NASDAQ: VBNB

On November 14, 2025, Van Eck Associates Corporation
(the “Seed Capital Investor”), the parent of the Sponsor, subject to certain conditions, purchased the “Seed Shares,”
comprising 4,000 Shares at a per-Share price of $25.00. Delivery of the Seed Shares was made on November 14, 2025. Total proceeds to the
Trust from the sale of the Seed Shares were $100,000. On May 7, 2026, the Seed Shares were redeemed for cash and the Seed Capital Investor
purchased the “Seed Creation Baskets,” comprising a total of 40,000 Shares at a per-Share price of $25.00, which was equal
to 1,555.1639998 BNB. The price of BNB was determined using the MarketVectorTM BNB Benchmark Rate (the “Index”) on May
7, 2026. Total proceeds to the Trust from the sale of the Seed Creation Baskets were $1,000,000. Delivery of the Seed Creation Baskets
was made on May 7, 2026.

The Trust’s net asset value (“NAV”)
was $2,140,751 at June 30, 2026, the Trust’s fiscal year end. Outstanding Shares of the Trust were 100,000 at June 30, 2026.

The Trust is not actively managed and will not
take any actions to take advantage, or mitigate the impacts, of volatility in the price of BNB.

The activities of the Trust include (i) selling
Shares in blocks of 10,000 Shares (“Baskets”) to financial firms that are registered broker-dealers (“Authorized Participants”
or “APs”) in exchange for cash or BNB (depending on whether the creation is cash or in-kind); (ii) distributing cash or BNB
to Authorized Participants redeeming Baskets; (iii) purchasing or receiving the amount of BNB represented by the Basket being created;
and (iv) selling BNB (as needed) to distribute cash to Authorized Participants redeeming Shares or to pay the Sponsor’s Fee and
Trust expenses not assumed by the Sponsor, if any.

The Trust sells and redeems its Shares only in
Baskets that are based on the amount of BNB represented by the Basket being created, the amount of BNB being equal to the combined NAV
of the number of Shares included in the Basket (net of the accrued but unpaid remuneration due the Sponsor (“Sponsor Fee”)
and any accrued but unpaid expenses or liabilities not assumed by the Sponsor). The Trust conducts subscriptions and redemptions in cash
or in-kind.

The Sponsor of the Trust maintains a website at
https://www.vaneck.com. The information on the Trust’s website is not, and shall not be
deemed to be, part of this report or incorporated into any other filings we make with the SEC. Additional information regarding the Trust
may also be found on the Securities and Exchange Commission (the “SEC”)’s EDGAR database at www.sec.gov.

Trust Objective

The Trust’s investment objective is to reflect
the performance of the price of BNB, and rewards from staking a portion of the Trust’s BNB, to the extent the Sponsor in its sole
discretion (i) implements staking and (ii) determines that the Trust may do so without undue legal or regulatory risk, such as, without
limitation, by jeopardizing the Trust’s ability to qualify as a grantor trust for U.S. federal income tax purposes, less the expenses
of the Trust’s operations. As of the date of this Report, the Trust does not stake any of its BNB.

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The Trust is a passive investment vehicle that
does not seek to pursue any investment strategy beyond reflecting the performance of the price of BNB and any rewards from staking a portion
of the Trust’s BNB (to the extent staking is implemented). As a result, the Trust will not attempt to speculatively sell BNB at
times when its price is high or speculatively acquire BNB at low prices in the expectation of future price increases, nor will the Trust
attempt to avoid losses or hedge exposure arising from the risk of changes in the price of BNB. The Trust will not utilize leverage, derivatives,
or any similar arrangements in seeking to meet its investment objective.

Listing

The Shares are listed for trading on The Nasdaq
Stock Market LLC (the “Exchange”) under the ticker symbol “VBNB.”

BNB and the BNB Chain Ecosystem

BNB is the native token of the BNB Smart Chain
and serves as the base (“gas”) currency for transactions, smart contract interactions and deployment, as a governance token
on BNB Smart Chain that allows token holders to participate in the governance of the network, and can currently be used to obtain discounts
on trading fees on Binance. BNB was introduced in 2017 as an ERC-20 token on the Ethereum network and later migrated to the Binance Chain
and BNB Smart Chain. BNB can be staked to help secure the network and earn staking rewards.

