As filed with the Securities and Exchange Commission on September 5, 2017

Registration No. 333-212533

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

AMENDMENT NO. 2

to

FORM S-1

REGISTRATION STATEMENT

UNDER THE SECURITIES ACT OF 1933

ETHERINDEX ETHER TRUST

(Exact name of Registrant as specified in its charter)

Delaware 6221 81-2951763 (State or other jurisdiction of

incorporation or organization) (Primary Standard Industrial

Classification Code Number) (I.R.S. Employer

Identification No.)

232 8th Avenue, Unit 4

New York, NY 10011

(212) 378-6714

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

The Corporation Trust Company

1209 Orange Street

Wilmington (New Castle County), DE 19801

+1 (302) 658-7581

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

Joseph Quintilian EtherIndex LLC 232 8th Avenue, Unit 4 New York, NY 10011 Brian S. North, Esq. Buchanan Ingersoll & Rooney PC 1290 Avenue of the Americas, 30th Floor New York, NY 10104-3001

Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. þ

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act of 1933, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act of 1933, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act of 1933, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer þ (Do not check if a smaller reporting company) Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Calculation of Registration Fee

Title of each class of securities to be registered Amount to be registered Proposed maximum offering

price per Share (1) Proposed maximum aggregate offering price (1) Amount of registration fee(2) EtherIndex Ether Shares [●] $ [●] $ 1,000,000 $ 100.70

(1) Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(d) under the Securities Act of 1933. (2) $100.70 was previously paid in the initial filing of the registration statement on Form S-1, filed on July 15, 2016.

The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and we are not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED SEPTEMBER [*], 2017

[ ],000 ETHERINDEX ETHER SHARES

ETHERINDEX ETHER TRUST

The EtherIndex Ether Trust (the “Trust”) will issue EtherIndex Ether Shares (the “Shares”), which represent units of fractional undivided beneficial interest in and ownership of the Trust. The Trust’s purpose is to provide shareholders with exposure to the daily change in the U.S. dollar price of ether, before expenses and liabilities of the Trust. Ether is a digital commodity (“Digital Asset”) based on the value token of the blockchain of the peer-to-peer Ethereum computer network (the “Ethereum Network”).

EtherIndex LLC is the sponsor of the Trust (the “Sponsor”), Delaware Trust Company is the trustee of the Trust (the “Trustee”), The Bank of New York Mellon is the administrator (the “Administrator”), trust agency service provider (the “Trust Agency Service Provider”), and custodian of cash of the Trust (the “Cash Custodian”). Coinbase is the custodian of the ether of the Trust (the “Ether Custodian”). The Trust intends to issue additional Shares on a continuous basis.

The Trust is not actively managed.

The Shares will be issued and redeemed by the Trust only in one or more whole blocks of 10,000 Shares (each block of 10,000 Shares is a “Basket”) principally in exchange for cash. The Trust will issue and redeem shares in Baskets to and from certain registered broker-dealers or other securities market participant (“Authorized Participants”) on an ongoing basis as described in the “Plan of Distribution” section of this Prospectus. On each Business Day, the value of each Basket accepted by the Administrator in a creation or redemption transaction will be the same (i.e., each Basket will consist of 10,000 Shares and the value of the Basket will be equal to the value of 10,000 Shares at their net asset value per Share on that day).

Prior to this offering, there has been no public market for the Shares. The Trust intends to apply to have the Shares listed for trading on NYSE Arca, Inc. (“NYSE Arca” or the “Exchange”) under the symbol “ETHX.”

THE SHARES ARE SPECULATIVE SECURITIES AND INVOLVE A HIGH DEGREE OF RISK. See “Risk Factors” starting on page 9. YOU SHOULD CONSIDER ALL RISK FACTORS BEFORE INVESTING IN THE TRUST.

Neither the Securities and Exchange Commission (the “SEC” or the “Commission”) nor any state securities commission has approved or disapproved of the securities offered in this Prospectus, or determined if this Prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The Shares are neither interests in nor obligations of the Sponsor or the Trustee or any of their affiliates. The Shares are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency. The Trust is not an investment company registered under the Investment Company Act of 1940, as amended. The Trust is not a commodity pool for purposes of the Commodity Exchange Act of 1936, as amended, and the Sponsor is not subject to regulation by the Commodity Futures Trading Commission as a commodity pool operator or a commodity trading adviser.

The Trust will issue and redeem Shares from time to time, as described in “Creation and Redemption of Shares.” The Shares issued will be purchased by Authorized Participants and then be distributed to the public by Authorized Participants through sale on NYSE Arca. It is expected that the Shares will be sold to the public at varying prices to be determined by reference to, among other considerations, the price of ether represented by each Share and the trading price of the Shares on NYSE Arca at the time of each sale.

On [●], an initial purchaser, subject to certain conditions, deposited cash for the purchase of [●] initial Basket(s) totaling [●] Shares (the “Seed Baskets’). Delivery of the Seed Baskets will be made on or about the date of this Prospectus, upon the effectiveness of this registration statement. It is expected that the Initial Purchaser will distribute these Shares to the public through sale on [●]. The Trust will receive all proceeds from the offering of the Seed Baskets in cash in an amount equal to the full price for the Seed Baskets. Each Share in the Seed Baskets represents one ether, and each Seed Basket consists of 10,000 Shares worth 10,000 ether.

Neither the Initial Purchaser nor the Authorized Participants will receive a selling commission from the Trust in consideration of their distribution of the Shares to the public through sale on NYSE Arca. Purchasers of the Shares may be subject to customary brokerage charges. Investors should review the terms of their brokerage accounts for details on applicable charges.

Per

Share (1) Per Basket Public offering price for the Seed Baskets $ [ ] $ [ ]

(1) The initial Baskets were created at a per Share price equal to the value of ether in U.S. dollars as reported by the Global Digital Asset Exchange as of 4:00 p.m., Eastern time, on the date of formation of the Trust.

The date of this Prospectus is [ ], 2017.

TABLE OF CONTENTS

This Prospectus contains information investors should consider when making an investment decision about the Shares. Investors may rely on the information contained in this Prospectus. The Trust and the Sponsor have not authorized any person to provide you with different information and, if anyone provides an investor with different or inconsistent information, that investor should not rely on it. This Prospectus is not an offer to sell the Shares in any jurisdiction where the offer or sale of the Shares is not permitted.

The Shares are not registered for public sale in any jurisdiction other than the United States.

i

STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Prospectus contains “forward-looking statements” with respect to future events or future performance. In some cases statements preceded by, followed by or that include words such as “may,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential” or similar expressions are intended to identify some of the forward-looking statements. All statements (other than statements of historical fact) included in this Prospectus that address activities, events or developments that will or may occur in the future, including such matters as changes in market prices and conditions (for Digital Assets, ether and the Shares), the Trust’s operations, the Sponsor’s plans and references to the Trust’s future success and other similar matters are forward-looking statements. These statements are only predictions. Actual events or results may differ materially. These statements are based upon certain assumptions and analyses the Sponsor made based on its perception of historical trends, current conditions and expected future developments, as well as other factors appropriate in the circumstances. Whether or not actual results and developments will conform to the Sponsor’s expectations and predictions, however, is subject to a number of risks and uncertainties, including the special considerations discussed in this Prospectus, general economic, market and business conditions, changes in laws or regulations, including those concerning taxes, made by governmental authorities or regulatory bodies, and other world economic and political developments. See “Risk Factors.”

Consequently, all the forward-looking statements made in this Prospectus are qualified by these cautionary statements, and there can be no assurance that the actual results or developments the Sponsor anticipates will be realized or, even if substantially realized, that they will result in the expected consequences to, or have the expected effects on, the Trust’s operations or the value of the Shares. Should one or more of these risks discussed in “Risk Factors” or other uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those described in forward-looking statements. Neither the Trust nor the Sponsor or any other person assumes responsibility for the accuracy or completeness of the forward-looking statements. Forward-looking statements are made based on the Sponsor’s beliefs, estimates and opinions on the date the statements are made and neither the Trust nor the Sponsor is under a duty or undertakes an obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change, other than as required by applicable laws. Investors are therefore cautioned against placing undue reliance on forward-looking statements.

