21Shares Solana ETF

Item 1A. Risk Factors

You should carefully consider the risk factors discussed below as well as the risk factors discussed in Part I, Item 1A. Risk Factors in our Registration Statement on Form S-1 (333-280557) declared effective on November 18, 2025, Annual Report, which could materially affect our business, financial condition or future results. TOthere h than as described herein, there have been no material changes in our risk factors from those disclosed thereinin our 2025 Annual Report on Form 10-K.

The risks described below and in our ProspectusAnnual Report are not the only risks facing the Trust. You should also consider any risks and uncertainties described under the caption Risk Factors in any applicable prospectus, prospectus supplement, registration statement or other document that we file with the SEC before or after the date of this dateprospectus that is incorporated by reference herein. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

The exTrust Agreement inclusive jurisdictides a provision for certain types of actions and proceedrestricting Shareholders right to brings and wa a derivativer of trial by jury clauses set forth in  action.

Under Section 7.4 of the Trust Agreement may have the effect of limiting a Sh, Shareholders statutory right under Delawareholders rights t law to bring legala derivative action against (i.e., to initiate a lawsuit in the name of the Trust and could limit a purchasers abilityin order to assert a claim belonging to obtainthe Trust against a favorable judiiducial forum fry of the Trust or disputes with the Trust.

Tagainst a third-party when the Trust Agrees management provides that the courts of the state ofhas refused to do so) is restricted. Under Delaware and any felaw, a shareholderal courts located in Wilmington, Delaw may bring a derivative action if the shareholder is a share will be tholder at the exclusive jurisditime the action foris brought any claims, suits, actions or proceedings. Td either (i) was a shareholder at the time of the Trust has agreetransaction at issue or (ii) acquired that this e status of shall not apply to causes of actions for violations of U.S. fereholder by operation of law or the Trusts governing instrument from a person who was a shareholderal or state securities laws.  at the time of the transaction at issue. Additionally, Section 223816(e) of the SecuritiesDelaware Statutory Trust Act creates concurrent jurisdiction for fespecifically provides that a beneficial owners right to bring a deral and state courts over all suits brought to enforceivative action may be subject to such additional standards and restrictions, if any duty or liability created by, as are set forth in the Securities Act orgoverning instrument of the rules and regulstatutory trust, including, without limitations, thereunder. Investors cannot waive compliance with the federal securities laws and the rules and regulations requirement that beneficial owners owning a specified beneficial interest in thereunder.

By purchasing Shares  statutory trust join in the Trust, Shareholbringing of the ders waivative certain claims thataction. In addition to the courrequirements of the state of Deapplicable laware and any federal courts located in Wilmington, in accordance with Section 3816(e) of the Delaware is an inconvenient venue or is otherwise inappropriate. As such, Statutory Trust Act, the Trust Agreement provides that no Shareholders could be required will have the right, power or authority to litigatbring or maintain a derivative a mattction, suit or other relatproceeding to on behalf of the Trust in a Delaware court, even if that court may ounless two or more Shareholders who are eligible to bring such derivative action under therwise be inconvenient for the Shareholder.

T Delaware Trust Statute and who (i) are not Affiliates (as defined in the Trust Agreement also waives nd below) of one another and (ii) collectively hold at least 10% of the right to trial by jury in any outstanding Shares join in the bringing or maintaining of such claimaction, suit, action o or other proceeding, provided that causes of actions for violations of the Exchange Act or . Affiliate means (i) any Person directly or indirectly owning, controlling or holding with power to vote 10% or more of the Soutstanding voting securities Act will not be governed by the waiver of the right of such Person, (ii) any Person 10% or more of whose outstanding voting securities are directly or indirectly owned, controlled or held with power to trialvote by jury provision of the Trust Agreement. If a lawsuit is brought against the Trust, it may be heard only by a judgesuch Person, (iii) any Person, directly or indirectly, controlling, controlled by or under common control of such Person, (iv) any employee, officer, director, member, manager or justice of the applicable trial court, partner of such Person, or (v) if such Person is an employee, officer, director, member, manager or partner, any Person for which would be conducted according to different civisuch Person acts in any such capacity; and Person means any natural procedureserson and may result in different outany partnership, limited liability comes than a tripany, statutory trust, corporation, association, or other legal by jury wouentity.