BNB was initially issued with a maximum supply
target of 200 million tokens. However, the total number of BNB tokens in circulation is variable and subject to change over time, and
the total supply is gradually reduced through a token burn mechanism, which permanently removes tokens from circulation based on usage
and predefined rules.

BNB is a digital asset that is created and transmitted
through the operations of a multi-chain blockchain system (the “BNB Chain”) ecosystem. The BNB Chain ecosystem is designed
to provide scalable, Ethereum Virtual Machine (“EVM”)-compatible smart contract execution and decentralized data storage.
The BNB Chain ecosystem currently consists of three blockchains: BNB Smart Chain (formerly called the Binance Smart Chain), opBNB, and
BNB Greenfield.

The BNB Chain ecosystem enables users to exchange
tokens including BNB, in transactions which are recorded on a public transaction ledger known as a blockchain. BNB may be used to pay
for goods and services, including computational power on the BNB Smart Chain, or it may be converted to fiat currencies, such as the U.S.
dollar, at rates determined on digital asset trading platforms or in individual end-user-to-end-user transactions under a barter system.

The BNB Smart Chain was designed to allow users
to write and implement smart contracts—that is, general-purpose code that executes on every computer in the network and can instruct
the transmission of information and value based on a sophisticated set of logical conditions. Using smart contracts, users can create
markets, store registries of debts or promises, represent ownership of property, move funds in accordance with conditional instructions
and create digital assets other than BNB on the BNB Smart Chain. Smart contract operations are executed on the BNB Smart Chain in exchange
for payment of BNB. Like the Ethereum network, the BNB Chain ecosystem is one of a number of projects intended to expand blockchain use
beyond just a peer-to-peer money system.

The current BNB Chain ecosystem is comprised of
three blockchains, BNB Smart Chain, opBNB and BNB Greenfield, which allow the network to create and trade assets such as BNB, coordinate
transaction validators and facilitate the creation of smart contracts. Each chain serves a different purpose: BNB Smart Chain is a Layer
1 blockchain used to enable the development of user-generated permissionless applications (“dApps”), including in the decentralized
finance (“DeFi”) space; opBNB is a Layer 2 scaling solution built on top of the BNB Smart Chain; and BNB Greenfield is a Layer
1 blockchain with decentralized data storage capabilities.

BNB Smart Chain is powered by the proof-of-staked-authority
consensus protocol (“PoSA”), which combines elements of delegated proof of stake (“DPoS”) and proof-of-authority
(“PoA”) by requiring validators to stake BNB and be selected based on stake and reputation. Currently, the number of BNB Smart
Chain validator set consists of 45 active validators, comprising 21 “cabinet” (active block-producing) validators, and 24
“candidate” (standby) validators. This design is intended to permit faster block confirmation times and lower transaction
fees than some other blockchain networks however, this design may result in greater centralization compared to networks with larger, more
distributed validator sets.

Although the technical and strategic development
was originally initiated by Binance, the BNB Chain ecosystem is now supported by a large number of participants. The BNB Chain ecosystem
community coordinates governance processes through a shared governance mechanism (e.g., BEP proposals and validator consensus), and no
single person or entity has the formal ability to unilaterally amend or change the BNB Chain ecosystem’s source code. There can
be no assurance that certain entities, such as Binance, which issued BNB

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tokens and oversees certain features of BNB on
an ongoing basis (such as periodic burns), or affiliated persons thereof do not exercise control or informal influence, such as through
their ongoing involvement in the BNB Chain ecosystem operations or their large holdings of BNB.

Competition

The Trust and the Sponsor face competition with
respect to the creation of competing products, such as exchange-traded products offering exposure to the spot BNB market or other digital
assets. There can be no assurance that the Trust grows to or maintains an economically viable size. While there are no predetermined criteria
for determining whether the Trust has reached an economically viable size, the Sponsor monitors the Trust’s assets and liabilities,
average daily trading volume of the Shares, and other factors on an ongoing basis. If the Trust is unable to reach or maintain an economically
viable size, trading in Shares may occur at wider spreads than other competitor products, which could adversely affect the Shareholders.