ii

PROSPECTUS SUMMARY The following is only a summary of the Prospectus and, while it contains material information about the Trust and the Shares, it does not contain or summarize all of the information about the Trust and the Shares contained in this Prospectus which is material and/or which may be important to you. You should read this entire Prospectus, including “Risk Factors” beginning on page 9, before making an investment decision about the Shares. Ether Ether is a digital asset (“Digital Asset”) similar to bitcoin that is not issued by any government, bank or central organization. Ether is generated on the peer-to-peer Ethereum computer network (the “Ethereum Network”) that hosts a decentralized public transaction ledger, commonly referred to as a “blockchain.” Miners of the Ethereum Network receive ether for using their computer power to validate transactions on the Ethereum Network. It is used to pay for specific actions on the Ethereum Network. Unlike bitcoin, ether was not designed to function as a store of value. Ether’s value arises from its usefulness within the Ethereum Network. A trading market has developed for ether on many of the same exchanges and the same infrastructure that has developed around bitcoin. Users who have historically purchased bitcoin and other digital currencies on exchange platforms can now buy ether on these websites. Ether can be converted to fiat currencies, such as the U.S. Dollar, or to bitcoin or other Digital Assets, at rates determined on Ether Exchanges or in individual end-user-to-end-user transactions under a barter system. The Ethereum Network software governs the creation of ether and secures and verifies ether transactions. The Ethereum Network software can interpret the blockchain to determine the exact ether balance, if any, of any public ether address listed in the blockchain which has taken part in a transaction on the Ethereum Network. An ether private key controls the transfer or “spending” of ether from its associated public ether address. An ether “wallet” is a collection of private keys and their associated public ether addresses. The Ethereum Network is a recent technological innovation, and the ether that is created, transferred, used and stored by entities and individuals have certain features associated with several types of assets, most notably commodities and currencies. Both the Ethereum Network and the bitcoin computer network (the “Bitcoin Network”) run on a blockchain, which is a distributed database run by nodes or “miners” who are rewarded with the respective value token (i.e., ether or bitcoin) for securing the network. While the Bitcoin Network permits users primarily to execute value transfers, the Ethereum Network allows users to program any arbitrary code and execute it, including value transfers. Accordingly, the Ethereum Network may be viewed as a global, decentralized computer in comparison to the Bitcoin Network, which is more similar to a global, decentralized payment network. The Ethereum Network enables “smart contracts”—code running on a blockchain that is more complex than a simple value transfer or supplemental feature of value transfers. Although ether may be used to perform value transfers or serve as a store of value, ether’s primary function is as a “fuel” for the Ethereum Network. Each programmatic operation that can be performed on the network costs “gas” to execute, and “gas” is payable only in ether. The Sponsor believes the Trust to be the first exchange-traded product in the United States that seeks to track the price of ether.

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The Trust The Trust is a Delaware statutory trust, organized on November 4, 2016, under the Delaware Statutory Trust Act (“DSTA”) and operates pursuant to the Declaration of Trust and Trust Agreement dated [●] between the Sponsor (as grantor) and the Trustee (the “Trust Agreement”), which sets forth the respective rights and duties of the Sponsor and the Trustee and authorizes the Sponsor, on behalf of the Trust, to enter into a custody agreement for the Trust’s cash (the “Cash Custody Agreement”) with the Cash Custodian and a custody agreement for the Trust’s ether (the “Ether Custody Agreement” and collectively with the Cash Custody Agreement, the “Custody Agreements”) with the Ether Custodian (collectively, with the Cash Custodian, the “Custodians”). The Custodians serve as custodians to the Trust under the Custody Agreements, which establish the segregated custody accounts of the Trust that will be used to control the ether (the “Trust Ether Custody Account”) and to control the cash of the Trust on behalf of the Trust (the “Trust Cash Custody Account” and collectively with the Trust Ether Custody Account, the “Trust Custody Accounts”). The Trust will issue common units of beneficial interest, or “Shares,” which represent units of fractional undivided beneficial interest in the net assets of the Trust. The Trust’s assets will consist of ether. The Trust will occasionally hold cash for short periods in connection with the Basket creation and redemption process. All of the proceeds raised by the Trust from the issuance of and sale of creation Baskets will be used to purchase ether and to pay the Administrator’s fee for its services in connection with those creation Baskets. The Trust is not a registered investment company under the Investment Company Act of 1940, as amended, and is not required to register as an investment company. The Shares provide investors with an opportunity to access the ether market through a traditional brokerage account. Shares are issued only in one or more blocks of 10,000 Shares called “Baskets” principally in exchange for cash from certain registered broker-dealers or other securities market participants (“Authorized Participants”). The Trust will issue and redeem the Shares in Baskets only to certain Authorized Participants on an ongoing basis as described in the “Plan of Distribution” section of this Prospectus. Baskets will be redeemed by the Trust principally in exchange for the amount of cash corresponding to their redemption value. Baskets may also be created or redeemed partially or wholly in exchange for ether at the discretion of the Sponsor if the Authorized Participant can convey or receive ether directly to the Trust. On each Business Day, the value of each Basket accepted by the Administrator in a creation or redemption transaction will be the same (i.e., each Basket will consist of 10,000 Shares and the value of the Basket will be equal to the value of 10,000 Shares at their net asset value per Share on that day). The investment objective of the Trust is for the Shares to track the price of ether, as measured by the price of ether in U.S. dollars as reported by the Global Digital Asset Exchange (“GDAX”) as of 4:00 p.m. Eastern time on each day NYSE Arca is open for trading (each a “Business Day”), less the Trust’s liabilities (which include accrued but unpaid fees and expenses). GDAX is an online exchange designed for professional traders to buy and sell bitcoin, ether, and other Digital Assets. It was established, and is maintained, by Coinbase, which also acts as the Trust’s Ether Custodian. The material terms of the Trust Agreement are discussed in greater detail under the section “Description of the Trust Agreement.” Individual Shares will not be redeemed by the Trust, but the Trust intends to apply for the listing of the Shares on NYSE Arca under the symbol “ETHX.” Investors may purchase Shares through traditional brokerage accounts. Secondary market purchases and sales of Shares are subject to customary brokerage commissions and charges. Investors should review the terms of their brokerage accounts for applicable charges. The market price of the Shares may not be identical to the net asset value of the Shares.

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The Sponsor The Trust’s Sponsor is EtherIndex LLC, a Delaware limited liability company formed on June 15, 2016. The Shares are not an interest in, or obligations of, the Sponsor and are not guaranteed by the Sponsor, its members, or any of its affiliates. The Sponsor will (1) select the Trustee, Administrator, and Custodians; (2) will negotiate various agreements and fees for the Trust; (3) will develop a marketing plan for the Trust on an ongoing basis and prepare marketing materials regarding the Shares; (4) maintain the Trust’s website; (5) will buy and sell ether with a view to causing the performance of the Trust to track that of the price of ether reported by GDAX, over time, before expenses and liabilities of the Trust, and (6) will perform such other services as the Sponsor believes the Trust will require. The Sponsor arranged for the creation of the Trust, the registration of the Shares for their public offering in the United States and intends to apply for their listing on NYSE Arca. While the Sponsor generally oversees the performance of the Administrator and the Trust’s principal service providers, it does not exercise day-to-day oversight of them. The Sponsor maintains a public website on behalf of the Trust, containing information about the Trust and the Shares. The Internet address of the Trusts’ website is [●]. This Internet address is only provided here as a convenience to you and the information contained in, or connected to, the Trust’s website is not considered part of this Prospectus. The Sponsor has agreed to assume the following administrative and marketing expenses incurred by the Trust: each of the Trustee’s and the Administrator’s monthly fee and out-of-pocket expenses; ether storage fees; the Trust Agency Service Provider’s fee; the Custodians’ fees; the marketing support fees and expenses; expenses reimbursable under the Administration Agreement; expenses reimbursable under the Trust Agency Service Agreement; expenses reimbursable under the Custody Agreements; exchange listing fees; SEC registration fees; printing and mailing costs; maintenance expenses for the Trust’s website; audit fees; and up to $100,000 per annum in legal expenses. The Sponsor also paid the costs of the Trust’s organization and the initial sale of the Shares, including applicable SEC registration fees. The Trust will be responsible for reimbursing the Sponsor or its affiliates for paying all the extraordinary fees and expenses, if any, of the Trust. Extraordinary fees and expenses are fees and expenses which are non-recurring and unusual in nature, such as legal claims and liabilities, litigation costs or indemnification or other unanticipated expenses. Such extraordinary fees and expenses, by their nature, are unpredictable in terms of timing and amount. The Trustee Delaware Trust Company, a Delaware trust company, acts as the trustee of the Trust. 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 Delaware Trustee is required to execute under the DSTA. To the extent that, at law or in equity, the Trustee has duties (including fiduciary duties) and liabilities relating thereto to the Trust or the owners of beneficial interests in the Shares, 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, Administrator, Trust Agency Service Provider, Custodians, or any other person. The Administrator The Bank of New York Mellon, the Administrator of the Trust, is generally responsible for the day-to-day administration of the Trust. This includes (i) assisting the Sponsor in receiving and processing orders from Authorized Participants to create and redeem Baskets and coordinating the processing of such orders with the Trust Agency Service Provider and The Depository Trust Company (“DTC”), (ii) calculating the net asset value per Share (“NAV”), (iii) instructing the Ether Custodian to transfer the Trust’s ether as needed to pay the remuneration due to the Sponsor (the “Sponsor’s Fee”) and any extraordinary Trust expenses that are not assumed by the Sponsor and (v) selling or directing the sale of the Trust’s remaining ether in the event of termination of the Trust and distributing the cash proceeds to the Shareholders of record. The Trust’s Trust Agency Service Provider is (or is an affiliate of) the Administrator and is authorized by the Sponsor under the Trust Agreement to serve as the transfer agent in accordance with the provisions of the Trust Agency Service Provider Agreement. The Trust Agency Service Provider, among other things, provides transfer agent services with respect to the creation and redemption of Baskets by Authorized Participants.

