volumes on a real-time basis through Rest and Websocket APIs.
All trading platforms that meet these Inclusion Criteria will be assigned to one trading platform Category as defined by the additional criteria below: • Category 1 o Licensed and/or able to serve investors, retail or professional, in the U.S.; and o Maintain sufficient USD or USDC liquidity relative to the size of the listed assets. • Category 2 o Licensed (including in-principal licensure) and/or able to serve investors, retail or professional, in one or more of the following jurisdictions: • United Kingdom • European Union • In the event a trading platform is only licensed or able to serve investors in select European Union countries and none of the other listed jurisdictions, the Index Provider reserves the right to evaluate its eligibility on a case-by-case basis. • Hong Kong • Singapore; and o Maintain sufficient USD or USDC liquidity relative to the size of the listed assets.
A Digital Asset Trading Platform is removed from the Constituent Trading Platforms when it no longer satisfies the Inclusion Criteria.

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Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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