Additionally, Shareholders may be subject to a
higher expense ratio than expected if the Trust incurred any operating expenses that are not borne by the Sponsor. There is no guarantee
that the Sponsor will obtain or maintain a commercial advantage relative to competitors offering similar products. Whether or not the
Trust is successful in achieving its intended scale may be impacted by a range of factors, such as the Trust’s timing in entering
the market and its fee structure relative to those of competitive products.

The MarketVectorTM BNB Benchmark
Rate

MarketVector is the index sponsor and index administrator
for the MarketVectorTM BNB Benchmark Rate. MarketVector is a wholly-owned subsidiary of VanEck. MarketVector Indexes GmbH is
the calculation agent for the MarketVectorTM BNB Benchmark Rate and an affiliate of VanEck.

The MarketVectorTM BNB Benchmark Rate
is a U.S. dollar-denominated composite reference rate for the price of BNB. The Index is calculated daily between 00:00 and 24:00 (ET)
and the Index values are disseminated to data vendors. The Index is disseminated in U.S. dollars and the closing and intraday value is
calculated over twenty three-minute intervals pursuant to a methodology referred to as an equal-weighted average of the volume-weighted
median price.

The MarketVectorTM BNB Benchmark Rate
is designed to be a robust price for BNB in U.S. dollars. There is no component other than BNB in the Index. The underlying trading platforms
are sourced from the industry-leading BITA Exchange Ranking report, which is issued by BITA GmbH. BITA GmbH (“BITA”) is a
Germany-based fintech company that provides enterprise-grade indexes, data and infrastructure to institutions operating in the passive
and quantitative investment spaces. Active in the digital asset industry since 2018, BITA GmbH provides crypto calculation, index administration,
and infrastructure solutions to financial institutions globally. BITA reviews various trading exchanges and analyzes such exchanges to
determine whether the exchanges should be approved as a data source (approved exchanges are referred to by BITA as “whitelisted”).
BITA’s methodology for evaluating exchanges utilizes a combination of qualitative and quantitative metrics to analyze a comprehensive
data set, covering five categories of evaluation. The categories of evaluation include regulatory stability, liquidity, data quality,
technology and usability. BITA evaluates each category of each exchange with respect to each different digital asset, with different weights
assigned to each category to arrive at a “total score” for each exchange. BITA then ascribes a rating to each exchange and
determines the minimum total score for an exchange to be included in each pricing index. Each qualifying exchange is then ranked by BITA
according to their “total score” to determine their BITA ranking, which determines the weighting of such exchange in the MarketVectorTM
BNB Benchmark Rate. The BITA Exchange Ranking report provides a framework for assessing risk of each trading platform and brings transparency
and accountability to a rapidly evolving market and industry. Based on the BITA Exchange Ranking report, MarketVector initially selects
the top five trading platforms by rank for inclusion in the MarketVectorTM BNB Benchmark Rate. If an eligible trading platform
is downgraded by two or more notches in a semi-annual review and is no longer in the top five by rank, it is replaced by the highest ranked
non-component trading platform. Adjustments to exchange coverage are announced four business days prior to the first business day of each
of June and December at 23:00 CET. The MarketVectorTM BNB Benchmark Rate is rebalanced at 16:00:00 ET on the last trading day
of each of May and November. The constituent trading platforms of the MarketVectorTM BNB Benchmark Rate are Binance, Bybit,
Coinbase, Gate.io, and OKX.

The MarketVectorTM BNB Benchmark Rate is
subject to oversight by an Independent Oversight Function (“IOF”), which is composed of persons who are independent from,
and not responsible for, the operation or management of the Index. The IOF reviews and approves the rules in the index guide and material
methodology changes to the Index. Material changes to the index guide are subject to review and approval before publication and implementation,
and notice of such changes is generally published 30 days in advance on MarketVector’s website at https://www.marketvector.com/insights/news.
None of the information on the Index Administrator’s website is incorporated by reference into this Annual Report on Form 10-K.