3

The Custodians The Cash Custodian, The Bank of New York Mellon, is the custodian of the Trust’s cash. The Ether Custodian, Coinbase, is the custodian of the Trust’s ether. Although the Trust’s ether is not stored or deposited with the Ether Custodian in a physical sense, all transactions involving the Trust’s ether are recorded on the Ethereum Network’s blockchain and associated with a public ether address. The Trust’s public ether addresses are established by the Ether Custodian, which controls the Trust’s ether and permits the Trust to move its ether. Access and control of those ether addresses, and the ether associated with them, is restricted through the public-private key pair relating to each ether address. The Ether Custodian is responsible for the safekeeping of the Trust’s private keys used to access and transfer the Trust’s ether. The Ether Custodian also facilitates the transfer of ether in accordance with the Administrator’s instructions pursuant to the terms of the Trust Servicing Agreement. The Ether Custodian will store all of the Trust’s ether on a segregated basis in its unique ether addresses with balances that can be directly verified on the blockchain. It will provide the Trust’s public ether addresses to the Administrator. The Trust’s ether is valued using the price of ether in U.S dollars as reported by GDAX as of 4:00 p.m. Eastern time each Business Day (the “GDAX Price”). The general role, responsibilities and regulation of the Trustee, Sponsor, Administrator, Trust Agency Service Provider and Custodians are further described in “Sponsor,” “Trustee,” “Administrator,” “Trust Agency Service Provider” and “Custodians,” respectively. Detailed descriptions of certain specific rights and duties of the Trustee, Sponsor, Administrator, Trust Agency Service Provider and Custodians are set forth in “Description of the Trust Documents-Description of the Trust Agreement,” “Description of the Trust Documents-Description of the Trust Servicing Agreement,” “Description of the Trust Documents-Description of the Trust Agency Service Provider Agreement,” and “Description of the Trust Documents–Description of the Custody Agreements,” respectively. The Trust Agreement, Trust Servicing Agreement, Trust Agency Service Provider Agreement and Custody Agreements are collectively referred to herein as the “Trust Documents.” The Shares are speculative and investing in them involves a high degree of risk. See “Risk Factors.”

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Emerging Growth Company Status The Trust is an “emerging growth company” as defined in the Jumpstart Our Business Startups Act (“JOBS Act”). For as long as the Trust is an emerging growth company, unlike other public companies, it will not be required to: ● provide an auditor’s attestation report on management’s assessment of the effectiveness of our system of internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002; ● comply with any new requirements adopted by the Public Company Accounting Oversight Board, or the PCAOB, requiring mandatory audit firm rotation or a supplement to the auditor’s report in which the auditor would be required to provide additional information about the audit and the financial statements of the issuer; ● comply with any new audit rules adopted by the PCAOB after April 5, 2012, unless the SEC determines otherwise; ● provide certain disclosure regarding executive compensation required of larger public companies; or ● obtain shareholder approval of any golden parachute payments not previously approved. The Trust will cease to be an “emerging growth company” upon the earliest of (i) when it has $1.0 billion or more in annual revenues, (ii) when it is deemed to be a large accelerated filer under Rule 12b-2 promulgated pursuant to the Securities Exchange Act of 1934, as amended, (iii) when it issues more than $1.0 billion of non-convertible debt over a three-year period, or (iv) the last day of the fiscal year following the fifth anniversary of its initial public offering. In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended (“Securities Act”) for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies; however, the Trust is choosing to “opt out” of such extended transition period, and as a result, the Trust will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. Section 107 of the JOBS Act provides that the Trust’s decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable. Principal Offices The Trustee’s principal office is located at 2711 Centerville Road, Wilmington, Delaware 19808 . The Sponsor’s address is 232 8th Avenue, Unit 4, New York, NY 10011, and the Sponsor’s telephone number is (212) 378-6714. The Ether Custodian’s address is 548 Market Street, Suite 23008, San Francisco, California 94104, and the Ether Custodian’s telephone number is [●]. The principal office of the Administrator, Trust Agency Service Provider, and Cash Custodian is located at 2 Hanson Place, Brooklyn, New York 11217.

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THE OFFERING Offering The Shares represent units of fractional undivided beneficial interest in the net assets of the Trust. Use of Proceeds Proceeds received by the Trust from the issuance and sale of Baskets, including the initial [●] Baskets issued in connection with the formation of the Trust (the “Seed Baskets”), will consist of cash and, in some instances, may consist partially or wholly of ether. Cash proceeds will be transferred to the Sponsor to purchase ether for the Trust. The Trust will hold the ether purchased by the Sponsor on the Trust’s behalf, and the ether received by the Trust from the issuance and sale of Baskets, until ether (1) is sold for cash, which is distributed to Authorized Participants in connection with the redemption of Baskets; (2) is sold for cash to pay the Sponsor’s fee or the Trust’s expenses not assumed by the Sponsor; or (3) is sold in connection with the termination and liquidation of the Trust or as otherwise required by law or regulation. Listing Exchange The Sponsor intends to apply to have the Shares listed for trading on NYSE Arca. Exchange Symbol ETHX CUSIP Ether and the Ethereum Network [CUSIP] Ether is a Digital Asset that is issued by, and transmitted through, the decentralized, open source protocol of the peer-to-peer Ethereum Network. The Ethereum Network hosts the decentralized public transaction ledger, or a “blockchain”, on which all ether is recorded. No single entity owns or operates the Ethereum Network. The infrastructure of the Ethereum Network is collectively maintained by a decentralized user base. The Ethereum Network is a decentralized network of computers that run applications on a blockchain that enables developers to create markets, store registries of debts or promises, represent the ownership of property, and move funds in accordance with instructions given in the past, all without the involvement of a middle man or counterparty. The Ethereum Network allows users to write and put on the network smart contracts—that is, general-purpose code that executes on every computer in the network and to create virtual currencies. Operations are executed automatically on the blockchain and cost ether. The Ethereum Network is one of a number of projects intended to expand blockchain use beyond the Bitcoin Network’s peer-to-peer money system. Unlike bitcoin, ether was not designed to function as a store of value. Instead, it was meant to pay for specific actions on the Ethereum Network, with miners receiving it for using their computing power to validate transactions. Ether is currently supported by many of the same exchanges and the same infrastructure that has developed around bitcoin. Users who have historically purchased bitcoin and other Digital Assets on exchange platforms can now buy ether on these websites. Ether can be converted to fiat currencies, such as the U.S. Dollar, or to bitcoin or other Digital Assets, at rates determined on Ether Exchanges or in individual end-user-to-end-user transactions under a barter system. Ether is “stored” or reflected on the blockchain, which is a digital file stored on the computers of each Ethereum Network user. The Ethereum Network software governs the creation of ether and secures and verifies ether transactions. The blockchain contains a record of every ether, every ether transaction (including the creation or “mining” of new ether) and every Ethereum Network public address associated with a quantity of ether. The Ethereum Network utilizes the blockchain to evidence the existence of ether in any Ethereum Network public address. A private key controls the transfer or “spending” of ether from its associated public address. A digital wallet is a collection of private keys and their associated public addresses. The blockchain is comprised of a digital file, downloaded and stored, in whole or in part, on all Ethereum Network users’ software programs. The file includes all blocks that have been solved by miners and is updated to include new blocks as they are solved. As each newly solved block refers back to and “connects” with the immediately prior solved block, the addition of a new block adds to the blockchain in a manner similar to a new link being added to a chain. Each new block records outstanding ether transactions, and outstanding transactions are settled and validated through such recording. The blockchain represents a complete, transparent and unbroken history of all transactions of the Ethereum Network. Each ether transaction is broadcast to the Ethereum Network and recorded in the blockchain.