In addition to the 10% ownership threshold hadescribed above, includthe Trust Agreement imposes the following results that could be less favorable to further procedural conditions on any Shareholder seeking to bring a derivative action on behalf of the plaintiffs inTrust: (1) prior to bringing any such action. By purchasing, two or more non-affiliated Shares in tholders collectively holding at least 10% of the Trust,outstanding Shareholders waivs must first make a right to a trial by jury which may limit a Shareholders ability pre-suit demand upon the Sponsor to bring the subject action, unless an effort to cause the Sponsor to bring a claim in a judicial forum that it finds favorable such an action is not likely to succeed (a demand shall only be deemed not likely to succeed, and therefor disputes withe excused, if the Trust.

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Tax Risk

The ongoing activities ofSponsor has a personal financial interest in the Trust may generate tax liabilities ftransaction at issue, and the Sponsor shall not be deemed interested in a transaction or Shareholders.

It is expected that eachotherwise disqualified from ruling on the merits of a Shareholder will include indemand by virtue of the computfact that the Sponsor receives remuneration of their taxable income their proportionate share of the taxable infor his or her service as Sponsor of the Trust or as a trustee or director of one or more trusts that are under come and expenses of thmon management with or otherwise affiliated with the Trust, including gains a); and (2) unless a demand losses realized in connection withis excused pursuant to clause (1) of this paragraph, the use or saSponsor must be afforded a reasonable of SOLamount of time to pay Truconsider such Shareholder request expenses or facilitate redemption transactiand to investigate the basis of such claim and the Sponsor shall be entitled to retain counsel or other advisors in cons, as well asidering the merits of the request, any amounts received in connection with std the Sponsor shall require an undertaking by the Shareholders making, as applicable. T such request to reimburse the Trust efor the expects to make cash distributions at least quarnse of any such advisor in the event the Sponsor deterly to Shareholders, but even if it did mines not to take action. Any decision by the Sponsor to bring, maintain, or compromise (or not, any tax liability to bring, maintain, or compromise) any such court action, proceeding or claim, or to submit that a e matter to a vote of Shareholder incurs as a result of hols, shall be made by the Sponsor in good faith and shall be binding upon the Shares will needholders. In addition to claims that must be sbrought derivatisfied from some ovely under applicable law, ther source of funds. If a Trust Agreement requires that any claim affecting all Shareholder sells Shares in ords of the Trust proportionately, based on their number to raise funds to satisfy such a tax liability, the sale itself may generate addiof Shares of the Trust, must also be brought as a derivative claim subject to these conditions, regardless of whether such claim involves a violational taxable gain or loss.

SOL staking may result in adverse tax consequences for Shareholders.

To the extent the Sponsor determines to stake a portion of the Trusts SOL, the staking of  of a Shareholders rights under the Trust Agreement or any other alleged violation of contractual or individual rights that might otherwise give rise to a direct claim (and regardless, in each case, of whether such claims sound in tort, fraud or otherwise, or are based on common law, statutory, equitable, legal or othe Trusts SOL is expected to resulr grounds).

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These provisions apply to any derivative actions brought in the name of the Trusts receipt of amounts received in connection with staking in other than derivative claims brought under the federal U.S. securities laws and the rules and regulations the reunder. The enformceability of addiSectional SOL. Any such rewards are expected to be treate 7.04s derivative action threshold as ordinary income for U.S.nd procedural requirements under applicable federal income tax purposesor state law has not been definitively established. Thus,e 10% ownership the Trusreshold and procedural requirements receipt ofpresent contractual rewards strictions on derived from SOL staking activities could result in ative actions authorized by Section 3816(e) of the Delaware Statutory Trust Act, which expressly permits trust instruments to modify or restrict the rights of beneficial owners of Shares incurring tax liability whito bring derivative actions. However, the application of such may not correspona threshold in amount or timing with a cash distribution from the context of a registered exchange-traded product has not been comprehensively addressed by the Trustcourts. Additionallccordingly, the Trusts receipt of amounts received in connection with staking couit is possible that a court could decline to enforce the Trusts 10% threshold have implications for investors sensiand procedural requirements.