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Net Asset Value Determinations

The Trust’s NAV is calculated based on the
Trust’s net asset holdings as reconciled to the BNB Custodians’ accounts on a market approach, determined on a daily basis
in accordance with the MarketVectorTM BNB Benchmark Rate price at 4:00 pm Eastern time.

The Trust’s NAV per Share is calculated
by:

● taking the current market value of its total
assets;

● subtracting any liabilities; and

● dividing that total by the total number of outstanding
Shares.

The Trust Agreement gives the Sponsor the exclusive
authority to determine the Trust’s NAV and the Trust’s NAV per Share, which it has delegated to the Administrator.

The Administrator calculates the NAV of the Trust
once each Exchange trading day. The NAV for a normal trading day is released after 4:00 p.m. Eastern time. Trading during the core trading
session on the Exchange typically closes at 4:00 p.m. Eastern time. However, NAVs are not officially struck until later in the day (often
by 5:30 p.m. Eastern time and generally no later than 8:00 p.m. Eastern time). The pause between 4:00 p.m. Eastern time and 5:30 p.m.
Eastern time (or later) provides an opportunity to detect, flag, investigate, and correct unusual pricing should it occur.

The Sponsor monitors for significant events related
to crypto assets that may impact the value of BNB and determines in good faith, and in accordance with its valuation policies and procedures,
whether to fair value the Trust’s BNB on a given day (e.g., if the MarketVectorTM BNB Benchmark Rate is not available
the Sponsor). In certain circumstances, the Sponsor determines whether to fair value the Trust’s BNB on a given day on whether certain
pre-determined criteria have been met. For example, if the MarketVectorTM BNB Benchmark Rate deviates by more than a pre-determined
amount from an alternate benchmark available to the Sponsor, then the Sponsor may determine to utilize the alternate benchmark. The Sponsor
may also fair value the Trust’s BNB using observed market transactions from one or more exchanges. The Sponsor may also fair value
the Trust’s BNB using a combination of inputs in certain situations (e.g., using observed market transactions, OTC quotations from
brokers, etc.).

Accordingly, the NAV of the Trust may reflect
the fair value of BNB rather than the BNB market prices on certain exchanges at 4:00 p.m. Eastern time. Fair value pricing involves subjective
judgments and it is possible that a fair value determination for BNB or other assets is materially different than the value that could
be realized upon the sale of such BNB or assets. In addition, fair value pricing could result in a difference between the prices used
to calculate the Trust’s NAV and the prices used by the MarketVectorTM BNB Benchmark Rate.

Intraday Indicative Value

The Sponsor, in conjunction with the Administrator,
works in good faith to determine the fair value and implement the correct calculation of the Trust’s NAV. The NAV for the Trust
is calculated by the Administrator once a day and is disseminated daily to all market participants at the same time. Quotation and last-sale
information regarding the Shares is disseminated through the facilities of the Consolidated Tape Association (“CTA”). In addition,
in order to provide updated information relating to the Trust for use by Shareholders and market professionals, ICE Data Indices, LLC
calculates and disseminates throughout the core trading session on each trading day an updated intraday indicative value (“IIV”).
The IIV is calculated by taking creation unit holdings and updating that value throughout the trading day to reflect changes in the price
of BNB; this value is then divided by the numbers of shares per creation unit in order to calculate an IIV on a “per share”
basis.

The IIV disseminated during the Exchange core
trading session hours should not be viewed as an actual real time update of the NAV, because NAV per Share is calculated only once at
the end of each trading day based upon the relevant end of day values of the Trust’s investments. The Trust will provide the IIV
per Share updated every fifteen (15) seconds, as calculated by the Exchange or a third-party financial data provider during the Exchange’s
regular trading hours (9:30 a.m. to 4:00 p.m. E.T.). The IIV is disseminated on a per Share basis every fifteen (15) seconds during regular
Exchange core trading session hours of 9:30 a.m. Eastern time to 4:00 p.m. Eastern time. ICE Data Indices, LLC will disseminate the IIV
value through the facilities of CTA/CQ High Speed Lines. In addition, the indicative fund value is published on the Exchange’s website
and is available through on-line information services such as Bloomberg and Reuters. The IIV may differ from the NAV due to the differences
in the time window of trades used to calculate each price (the NAV uses a sixty (60)-minute window, whereas the IIV draws prices from
the last trade on each exchange in an effort to produce a relevant, real-time price). The Sponsor does not believe this will cause confusion
in the marketplace, as Authorized Participants are the only Shareholders who interact with the NAV and the Sponsor will communicate its
NAV calculation methodology clearly.