6

Creation and Redemption of Shares The Trust will issue and redeem Shares in one or more Baskets only to or from certain Authorized Participants on an ongoing basis as described in the “Plan of Distribution” section of this Prospectus. The Trust receives cash deposited with the Cash Custodian only by Authorized Participants in exchange for the creation of Baskets, each equal to 10,000 Shares. Conversely, the Trust delivers cash in exchange for Baskets surrendered to it for redemption by Authorized Participants. If so requested by an Authorized Participant, the Trust may, at the discretion of the Sponsor, issue Baskets for ether or deliver ether upon the redemption of Baskets. The Trust issues and redeems Baskets on a continuous basis only to and from Authorized Participants. Baskets are only issued or redeemed in exchange for the amount of cash (and, potentially, in-kind for ether) determined by the Administrator on each day that NYSE Arca is open for regular trading based on the combined net asset value of the Shares included in the Baskets being created or redeemed. No Shares are issued unless the Custodians confirm that the Trust has been allocated the corresponding amount of cash or, at its discretion, ether. On each Business Day, the value of each Basket accepted by the Administrator in a creation or redemption transaction will be the same (i.e., each Basket will consist of 10,000 Shares and the value of the Basket will be equal to the value of 10,000 Shares at their net asset value per Share on that day). The Trust will not issue or redeem fractions of a Basket. Baskets may be created or redeemed only by Authorized Participants, which will be required to pay a transaction fee (“Transaction Fee”) to the Trust Agency Service Provider for each order to create or redeem Baskets. Authorized Participants may sell to other investors all or part of the Shares included in the Baskets they purchase from the Trust. The Initial Purchaser will not be subject to a Transaction Fee for the purchase of the Seed Baskets. See “Creation and Redemption of Shares” for more details. NAV The net asset value per Share (“NAV”) of the Trust is the asset value of the Trust less its liabilities (which include accrued but unpaid fees and expenses) divided by the number of outstanding Shares as of 4:00 p.m. Eastern time each day NYSE Arca is open for regular trading (each a “Business Day”). The Administrator will calculate the NAV using the price of ether in U.S. dollars as reported by GDAX as of 4:00 p.m. Eastern time each Business Day. The Sponsor will publish the Trust’s NAV on the Trust’s website as soon as practicable after their calculation by the Administrator. GDAX is an online exchange designed for professional traders to buy and sell bitcoin, ether, and other Digital Assets. It was established, and is maintained, by Coinbase, which also acts as the Trust’s ether custodian. GDAX holds a virtual currency and a money transmitter license from the New York Department of Financial Services. If the price of ether on GDAX is unavailable or the Sponsor determines that price is not an appropriate basis for valuing the Trust’s ether, the Sponsor will instruct the Administrator to use an alternative basis for calculating the Trust’s NAV See “Valuation of Ether and Definition of NAV” Trust Expenses The Trust’s only ordinary recurring charge is expected to be the remuneration due to the Sponsor (“Sponsor’s Fee”). In exchange for the Sponsor’s Fee, the Sponsor has agreed to assume the ordinary administrative and marketing expenses that the Trust is expected to incur. The Sponsor will also pay the costs of the Trust’s organization and the initial sale of the Shares, including the applicable SEC registration fees. The Sponsor’s Fee is [●] percent per annum of the daily net asset value of the Trust and will accrue daily and will be payable on a monthly basis in arrears. The Trust will sell ether to raise cash to pay the Sponsor’s Fee and other expenses not assumed by the Sponsor. At the Sponsor’s discretion, the Trust may pay the Sponsor’s Fee in ether. As soon as practicable after the completion of any calendar month, the Administrator will calculate, using the GDAX price on such calculation day, the outstanding Sponsor’s Fee and either sell ether to pay the Sponsor’s Fee or transfer ether equal in value to the amount of the Sponsor’s Fee from the Trust Ether Custody Account to an account maintained by the Cash Custodian for the Sponsor (“Sponsor Custody Account”). The Sponsor, from time to time, may waive all or a portion of the Sponsor’s Fee at its discretion for stated periods of time. The Sponsor is under no obligation to continue a waiver after the end of such stated period, and, if such waiver is not continued, the Sponsor’s Fee will thereafter be paid in full. The Administrator will from time to time instruct the Custodians to deliver to the Sponsor Custody Account cash or ether in such quantity as may be necessary to permit payment of the Sponsor’s Fee.

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The Sponsor is not required to assume extraordinary, nonrecurring expenses, therefore the Trust may incur certain extraordinary, nonrecurring expenses (e.g., expenses relating to litigation) that are not contractually assumed by the Sponsor. In such circumstances, the Administrator may from time to time, cause the Ether Custodian to transfer from the Trust Ether Custody Account and deliver to a segregated account of the Trust (“Trust Expense Account”) ether for sale or other conversion to U.S. Dollars or other fiat currencies in such quantity as may be necessary to permit payment of Trust expenses not assumed by the Sponsor. Under such circumstances, the sale or conversion to fiat currency of ether will occur after such ether has been delivered from the Trust to the Trust Expense Account. In order to ensure the processing of transfers of ether into and out of the Trust Ether Custody Account, or among public ether addresses in the Trust Ether Custody Account or the Trust Expense Account, the Trust shall pay a transaction fee to Ethereum Network miners as prudent. See “Overview of the Ether Industry and Market—Creation of New Ether.” To the extent that such transaction fee payments are made, the Custodians shall pay for or reimburse the Trust for such transaction fees by the transfer of additional ether or cash in the amount of such fees during the creation and redemption process. It is anticipated that the reimbursement of transaction fees paid to miners shall be more than accounted for by the payment of creation and redemption Transaction Fees by Authorized Participants. The Trust Agency Service Provider will reimburse the Custodians’ payment of miner fees from and up to the amount of such creation and redemption Transaction Fees on a monthly basis. The number of ether to be transferred and sold will vary from time to time depending on the level of the Trust’s expenses and the relevant price (for the payment of the Sponsor’s Fee) or the proceeds of the sales of ether to pay other expenses (for the payment of Trust expenses other than the Sponsor’s Fee, e.g., extraordinary expenses). See “Business of the Trust—Trust Expenses.” Each delivery, transfer or sale of ether by the Trust to pay the Sponsor’s Fee or other expenses will be a taxable event for Shareholders. See “United States Federal Income Tax Consequences—Taxation of U.S. Holders.” Termination Events The Trust will dissolve and liquidate if certain events occur. See “Description of the Trust Agreement—Termination of the Trust.” Authorized Participants Baskets may be created or redeemed only by Authorized Participants. Each Authorized Participant must (i) be a registered broker-dealer or other securities market participant such as a bank or other financial institution which is not required to register as a broker-dealer to engage in securities transactions, (ii) be a direct participant in DTC, and (iii) have entered into an agreement with the Sponsor (an “Authorized Participant Agreement”). Authorized Participant Agreements provide the procedures for the creation and redemption of Baskets and for the delivery of ether required for certain creations or redemptions. A list of the current Authorized Participants can be obtained from the Administrator or the Sponsor. See “Creation and Redemption of Shares” for more details. Clearance and Settlement The Shares will be evidenced by one or more global certificates that the Trust Agency Service Provider will issue to DTC. The Shares will be available only in book-entry form. Shareholders may hold their Shares through DTC, if they are direct participants in DTC (“DTC Participants”), or indirectly through broker-dealers, banks or other entities that are DTC Participants. Summary Financial Condition As of the close of business on [●], 2017, the net asset value of the Trust, which represents the value of the ether and cash deposited into and held by the Trust in exchange for the Seed Baskets, less liabilities of the Trust (which include accrued but unpaid fees and expenses), was $[●] and the NAV per Share was $[●]. See “Statement of Financial Condition” elsewhere in this Prospectus.

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RISK FACTORS

You should consider carefully the risks described below before making an investment decision. You should also refer to the other information included in this Prospectus.

Overview of the Ether Industry and Market

Ether is created, transferred and stored on the Ethereum Network, a network of computers all running the ethereum blockchain. A beta version of its live blockchain was publicly launched in July 2015, and the production version was launched in March 2016.

Unlike bitcoin, ether was not designed to serve as a store of value. Instead, it was meant to pay for specific transactions on the Ethereum Network, with miners receiving ether for using their computing power to validate transactions.

Ether is issued by, and transmitted through, the decentralized, open source protocol of the peer-to-peer Ethereum Network. The Ethereum Network is a network of computers all running the ethereum blockchain. The blockchain allows people to exchange tokens of value, called ether. The Ethereum Network also allows people to write and put on the network smart contracts – general-purpose code that executes on every computer in the network (currently over 6,000 computers). Transactions on the Ethereum Network are executed automatically on the blockchain and cost ether for the use of the network’s processing. The Ethereum Network is one of a number of projects intended to expand blockchain use beyond bitcoin’s peer-to-peer money system.

The Ethereum Network hosts the decentralized public transaction ledger, known as the blockchain, on which all ether is recorded. No single entity owns or operates the Ethereum Network, the infrastructure of which is collectively maintained by a decentralized user base. Ether can be converted to fiat currencies, such as the U.S. Dollar, or bitcoin at rates determined on Digitial Asset exchanges or in individual end-user-to-end-user transactions under a barter system. See “Uses of Ether–Ether Exchange Market,” below.

Ether is “stored” or reflected on the digital transaction ledger known as the “blockchain,” which is a digital file stored in a decentralized manner on the computers of each Ethereum Network user. The Ethereum Network software governs the creation of ether and secures and verifies ether transactions. The blockchain records every ether, ether balances, and every address associated with a quantity of ether. The Ethereum Network and its software programs determine the exact ether balance, if any, of any public ether address listed in the Blockchain as having taken part in a transaction on the Ethereum Network. The Ethereum Network utilizes the blockchain to evidence the existence of ether in any public ether address. A private key controls the transfer or “spending” of ether from its associated public ether address. An ether wallet is a collection of private keys and their associated public ether addresses.

Because of the recent deployment of the Ethereum Network and ether and uncertainty about potential regulation of ether, the Trust will be subject to a number of risk factors set forth below.

Risk Factors Related to the Ethereum Network and Ether

The Ethereum Network has only recently been deployed.

The Ethereum Network and the Ethereum Network software are in their early stages. The production version of the Blockchain on the Ethereum Network was launched in March 2016. As a result, the Ethereum Network has undergone less testing than the older, more established Bitcoin Network.

Because of its infancy as a Digital Asset, ether has experienced sharp fluctuations in value. Since its initial trading, ether has experienced one-day and one-month changes of 96.3% and 218%, respectively, on an intra-period basis. If such volatility continues, it may have an adverse effect on the willingness of parties, other than speculators or those that need ether to use the Ethereum Network, to receive ether in a transaction.

The Ethereum Network is also in a state of evolution. Ether is currently awarded to miners on the Ethereum Network based upon a “proof of work” consensus algorithm, in which consensus is measured by how much computing power agrees with a transaction and the current state of the blockchain.

In general terms, a “proof of work” is generated through miners attempting to solve exceptionally difficult math problems. A proof of work is a piece of data which is difficult (costly, time-consuming) to produce but easy for others to verify and which satisfies certain requirements. Producing a proof-of-work can be a random process with low probability so that a lot of trial and error is required on average before a valid proof of work is generated Finding a solution is difficult, costly and time-consuming, but verifying a solution is easy. In order to generate a proof of work, miners must utilize computers and electricity, requiring a large amount of power, to calculate different potential solutions to solve a problem.