A Shareholder wishing to bring a derivative to unrelated business taxable income, U.S. withaction on behalf of the Trust must satisfy both the 10% ownership thresholding taxes or taxable income effectively connected with a U.S. trade or business. T and the pre-suit demand process described above before commencing any such action, suit or other proceeding, further limiting the ability of a Shareholder to seek redress in the U.S. federal incomname of the Trust. Due tax treato these additional requirement of staks, a Shareholder attempting may change from that described in to bring or maintain a derivative action in the name of the Trusts prospectus fil will be required with the SEC on November 18, 2025, possibly with retroactito locate other Shareholders with which it is not affiliated and that have effect.

The treatment sufficient Shares to meet the 10% threshold based on the number of stakShares outstanding in a grantor trust for U.S. federal income tax purposes is still developing.

As a grantor trust, on the date the claim is brought and thereafter throughout the duration of the action, suit or proceeding. Shareholders wishing to satisfy this ownership threshold would need to identify and coordinate with other Shareholders of the Trust can undertake only certa. Because the Trusts Shares are held in types of activities. For example, gbook-entry form through the DTC and benerally, the Trust canficial ownership information is not vary itspublicly available, individual investment portfolio to take advantage of market fluctuors may face substantial difficulty in locations. The Trust may receive income from invng other Shareholders. There is no mechanism estment activities that do nablished by the Trust to facilitate such shareholder coordination, and the Trust is not require such decision-making. On November 10, 2025,d to assist Shareholders in identifying one another. Accordingly, even Shareholders who believe the Treasury Department and IRS issued guidancey have a legitimate derivative claim may, as a providing a safe harbor for certain stakactical matter, be unable to satisfy the 10% threshold and bring an activities with an investment trust ton. Even if successful, this may be difficult and may result in increatsed as a grantor trust for U.S. federalcosts to a Shareholder attempting to seek redress income tax purposes. T the name of the requirements under the safe Trust in court.

Moreover, if Sharbor and under existeholders bringing law are subject to interpretation. Ia derivative action, suit or proceeding pursuant to this provision of the Trust were viewed as undertakAgreement do not hold 10% of the outstanding Shares on the types ofdate such an activities that would not be allowaon, suit or proceeding is brought, or such Shareholders are unable for U.S. federal income tax purposes,to maintain Share ownership meeting the 10% threshold thenroughout the Trust could lose its income tax status aduration of the action, suit or proceeding, such Shareholders derivative action may be subject to dismissal. As a grantor tresult, the Trust, and t Agreement limits the Trust could likelihood that a Shareholder will be reclable to successfully assified as a partnership. Iert a derivative action in the name of the Trust were reclassified , even if such Shareholder believes that he or she has a partnership, a more complex reportvalid derivative action, suit or other proceeding regime would apply, and to bring on behalf of the Trust.

Because the Trusts Shareholders would receive a Form K-1. If s are held in book-entry form through DTC, the beneficial owners of Shares are generally not reflected on the Trust wes share reclassified as a partnership but did not satisfy a safe gister. Accordingly, any shareholder or group of Shareholders seeking to establish that they collectively hold at least 10% of the outstanding Sharbor or exception toes must provide documentary evidence of the publicly traded partir beneficial ownership rules, it could be reclassified as a corporation, which would subject the Trust to corporate level tax, andas of the date of the derivative demand. Acceptable evidence may include broker statements, DTC participant confirmations, account statements from a registered broker-dealer or bank the Shareholders return on investment would likeat is a DTC participant, or such other documentation as the Trust may reasonably be affected.

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