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There are many instances in the market today where
the IIV and the NAV of an ETF are subtly different, whether due to the calculation methodology, market hours overlap or other factors.
The Sponsor has seen limited or no negative impact on trading, liquidity, or other factors for exchange-traded funds in this situation.
The Sponsor believes that the IIV will closely track the globally integrated BNB price as reflected on the contributing real BNB trading
platforms.

Dissemination of the IIV provides additional information
that is not otherwise available to the public and is useful to Shareholders and market professionals in connection with the trading of
the Trust’s Shares on the Exchange. Shareholders and market professionals are able throughout the trading day to compare the market
price of the Trust and the IIV. If the market price of the Trust’s Shares diverges significantly from the IIV, market professionals
have an incentive to execute arbitrage trades. For example, if the Trust appears to be trading at a discount compared to the IIV, a market
professional could buy the Trust’s Shares on the Exchange and sell short futures contracts. Such arbitrage trades can tighten the
tracking between the market price of the Trust and the IIV and thus can be beneficial to all market participants.

Secondary Market Trading

The Trust creates and redeems Shares from time
to time, but only in one or more Baskets. The creation and redemption of Baskets are only made in exchange for delivery to the Trust or
the distribution by the Trust of the amount of BNB (or corresponding amount of cash) equal to the number of Shares included in the Baskets
being created or redeemed determined on the day the order to create or redeem Baskets is properly received.

As discussed above, Authorized Participants are
the only persons that may place orders to create and redeem Baskets. Authorized Participants must be registered broker-dealers or other
securities market participants, such as banks and other financial institutions that are not required to register as broker-dealers to
engage in securities transactions. An Authorized Participant is under no obligation to create or redeem Baskets, and an Authorized Participant
is under no obligation to offer to the public Shares of any Baskets it does create.

Authorized Participants that do offer to the public
Shares from the Baskets they create will do so at per-Share offering prices that are expected to reflect, among other factors, the trading
price of the Shares on the Exchange, the NAV of the Trust at the time the Authorized Participant purchased the Baskets, the NAV of the
Shares at the time of the offer of the Shares to the public, the supply of and demand for Shares at the time of sale, and the liquidity
of BNB or other portfolio investments. Baskets are generally redeemed when the price per Share is at a discount to the NAV per Share.
Shares initially comprising the same Basket but offered by Authorized Participants to the public at different times may have different
offering prices. An order for one or more Baskets may be placed by an Authorized Participant on behalf of multiple clients. Authorized
Participants who make deposits with the Trust in exchange for Baskets receive no fees, commissions or other forms of compensation or inducement
of any kind from either the Trust or the Sponsor and no such person has any obligation or responsibility to the Sponsor or the Trust to
effect any sale or resale of Shares. Shares trade in the secondary market on the Exchange.

Shares trade in the secondary market on the Exchange.
Shares may trade in the secondary market at prices that are lower or higher relative to their NAV per Share. The amount of the discount
or premium in the trading price relative to the NAV per Share may be influenced by various factors, including the number of Shareholders
who seek to purchase or sell Shares in the secondary market and the liquidity of BNB.

The Sponsor

The Sponsor arranged for the creation of the Trust
and is responsible for the ongoing registration of the Shares for their public offering in the United States and the listing of Shares
on the Exchange. The Sponsor has developed a marketing plan for the Trust, prepares marketing materials regarding the Shares of the Trust,
and exercises the marketing plan of the Trust on an ongoing basis. The Sponsor appoints and may remove the Trust’s other service
providers, including the Trustee, Administrator, Transfer Agent, the BNB Custodians, and Marketing Agent (as defined below), as well as
any additional, replacement, or successor service providers. The Sponsor has agreed to pay all ordinary operating expenses (except for
litigation expenses and other extraordinary expenses) out of the Sponsor’s unified fee.