The “proof of work” mechanism utilized by the Ethereum Network is similar to, but different from, the “proof of work” mechanism utilized by the Bitcoin Network. Although both the Ethereum Network and Bitcoin Network use graphics processing units to compute random algorithms in efforts to mine a block of the blockchain, the Ethereum Network also requires random access memory in its hash function.

The Ethereum Network is expected to migrate to a “proof of stake” consensus algorithm, in which consensus would be measured by how much ether agrees with the current state of the blockchain. In general terms, a “proof of stake” occurs when a validator “puts up a stake”—i.e., locks up an amount of its ether—to verify a block of transactions. Under proof of stake, the cryptographic calculations are much simpler for computers to solve as a miner only needs to prove its ownership of cryptographic tokens. Whereas under the proof of work consensus algorithm, the barrier to entry is computing power, under the proof of stake consensus algorithm, the barrier to entry is financial (the cost of accumulating ether).

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In order to migrate to the proof of stake consensus algorithm, the Ethereum Network intends to plan a hard fork in the near future to switch its protocols. Switching from proof of work to proof of stake is intended to reduce the high energy requirements and costs associated with the proof of work consensus algorithm. Further, switching to proof of stake is intended to create safer networks as smaller networks are more vulnerable to 51% attacks, which occur when a person gains control over greater than 50% of the computing power in a proof of work model, but would require gaining control over greater than 50% of the staked ether in a proof of stake model. Additionally, a proof of stake consensus algorithm is expected to make the Ethereum Network more scalable to accommodate larger applications.

Vitalik Buterin, a founder and leading proponent of the Ethereum Network has been quoted as acknowledging that there is always a chance that the Ethereum project will fail.

A Temporary or Permanent Blockchain “Fork” Could Adversely Affect an Investment in the Shares.

The DAO, a decentralized autonomous organization using the Ethereum Network, was hacked in June 2016, resulting in a loss to that organization of approximately 3.6 million of ether. In response to this loss, the Ethereum community agreed to create a new “hard fork” on the Ethereum Network blockchain which returned the lost ether to The DAO. A hard fork is a change to the underlying Ethereum protocol, which creates new rules for the Ethereum system; all Ethereum clients need to upgrade, or they will be stuck on an incompatible chain.

In creating the hard fork, the intent was to have all users of the Ethereum Network migrate to that new fork, which would result in the ether in the old blockchain held by the DAO hacker being rendered useless. However, a number of users have continued to develop the old blockchain, now referred to as “Ethereum Classic” resulting in separate version of ether now referred to as ether classic (“ETC”). Ether classic is now traded on several Digital Asset exchanges.

At the time of the initial attack on The DAO and the loss of its ether, the market price of ether declined from over $20 to under $13. While the price of ether recovered after that decline, there is no assurance that a future attack would not result in a sustained decline in the market price of ether.

If a contentious hard fork were to occur again in the future, resulting in two forks in the blockchain in the Ethereum Network, each of the Trust and GDAX would need to make separate determinations as to which of the two separate blockchains to continue to utilize for ether transactions and for valuation purposes.

Although a contentious hard fork could have a material adverse effect on the price of ether and the value of the Trust, a contentious hard fork would not affect the amount of ether held by the Trust.

A disruption of the Internet or the Ethereum Network would affect the ability to transfer ether and the value of ether.

The Ethereum Network’s functionality depends on the Internet. A significant disruption in Internet connectivity could disrupt the Ethereum Network’s operations until the disruption is resolved and have an adverse effect on the price of the Shares. In addition, the Ethereum Network has been subjected to a number of denial of service attacks, which led to temporary delays in block creation and in the transfer of ether. While in response to those attacks, an additional “hard fork” was created to increase the cost of certain network functions, the Ethereum Network could be the subject of additional attacks. Any future attacks that impact the ability to transfer ether could have a material adverse effect on the price of ether and the value of an investment in the Shares.

The loss or destruction of a private key required to transfer the Trust’s ether holdings may be irreversible and would adversely affect an investment in the Shares.

Ether can only be transferred with the private key associated with the Ethereum Network public address in which the ether is held. The Trust safeguards and securely stores the private keys associated with the Trust’s Ethereum Network public addresses by engaging the Ether Custodian. To the extent a private key is lost, destroyed, exfiltrated or otherwise compromised and no backup of the private key is accessible, the Ether Custodian will be unable to transfer the Trust’s ether held in the public addresses associated with that private key. Consequently, the ether associated with that public address will effectively be lost, which would adversely affect an investment in the Shares.

The limit on the supply of Ether is uncertain.

Unlike bitcoin, which has a fixed limit of 21,000,000 bitcoin, no limit has been established on the total supply of ether. The initial creation of ether was in connection with a crowd funding transaction in 2014 in which 60,000,000 ether were pre sold. Another 12,000,000 ether were created to the development fund, most of it going to early contributors and developers and the remaining amount to the Ethereum Foundation. All additional ether have been and will be created through the mining process. It has been reported that approximately 9,700,000 million ether have been created to date through the mining process. According to the terms of the 2014 presale, the issuance of ether from mining is capped at 18,000,000 ether per year. However, it is expected that the Ethereum Network will switch from a “proof of work” consensus to a new “proof of stake” consensus algorithm under development, called Casper, that is expected to be more efficient and require less mining subsidy. While the Ethereum Foundation has stated that it is expected that the current maximum is considered a ceiling and the new issuance under Casper will not exceed it (and is expected to be much less), there is no assurance that will be the case.

The creation and exchange of ether are not the sole purposes of the Ethereum Network.

The Ethereum Network is an alternative decentralized ledger protocol with an ideological lineage that contains as much BitTorrent, Java and Freenet as it does ether. It is a general-purpose, global blockchain that can govern both financial and non-financial types of application states. In its essence, the Ethereum Network enables decentralized business logic, also known as “smart contracts”, represented as cryptographic “boxes” that contain value and only unlock it if certain conditions are met. Smart contracts are capable of automatically enforcing the terms of a given agreement among a number of parties. This code can define strict rules and consequences in the same way that a traditional legal document would, stating the obligations, benefits and penalties which may be due to either party in various different circumstances. But unlike a traditional contract it can also take information as an input, process that information through the rules set out in the contract, and take any actions required of it as a result.

Given this primary focus of the Ethereum Network, it does not have the same single focus on its crypto currency as the Bitcoin Network, leading some to question whether it represents a reliable store of value.

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Acceptance of the Ethereum Network and other Digital Asset systems are subject to a variety of factors that are difficult to evaluate could affect the price of the Shares.

The adoption of ether will require growth in its usage and an accommodating regulatory environment. The Trust is not actively managed and will not have any strategy relating to the development of the Ethereum Network and changes in the regulatory environment. Furthermore, the Sponsor cannot be certain as to the impact of the listing of the Trust and the expansion of its ether holdings on the Digital Asset industry and the Ethereum Network. A decline in the popularity or acceptance of the Ethereum Network may harm the price of the Shares. There is no assurance that the Ethereum Network, or the service providers necessary to accommodate it, will continue in existence or grow. Furthermore, there is no assurance that the availability of and access to Digital Asset service providers will not be negatively affected by government regulation or supply and demand of ether.

Currently, there is little or no use of ether in the retail and commercial marketplace in comparison to relatively extensive use by speculators and miners, thus contributing to price volatility that could adversely affect an investment in the Shares.

As a relatively new product and technology, ether and the Ethereum Network have not yet been accepted as a means of payment for goods and services by major retail and commercial outlets. Banks and other established financial institutions may refuse to process funds for ether transactions, process wire transfers to or from Ether Exchanges, ether-related companies or service providers, or maintain accounts for persons or entities transacting in ether. Conversely, a significant portion of ether demand is generated by speculators and investors seeking to profit from the short- or long-term holding of ether and those that mine ether on the Ethereum Network. Price volatility undermines ether’s role as a medium of exchange as retailers are much less likely to accept it as a form of payment. Market capitalization for ether as a medium of exchange and payment method may always be low. A lack of expansion by ether into retail and commercial markets, or a contraction of such use, may result in increased volatility or a reduction in the value of ether, either of which could adversely impact an investment in the Shares.

Intellectual property rights claims may adversely affect the operation of the Ethereum Network.

Third parties may assert intellectual property claims relating to the holding and transfer of Digital Assets and their source code. Regardless of the merit of any intellectual property or other legal action, any threatened action that reduces confidence in the Ethereum Network’s long-term viability or the ability of end-users to hold and transfer ether may adversely affect an investment in the Shares. Additionally, a meritorious intellectual property claim could prevent the Trust and other end-users from accessing the Ethereum Network or holding or transferring their ether, which could force the termination of the Trust and the liquidation of the Trust’s ether (if such liquidation of the Trust’s ether is possible). As a result, an intellectual property claim against the Trust or other large Ethereum Network participants could adversely affect an investment in the Shares.

Risk Factors Related to the Ethereum Exchange Market

The value of the Shares relates directly to the value of the ether held by the Trust and fluctuations in the price of ether could adversely affect an investment in the Shares.

The Trust’s purpose is to provide shareholders with exposure to the daily change in the U.S. dollar price of ether, before expenses and liabilities of the Trust, as measured by the price of ether in U.S. dollars as reported by GDAX as of 4:00 p.m. Eastern time each day. As a result, the value of the Shares is directly related to the value of ether held by the Trust. The price of ether has fluctuated widely since trading commenced in 2015. Several factors may affect the market price of ether, including, but not limited to:

● Global ether supply; ● The adoption of, and demand for ether, which will be influenced by retail merchants’ and commercial businesses’ acceptance of ether as payment for goods and services (if it occurs), the security of online Ether Exchanges and public ether addresses that hold ether, the perception that the use and holding of ether is safe and secure, and an accommodating regulatory environment; ● Investors’ expectations with respect to the rate of inflation; ● Interest rates; ● Currency exchange rates, including the rates at which ether may be exchanged for fiat currencies; ● Fiat currency withdrawal and deposit policies of the Ether Exchanges and liquidity on the Ether Exchanges; ● Interruptions in service from or failures of the Ether Exchanges; ● Investment and trading activities of large investors, including private and registered funds, that may directly or indirectly invest in ether; ● Monetary policies of governments, trade restrictions, currency devaluations and revaluations;

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● Regulatory measures, if any, that restrict the use of ether as a form of payment or the purchase of ether on the Ether Market; ● The maintenance and development of the open-source software protocol of the Ethereum Network; ● Global or regional political, economic or financial events and situations; and ● Expectations among ether economy participants that the value of ether will soon change.

In addition, investors should be aware that there is no assurance that ether will maintain its value in the long or intermediate term. In the event that the price of ether declines, the Sponsor expects the value of an investment in the Shares to decline proportionately.

Pricing on the Ether Exchanges may continue to be volatile and can adversely affect an investment in the Shares.

The price of ether on the public Ether Exchanges has a limited one year history. During such history, ether prices on the Ether Exchanges have been volatile. Since its initial trading, ether has experienced one-day and one-month changes of 96.3% and 218%, respectively, on an intra-period basis.

The Trust will transact ether on a limited number of Ether Exchanges either because of actual or perceived counterparty or other risks related to a particular Ether Exchange. Trading on a limited number of Ether Exchanges may result in less favorable prices and decreased liquidity for the Trust and, therefore, could have an adverse effect on the Trust and Shareholders.

In purchasing or selling ether for the Trust, the Sponsor has the discretion to select the Ether Exchanges on which those transactions will occur and the timing of those transactions.

Under the procedures for the creation and redemption of Shares (see “CREATION AND REDEMPTION OF SHARES” ), the Sponsor will purchase ether for the Trust for creation orders to be settled in cash and will sell the Trust’s ether for redemption orders to be settled in cash. The Sponsor may also sell ether to generate cash for the payment of the Trust’s expenses. The Sponsor has the discretion to select the Ether Exchanges on which those purchases and sales will occur and the time during the creation or redemption periods at which those purchases and sales may be made. There is no assurance that the Sponsor will obtain the best available price in effecting those transactions.

The Ether Exchanges on which ether trades are relatively new and, in most cases, largely unregulated and, therefore, may be more exposed to fraud and failure than established, regulated exchanges for other products. Any fraud, security failure or operational issues experienced by the Ether Exchanges could result in a reduction in the value of ether and adversely affect an investment in the Shares.

The Ether Exchanges on which ether trades are new and, in most cases, largely unregulated. Furthermore, many Ether Exchanges do not provide the public with significant information regarding their ownership structure, management teams, corporate practices or regulatory compliance. As a result, the marketplace may lose confidence in, or may experience problems relating to, Ether Exchanges, including prominent exchanges handling a significant portion of the volume of ether trading. Ether Exchanges may impose daily, weekly, monthly or customer-specific transaction or distribution limits or suspend withdrawals entirely, rendering the exchange of virtual currency for fiat currency difficult or impossible. The participation in Ether Exchanges requires users to take on credit risk by transferring ether from a personal account to a third party’s account.

Over the past five years, a number of Digital Asset exchanges have been closed due to fraud, failure or security breaches. In many of these instances, the customers of such Digital Asset exchanges were not compensated or made whole for the partial or complete losses of their account balances in such Digital Asset exchanges. While smaller Digital Asset exchanges are less likely to have the infrastructure and capitalization that make larger Digital Asset exchanges more stable, larger Digital Asset exchanges are more likely to be appealing targets for hackers and “malware” (i.e., software used or programmed by attackers to disrupt computer operation, gather sensitive information or gain access to private computer systems). In 2014, the largest bitcoin exchange at the time, Mt. Gox, filed for bankruptcy in Japan amid reports the exchange lost up to 850,000 bitcoin, valued then at over $450 million.

A lack of stability in the Ether Exchange Market and the closure or temporary shutdown of Ether Exchanges due to fraud, business failure, hackers or malware, or government-mandated regulation may reduce confidence in the Ethereum Network and result in greater volatility in the market price of ether. These potential consequences of an Ether Exchange’s failure could adversely affect an investment in the Shares.

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The Shares may trade at a discount or premium in the trading price relative to the NAV as a result of non-concurrent trading hours between NYSE Arca and the Ether Exchanges.

The value of the Shares may be influenced by non-concurrent trading hours between NYSE Arca and various Ether Exchanges. While NYSE Arca is open for trading in the Shares for a limited period each day, the Ether Exchanges are a 24-hour marketplace. In addition, trading volume and liquidity on the Ether Exchanges is not consistent throughout the day and exchanges for Digital Assets, including the larger-volume markets, have been known to shut down temporarily or permanently due to security concerns, directed denial of service attack, and other reasons. As a result, during periods when NYSE Arca is open but large Ether Exchanges (or a substantial number of smaller Ether Exchanges) are either lightly traded or are closed, trading spreads and the resulting premium or discount on the Shares may widen and, therefore, increase the difference between the price of the Shares and the NAV. Premiums or discounts may have an adverse effect on an investment in the Shares if a Shareholder sells or acquires its Shares during a period of discount or premium, respectively.

To the extent that ether prices on the Ether Exchanges move negatively during hours when U.S. equity markets are closed, trading prices of the Shares may “gap” down at market open.

The value of a Share may be influenced by non-concurrent trading hours between U.S. equity markets and various Ether Exchanges. While U.S. equity markets are open for trading in the Shares for a limited period each day, the Ether Exchanges are a 24-hour marketplace. During periods when U.S. equity markets are closed but Ether Exchanges are open, significant changes in the price of ether in the Ether Exchanges could result in a difference in performance between the price of ether and the most recent Share price. To the extent that the price of ether in the Ether Exchanges moves significantly in a negative direction after the close of U.S. equity markets, the trading price of the Shares may “gap” down to the full extent of such negative price shift when U.S. equity markets reopen. To the extent that the price of ether in the Ether Exchanges drops significantly during hours in which U.S. equity markets are closed, investors 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.

A possible “short squeeze” due to a sudden increase in demand for the Shares that largely exceeds supply may lead to price volatility in the Shares.

Investors may purchase Shares to hedge existing ether or other Digital Assets, commodity or currency exposure or to speculate on the price of ether. Speculation on the price of ether may involve long and short exposures. To the extent that aggregate short exposure exceeds the number of Shares available for purchase (for example, in the event that large redemption requests by Authorized Participants dramatically affect Share liquidity), investors with short exposure may have to pay a premium to repurchase Shares for delivery to Share lenders. Those repurchases may, in turn, dramatically increase the price of the Shares until additional Shares are created through the creation process. This is often referred to as a “short squeeze.” A short squeeze could lead to volatile price movements in the Shares that are not directly correlated to the price of ether.

Purchasing activity in the Ether Exchanges associated with Basket creation or selling activity following Basket redemption may affect the price of ether and Share trading prices. These price changes may adversely affect an investment in the Shares.

Purchasing activity associated with acquiring ether required for delivery to the Trust in connection with the creation of Baskets may increase the market price of ether on the Ether Exchanges, which will result in higher prices for the Shares. Increases in the market price of ether 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 ether that may result from increased purchasing activity of ether connected with the issuance of Baskets. Consequently, the market price of ether may decline immediately after Baskets are created. If the market price of ether declines, the trading price of the Shares will generally also decline.

Selling activity associated with sales of ether by the Trust in connection with the redemption of Baskets may decrease the market price of ether on the Ether Exchanges, which will result in lower prices for the Shares. Decreases in the market price of ether may also occur as a result of the selling activity of other market participants. If the market price of ether declines, the trading price of the Shares will generally also decline.

An investment in the Shares may be adversely affected by competition from other methods of investing in ether or from other Digital Assets.

The Trust will compete with direct investments in ether, bitcoin and other potential financial vehicles, possibly including other securities backed by or linked to ether and Digital Asset exchange traded products (“ETPs”) that are similar to the Trust or that focus on other Digital Assets. Market and financial conditions, and other conditions beyond the Sponsor’s control, may make it more attractive to invest in other financial vehicles, including vehicles that focus on other Digital Assets, or to invest in ether directly, which could limit the market for the Shares and reduce the liquidity of the Shares.

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The market price of ether may be affected by the sale of other Digital Asset ETPs or other financial instruments tracking the price of ether.