The Cash Custodian

Under the cash custodian agreement (the “Cash
Custody Agreement”), State Street Bank and Trust Company acts as custodian for the Trust’s cash (in such capacity, the “Cash
Custodian”). The Cash Custodian is responsible for, among other things, maintaining a separate deposit account or accounts for cash
in the name of the Trust and determining the amount of BNB and/or cash required for the issuance or redemption, as the case may be, of
Shares in creation unit aggregations of the Trust after the end of each trading day.

Under the Cash Custody Agreement between State
Street and the Trust, State Street may act as custodian for the Trust’s non-BNB assets, if any, and as custodian for the Trust’s
cash (in such capacity, the “Cash Custodian”). The Cash Custodian has agreed to, among

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other things, open and maintain a separate deposit
account or accounts of the Trust, to determine the amount of BNB and/or cash required for an issuance or redemption of shares in a Basket
and to release and deliver non-BNB assets and pay out cash.

The Cash Custodian credits to the deposit account(s)
all cash received by the Cash Custodian from or for the account of the Trust. Upon an instruction to purchase Shares for the account of
the Trust, the Cash Custodian pays out cash of the Trust to purchase Shares. Upon an instruction to redeem Shares for the account of the
Trust, the Cash Custodian shall transfer the Shares so as to sell or redeem the Shares and receive proceeds of such sale or redemption.

Staking

Staking on the BNB Smart Chain refers to using
BNB, or permitting BNB to be used through an agent or otherwise, in the BNB Smart Chain’s proof-of-staked-authority validation protocol,
in exchange for the receipt of consideration, including, but not limited to, staking rewards paid in-kind (collectively, “Staking”).
As of the date of this Report, the Trust does not stake any of its BNB and, accordingly, has not implemented a staking program and liquidity
risk policy (the “Staking Policy”) or established a staking committee, and has not engaged any Staking Services Provider (as
defined below). At this time, none of the Trust, the Sponsor, the BNB Custodians, nor any other person associated with the Trust engages,
directly or indirectly, in Staking of the Trust’s BNB on behalf of the Trust, meaning no action is taken pursuant to which any portion
of the Trust’s BNB becomes used in any staking protocol or is used to earn additional digital assets or generate income or other
earnings, and there can be no assurance that the Trust, the Sponsor, the BNB Custodians or any other person associated with the Trust
will ever engage in Staking of the Trust’s BNB or such income generating activity in the future. Under current law, there can be
no assurance that Staking the Trust’s BNB would be consistent with the intended treatment of the Trust as a grantor trust for U.S.
federal income tax purposes.

The Trust’s investment objective includes
rewards from staking a portion of the Trust’s BNB to the extent the Sponsor in its sole discretion (i) implements staking and (ii)
determines that the Trust may do so without undue legal or regulatory risk, including, without limitation, by jeopardizing the Trust’s
ability to qualify as a grantor trust for U.S. federal income tax purposes (the satisfaction of such conditions, the “Staking Condition”).
To the extent the Trust were to satisfy the Staking Condition with respect to a particular form of Staking, in the future the Trust may
seek to establish a program to use its BNB in a staking mechanism to receive rewards comprising additional BNB in respect of a portion
of its BNB holdings. However, as long as such conditions and requirements have not been satisfied, the Trust will not use its BNB in a
staking protocol to receive rewards comprising additional BNB or other digital assets in respect of its BNB holdings. The current inability
of the Trust to use its BNB in Staking and receive rewards could place the Shares at a comparative disadvantage relative to an investment
in BNB directly or through a vehicle that is not subject to such a limitation, which could negatively affect the value of the Shares.

Because the Trust does not currently engage in
Staking, the Trust does not earn staking rewards that may be available to holders of BNB who directly stake their tokens through validators
or staking service providers. As a result, the performance of the Shares reflects only the price performance of BNB (less the Trust’s
expenses) and does not reflect any staking rewards that may be earned by direct holders of BNB who participate in staking.

Staking Arrangements

If and when the Staking Condition is satisfied
and the Sponsor determines to stake all or a portion of the Trust’s BNB, the Sponsor anticipates that the Trust will enter into
written arrangements (the “Staking Arrangements”) with the BNB Custodians and one or more third party staking services providers
(each, a “Staking Services Provider”), which may be affiliates of the BNB Custodians or other trusted institutional node operators,
to stake the Trust’s BNB and use it in validation on the BNB Smart Chain (such activities, “Staking Activities,” and
the BNB so staked, “Staked Assets”).

The Staking Services Provider would be the validator
or node operator and would be obligated to operate the validator through which the Trust’s BNB is staked. The Trust’s BNB
would be staked directly from the BNB Accounts, and the Staking Services Provider would perform
any related validation activities. The Trust would retain control of its Staked Assets because (1) the Staked Assets would remain in the
applicable BNB Account (rather than transferred to a wallet address controlled by the Staking Services
Provider) and (2) the Trust (rather than the Staking Services Provider) would retain the ability through the BNB Custodians to un-stake
its BNB. The Trust would not lease or loan its BNB, and the Staking Services Provider would not be authorized to leverage, rehypothecate,
pledge or otherwise encumber the Trust’s BNB.

Subject to the Staking Condition being satisfied
and subject to compliance with certain related requirements, the Sponsor would have sole discretion over whether, and what portion of
the Trust’s BNB, to stake and un-stake, and there can be no assurance that the Sponsor will cause the Trust to engage in Staking
Activities, meaning that the Trust’s BNB may remain unstaked for the foreseeable future and indefinitely if necessary.

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In connection with any Staking Activities, the
Sponsor may implement policies and procedures to manage the liquidity of the Trust’s BNB, including maintaining a portion of the
Trust’s BNB in an unstaked state in order to pay the Sponsor Fee and Trust expenses and to satisfy existing and reasonably foreseeable
redemption requests, given that BNB subject to staking may be inaccessible during applicable bonding, unbonding or exit periods. These
liquidity risk policies and procedures are intended to be consistent with the Exchange’s generic listing standards. However, there
can be no assurance that such arrangements will be available as intended or provide sufficient liquidity to satisfy redemption requests.

Under any such Staking Arrangements, the Staking
Services Provider would regularly credit staking rewards to the Trust, net of (i) any applicable payments to the Staking Services Provider
as compensation for its services (the “Staking Provider Consideration”) and (ii) any custodian staking facilitation fee. Staking
rewards received in respect of the Staked Assets, net of fees, would be credited to the Trust as earned and reflected in the Trust’s
daily NAV, with a 4:00 p.m. Eastern time cut-off, and the Trust would recognize such rewards as income in its books and records as earned
and report such income in its quarterly and annual reports on a trade-date basis in accordance with GAAP. Before engaging in Staking,
the Sponsor expects to implement the Staking Policy, which describes the frequency of, and conditions under which the Trust will make
distributions of staking rewards, if any, to Shareholders. The Sponsor will make the Staking Policy available to Shareholders on the Trust’s
website.

To the extent that the Staking Condition is
satisfied and Staking is implemented, the Sponsor anticipates that the BNB Custodians and the Staking Services Provider would be
entitled to receive a portion of the gross staking rewards generated under the Staking Arrangements, reflecting the custodian
staking facilitation fee and the Staking Provider Consideration, with the remainder received by the Trust. In addition, pursuant to
the Trust Agreement and as consideration for the Sponsor’s facilitation of the Staking, the Sponsor may be permitted to
receive a fee equal to a portion of the staking rewards, payable in BNB, as would be described in the Staking Policy. To the extent
the Sponsor determines to engage in Staking Activities on the Trust’s behalf, the Trust will provide a description of the
Trust’s staking program and related policies (including the Staking Policy), and notification will be made to Shareholders via
a prospectus supplement and/or a current report filed with the SEC. Any future Staking Activities would be conducted in a manner
intended to preserve the Trust’s status as a grantor trust for U.S. federal income tax purposes.

The First BNB Custodian

Anchorage Digital Bank N.A. serves as
the Trust’s First BNB Custodian and is a National Trust Bank regulated by the Office of the Comptroller of the
Currency. The First BNB Custodian is authorized to serve as the Trust’s custodian under the Trust Agreement and
pursuant to the terms and provisions of the custody agreement (the “First BNB Custody Agreement”). The First BNB
Custodian has its principal office at 101 S. Reid Street, Suite 307 #329, Sioux Falls, South Dakota 57103.