To the extent Digital Asset ETPs other than the Trust or other financial instruments, such as futures contracts, track the price of ether are formed or offered and represent a significant proportion of demand for ether, large redemptions of the securities of these Digital Asset ETPs or other financial instruments, or private funds holding ether, could negatively affect the market price of ether and the NAV.

Political or economic crises may motivate large-scale sales of ether, which could result in a reduction in the market price of ether and adversely affect an investment in the Shares.

The availability of other Digital Assets could have a negative impact on the price of ether and adversely affect an investment in the Shares.

Ether is the second largest Digital Asset by market capitalization, behind bitcoin. As of August 2017, there were over 800 alternate Digital Assets tracked by CoinMarketCap.com, having a total market capitalization (including the market capitalization of ether) of approximately $159 billion, using market prices and total available supply of each Digital Asset. This included Digital Assets using a “proof of work” mining structure similar to Ether, and those using a “proof of stake” transaction verification system that is different than Ether’s mining system (e.g., Peercoin, Bitshares and NXT). The emergence or growth alternative Digital Assets could have a negative impact on the demand for, and price of, ether and thereby adversely affect an investment in the Shares.

Risk Factors Related to the Trust and the Shares

The Sponsor and its management have no history of operating an investment vehicle like the Trust and their experience may be inadequate or unsuitable to manage the Trust.

The Sponsor was formed to be the Sponsor of the Trust and has no history of past performance in managing investment vehicles like the Trust. The past performance of the Sponsor’s management in other positions, including their experience in the commodities industry, is no indication of their ability to manage an investment vehicle such as the Trust. If the Sponsor is unable to manage an investment vehicle such as the Trust, the operations of the Trust may be adversely affected.

Fees and expenses will be charged regardless of profitability and may result in the depletion of Trust’s assets.

The Trust will pay the Sponsor’s Fee of [●]% per annum. While the Sponsor will pay routine operational, administrative and other ordinary fees and expenses of the Trust, extraordinary expenses resulting from unanticipated events may become payable by the Trust. Shareholders are expected to be charged a customary commission by their brokers in connection with purchases of Shares that will vary from shareholder to shareholder. A shareholder may never achieve profits, significant or otherwise, by investing in the Trust or a return of the shareholders’ investment in the Trust.

The Trust invests solely in ether.

Other than cash held in connection with the creation or redemption of Baskets or for the payment of fees and expenses, the Trust will invest solely in ether, which is a new and highly speculative asset. The ether held by the Trust is commingled and investors have no specific rights to any specific ether. In the event of the Trust’s insolvency, its assets may be inadequate to satisfy a claim by an investor. The Trust is not actively “managed” by traditional methods and it will not take any steps to minimize volatility or manage risk. There is no assurance that this investment program will be successful. Ether is volatile and investment results may vary substantially over time. The Sponsor will not wind down the Trust based solely on a drop in the trading price of ether, regardless of how significant. No assurance can be made that profits will be achieved or that substantial or complete losses will not be incurred.

The value of the Shares could decrease if unanticipated operational or trading problems arise.

There may be unanticipated problems or issues with respect to the mechanics of the Trust’s operations and the trading of the Shares that could have an adverse effect on an investment in the Shares. In addition, although the Trust is not actively “managed” by traditional methods, to the extent that unanticipated operational or trading problems or issues arise, the Sponsor’s past experience and qualifications may not be suitable for solving these problems or issues.

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The lack of an active trading market for the Shares may result in a loss on an investment in the Shares when they are sold.

Although the Trust plans to apply to have the Shares listed on NYSE Arca, there is no assurance that an active trading market will develop or be maintained for the Shares. Even if an active trading market does develop, it may not provide sufficient liquidity, and the Shares may not trade at prices advantageous to investors. If an investor wants to sell Shares at a time when no active trading market exists for the Shares, the price received for the Shares will likely be lower than the price an investor would receive if an active trading market did exist and, accordingly, the investor may experience a loss on the sale of the Shares.

The Shares may trade at a price which is at, above or below the NAV and any discount or premium in the trading price relative to the NAV may widen as a result of non-concurrent trading hours.

The Shares may trade on NYSE Arca at, above or below the NAV. The NAV will fluctuate with changes in the market value of the Trust’s assets. The trading price of the Shares will fluctuate in accordance with changes in the NAV as well as market supply and demand, which will be driven in large part by the price of ether. The price difference may be due, in large part, to the fact that supply and demand forces at work in the secondary trading market for the Shares are closely related, but not identical, to the same forces influencing the market price of ether. Consequently, an Authorized Participant may be able to create or redeem a Basket of Shares at a discount or a premium to the public trading price per Share.

Authorized Participants, or their clients or customers, may have an opportunity to realize a riskless profit if they can create a Basket at a discount to the public trading price of the Shares or can redeem a Basket at a premium over the public trading price of the Shares. The Sponsor expects that the exploitation of such arbitrage opportunities by Authorized Participants and their clients and customers will tend to cause the public trading price to track the NAV closely over time, although there is no assurance this will happen. Such arbitrage opportunities will not be available to Shareholders who are not Authorized Participants.

If Authorized Participants are able to purchase or sell large amounts of ether in the open market at prices that are different than the GDAX Price, the arbitrage mechanism intended to keep the price of the Shares closely linked to the GDAX Price may not function properly and the Shares may trade at a discount or premium to the NAV.

The arbitrage mechanism on which the Trust relies to keep the price of the Shares closely linked to the GDAX Price may not function properly if Authorized Participants are able to purchase or sell large amounts of ether in the open market at prices that are materially higher or lower than the GDAX Price. Although the GDAX Price is designed to accurately capture the market price of ether, Authorized Participants may purchase ether for creation units or sell ether from creation unit redemptions through transactions on public or private markets or Ether Exchanges where such transactions may take place at prices materially higher or lower than the GDAX Price. Under either such circumstance, the arbitrage mechanism will function to link the price of the Shares to the prices at which Authorized Participants are able to purchase or sell large amounts of ether. To the extent the prices from other Ether Exchanges differ materially from the GDAX Price, the price of the Shares may no longer track, whether temporarily or over time, the GDAX Price, which could adversely impact an investment in the Trust by reducing investors’ confidence in the Shares’ ability to track the market price of ether and the GDAX Price. If the Trust accepts cash from Authorized Participants for creations, or agrees to provide cash to redeeming Authorized Participants, there is no guarantee that the Trust will be able to achieve a better than average market price for ether or will purchase ether at the most favorable price available. The price of ether achieved by the Trust may be affected generally by a wide variety of complex and difficult to predict factors such as ether supply and demand; rewards and transaction fees for the recording of transactions on the blockchain; availability and access to virtual currency service providers (such as payment processors), exchanges, miners or other ether users and market participants; perceived or actual Ethereum Network or ether security vulnerability; inflation levels; fiscal policy; interest rates; and political, natural and economic events.

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The chart below compares the average daily spot prices for ether in US dollars for the 12 month period ending July 27, 2017 on GDAX, the Gemini Exchange, and BitFinex, three exchanges on which a high volume of ether is traded.

If the processes of creation and redemption of Baskets encounter any unanticipated difficulties, the opportunities for arbitrage transactions intended to keep the price of the Shares closely linked to the GDAX Price may not exist and, as a result, the price of the Shares may fall.

If the processes of creation and redemption of the Baskets encounter any unanticipated difficulties, including, but not limited to, the Trust’s inability in the future to obtain regulatory approvals for the offer and sale of additional Shares after the present offering is completed, potential market participants who would otherwise be willing to purchase or redeem Baskets to take advantage of any arbitrage opportunity arising from discrepancies between the price of the Shares and the price of the underlying ether may not take the risk that, as a result of those difficulties, they may not be able to realize the profit they expect. If this is the case, the liquidity of the Shares may decline and the price of the Shares may fluctuate independently of the GDAX Price and may fall.

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The postponement, suspension or rejection of Creation Basket orders or Redemption Basket orders, as permitted in certain circumstances under the Trust Servicing Agreement, may adversely affect an investment in the Shares.

Under the Trust Servicing Agreement, the Administrator or Sponsor may postpone, suspend or reject Creation Basket orders or Redemption Basket orders, as applicable, for a variety of permitted reasons under certain circumstances. To the extent such orders are postponed, suspended or rejected, the arbitrage mechanism resulting from the process through which Authorized Participants create and redeem Shares directly with the Trust may fail to closely link the price of the Shares to the value of the underlying ether. If this is the case, the liquidity of the Shares may decline and the price of the Shares may fluctuate independently of the market price of ether and may fall.

Ether transactions are irrevocable and stolen or incorrectly transferred ether may be irretrievable. As a result, any incorrectly executed ether transactions by the Trust could adversely affect an investment in the Shares.

Ether transactions are not, from an administrative perspective, 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 of ether or a theft of ether 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 ether will regularly be made to or from the Trust Ether Account, it is possible that, through computer or human error, or through theft or criminal action, the Trust’s ether could be transferred in incorrect amounts or to unauthorized third parties. 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 ether through error or theft, the Trust will be unable to revert or otherwise recover incorrectly transferred Trust ether. To the extent that the Trust is unable to seek redress for such error or theft, such loss could adversely affect an investment in the Shares.

The DAO, a decentralized autonomous organization created using the “smart contract” feature of the Ethereum Network, had 3.6 million ether stolen by a hacker due to developer errors.

The Trust’s ether may be subject to loss, damage, theft or restriction on access.

There is a risk that part or all of the Trust’s ether could be lost, stolen or destroyed, potentially by the loss or theft of the private keys held by the Ether Custodian associated with the public ether addresses that hold the Trust’s ether. The Sponsor believes that the Trust’s ether held in the Trust Ether Custody Account will be an appealing target to hackers or malware distributors seeking to destroy, damage or steal the Trust’s ether or private keys. Neither the Custodians nor the Sponsor can guarantee that such loss, damage or theft will not occur, whether caused intentionally, accidentally or by act of God. Access to the Trust’s ether could also be restricted by natural events (such as an earthquake or flood) or human actions (such as a terrorist attack). Any of these events may adversely affect the operations of the Trust and, consequently, an investment in the Shares.

Shareholders’ limited rights of legal recourse against the Trust, Trustee, Sponsor, Administrator, Trust Agency Service Provider and Custodians and the Trust’s lack of insurance protection expose the Trust and the holders of the Shares to the risk of loss of the Trust’s ether for which no person is liable.

Each Custodian will maintain insurance with regard to its custodial business on such terms and conditions as it considers appropriate in connection with its custodial obligations and will be responsible for all costs, fees and expenses arising from the insurance policy or policies. The Trust will not be a beneficiary of any such insurance and does not have the ability to dictate the existence, nature or amount of coverage. Therefore, holders of the Shares cannot be assured that the Custodians will maintain adequate insurance or any insurance with respect to the ether held by the Custodians on behalf of the Trust. Furthermore, Shareholders’ recourse against the Trust, Custodians and Sponsor under New York law governing their custody operations is limited. Similarly, Shareholders’ recourse against the Administrator and Trust Agency Service Provider for the services they provide to the Trust, including those relating to the provision of instructions relating to the movement of ether, is limited. Consequently, a loss may be suffered with respect to the Trust’s ether which is not covered by insurance and for which no person is liable in damages. Notwithstanding the foregoing, to the extent that the Trust incurs a loss related solely to the Trust’s ether held in the Ether Custodian’s hot wallet, such loss may be covered by the Ether Custodian’s insurance policy.

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Ether held by the Trust is not subject to FDIC or SIPC protections.

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. The undivided interests in the Trust’s ether represented by the Shares in the Trust are not insured.

Risks of Uninsured Losses.

At this time, the Trust does not intend to seek to obtain insurance to cover losses associated with ether because of (i) the lack of available and comprehensive policies, and (ii) the prohibitive cost of the limited coverage available.

The Ether Custodian maintains an insurance policy that covers its digital assets and applies to the Trust’s ether that is held in the Ether Custodian’s “hot wallet.” However, the majority of the Trust’s ether will be held in the Ether Custodian’s proprietary cold storage system, and thus will not be covered by the Ether Custodian’s insurance policy. In general, the Trust anticipates that any losses related to its activities and operations will be uninsurable, except for the minimal ether holdings of the Trust that are covered by the Ether Custodian’s insurance policy. If an uninsured loss occurs, the Trust could lose the majority of its assets.

Risks Relating to Reliance on Third Party Service Providers.

Due to audit and operational needs, there will be individuals who have information regarding the Trust’s or the Custodians’ operations, financials, or security measures. Any of those individuals may purposely or inadvertently leak such information, which could adversely affect an investment in the Shares.

The Trust may not have adequate sources of recovery if its ether is lost, stolen or destroyed.

If the Trust’s ether is lost, stolen or destroyed under circumstances rendering a party liable to the Trust, the responsible party may not have the financial resources sufficient to satisfy the Trust’s claim. For example, as to a particular event of loss, the only source of recovery for the Trust might be limited to the Custodians or, to the extent identifiable, other responsible third parties (e.g., a thief or terrorist), any of which may not have the financial resources (including liability insurance coverage) to satisfy a valid claim of the Trust. Furthermore, to our knowledge, at this time, there is no U.S. or foreign governmental, regulatory, investigative, or prosecutorial authority or mechanism through which to bring an action or complaint regarding missing or stolen ether. Consequently, the Trust may be unable to replace missing ether or seek reimbursement for any erroneous transfer or theft of ether. To the extent that the Trust is unable to seek redress for such action, error or theft, such loss could adversely affect an investment in the Shares.

The liquidity of the Shares may also be affected by the withdrawal from participation of one or more Authorized Participants.

In the event that one or more Authorized Participants having substantial interests in Shares or otherwise responsible for a significant portion of the Shares’ daily trading volume on NYSE Arca withdraw from participation, the liquidity of the Shares will likely decrease, which could adversely affect the market price of the Shares and adversely affect an investment in the Shares.

As a new fund, there is no guarantee that an active trading market for the Shares will develop. To the extent that no active trading market develops on NYSE Arca and the assets of the Trust do not reach a viable size, the liquidity of the Shares may be limited or the Trust may be terminated at the option of the Sponsor.

As a new fund, there can be no assurance that the Trust will grow to or maintain an economically viable size, in which case the Sponsor may elect to terminate the Trust, which could result in the liquidation of the Trust’s ether at a time that is disadvantageous to an investor in the Shares. Additionally, there is no guarantee that an active trading market will develop and that the Shares will be liquid on the NYSE Arca. A reduction in the liquidity of the Shares on NYSE Arca could adversely affect an investment in the Shares.

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The lack of a market for the Shares may limit the ability of holders to sell their Shares.

There has been no market for the Shares, and there can be no assurance that an active trading market for the Shares will be developed or maintained. If an active trading market for the Shares does not exist or continue to exist, the market prices and liquidity of the Shares may be adversely affected.

The Trust may be required to terminate and liquidate at a time that is disadvantageous to the holders of the Shares.

If the Trust is required to terminate and liquidate, such termination and liquidation could occur at a time that is disadvantageous to Shareholders, such as when the price of ether is lower than it was at the time when Shareholders purchased their Shares. In such a case, when the Trust’s ether is sold as part of the Trust’s liquidation, the resulting proceeds distributed to Shareholders will be less than if the price of ether were higher at the time of sale. See “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 Shareholders.

Holders of the Shares will not have the rights enjoyed by investors in certain other vehicles.

As interests in an investment trust, the Shares have none of the statutory rights normally associated with the ownership of shares of a corporation (including, for example, the right to bring “oppression” or “derivative” actions). In addition, the Shares have limited voting and distribution rights (for example, Shareholders do not have the right to elect directors and will not receive dividends). See “Description of the Shares” for a description of the limited rights of Shareholders.

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

The Administrator will calculate the NAV using the GDAX Price on each Business Day. To the extent that such price of ether and the resulting NAV is incorrectly calculated, the Administrator will not be liable for any error and such misreporting of valuation data could adversely affect an investment in the Shares.

Extraordinary expenses resulting from unanticipated events may become payable by the Trust, adversely affecting an investment in the Shares.

In consideration for the Sponsor’s Fee, the Sponsor has contractually assumed certain operational and periodic expenses of the Trust. See “Expenses; Sales of Ether.” Extraordinary expenses of the Trust (e.g., expenses relating to litigation) and any other expenses that are not assumed by the Sponsor under the terms of the Trust Agreement are borne by the Trust and paid through the sale of the Trust’s ether. Any incurring of extraordinary expenses by the Trust could adversely affect an investment in the Shares.

The Trust’s transfer or sale of ether to pay expenses or other operations of the Trust could result in holders of the Shares incurring tax liability without an associated distribution from the Trust.

Each delivery, transfer or sale of ether by the Trust to pay the Sponsor’s Fee or other expenses will be a taxable event for the holders of the Shares. This or other operations of the Trust could result holders of the Shares incurring tax liability without an associated distribution from the Trust. Any tax liability could adversely impact an investment in the Shares and may cause holders of the Shares to be required to prepare and file additional tax documents. See “United States Federal Income Tax Consequences—Taxation of U.S. Holders.”

The sale of the Trust’s ether to pay expenses not assumed by the Sponsor at a time of low ether prices could adversely affect the value of the Shares.

The Administrator will transfer ether held by the Trust to the Trust Expense Account to pay Trust expenses not assumed by the Sponsor on an as-needed basis, irrespective of then-current ether prices on the Ether Exchanges. The Trust is not actively managed and no attempt will be made to buy or sell ether to protect against or to take advantage of fluctuations in the price of ether. Consequently, the Trust’s ether may be sold at a time when the prices of ether on the Ether Exchanges are low, resulting in a negative impact on the value of the Shares.

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The value of the Shares will be adversely affected if the Trust is required to indemnify the Sponsor, the Trustee, the Administrator, the Trust Agency Service Provider or the Custodians under the Trust Documents.

Under the Trust Documents, each of the Sponsor, the Trustee, the Administrator, the Trust Agency Service Provider and the Custodians has a right to be indemnified by the Trust for any liability or expense it incurs without gross negligence, bad faith or willful misconduct on its part. Therefore, the Sponsor, Trustee, Administrator, Trust Agency Service Provider or Custodians 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 net asset value of the Trust and the NAV.

Intellectual property rights claims may adversely affect the Trust and an investment in the Shares.

The Sponsor is not aware of any intellectual property claims that may prevent the Trust from operating and holding ether; however, third parties may assert intellectual property claims