The First BNB Custodian makes
available to the Trust a custodial account for BNB maintained by the First BNB Custodian (the “First BNB
Account”) and access to an omnibus custodial account held at depository institutions in the First BNB Custodian’s
name for the benefit of its customers at which a cash balance may be maintained (a “Fiat Account” and, collectively,
the fiat currency accounts made available to the Trust by the BNB Custodians, the “Fiat Accounts”). The First
BNB Custodian’s services in respect of the First BNB Account (i) allow BNB to be deposited from a public blockchain
address to the Trust’s First BNB Account and (ii) allow BNB to be withdrawn from the First BNB Account to a public
blockchain address as instructed by the Trust. The First BNB Custody Agreement requires the First BNB Custodian to hold the
Trust’s BNB in cold storage. The First BNB Custodian uses segregated cold storage BNB addresses for the Trust. The
addresses on the BNB Smart Chain at which the Trust’s BNB in the First BNB Account are held by the First BNB Custodian
are separate from the BNB addresses that the First BNB Custodian uses for its other customers and are directly verifiable
via the BNB Smart Chain. The First BNB Custodian will safeguard the private keys to the BNB associated with the Trust’s
First BNB Account. The First BNB Custodian will at all times record and identify in its books and records that such BNB
constitutes the property of the Trust. The First BNB Custodian will not withdraw the Trust’s BNB from the Trust’s
First BNB Account with the First BNB Custodian, or loan, hypothecate, pledge or otherwise encumber the Trust’s BNB,
without the Trust’s instruction, nor will the Sponsor or any other entity or service provider. The Trust will not lease
or loan BNB held in the Trust’s First BNB Account with the First BNB Custodian and will not give instructions to that
effect.

In respect of the Fiat Account at
the First BNB Custodian, the First BNB Custodian holds the Trust’s cash held in its account with the First BNB
Custodian in one or more Customer Omnibus Accounts. “Customer Omnibus Account” means, with respect to fiat
currency held for customers of the First BNB Custodian (including the Trust’s cash balance in
its Fiat Account), omnibus bank accounts (each an “Omnibus Account”) at FDIC-insured, regulated depository
institutions selected by Anchorage (each, a “Fiat Institution”). The First BNB Custodian makes no representation
about the availability of pass-through FDIC deposit insurance in connection with the Omnibus Account at such
Fiat Institutions.

The Sponsor may, in its sole discretion, add or
terminate other BNB custodians. The Sponsor may, in its sole discretion, change the custodian for the Trust’s BNB holdings, but
it will have no obligation to do so or to seek any particular terms for the Trust from other such custodians. To the extent that the Sponsor
adds or terminates other BNB custodians, or changes the custodian for the Trust’s BNB holdings, notifications are made to Shareholders
via a prospectus supplement and/or a current report filed with the SEC.

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The Second BNB Custodian

BitGo Bank & Trust, National
Association (“BitGo”) serves as the Trust’s Second BNB Custodian. The Second BNB Custodian is a national
banking association chartered under the laws of the United States and authorized by the Office of the Comptroller of the
Currency to exercise custodial powers. Subsequent to fiscal year end, on August 5, 2026, the Trust entered into a custody agreement with the Second BNB
Custodian (the “Second BNB Custody Agreement”). The Second BNB Custodian is authorized to serve as a custodian of the Trust’s BNB under the Trust Agreement and pursuant to the terms and provisions of the Second BNB Custody Agreement. The Second BNB Custodian has its principal address at 101 S. Reid Street, Suite 307 PMB #9793, Sioux Falls,
South Dakota 57103.

The Second BNB Custodian makes available to the
Trust a custodial account for BNB maintained by the Second BNB Custodian (the “Second BNB Account”) and, as part of its custodial services, the ability to hold
fiat currency in a Fiat account for the Trust’s benefit. The Second BNB Custodian’s services in respect of the Second BNB Account
(i) allow BNB to be deposited from a public blockchain address to the Trust’s Second BNB Account and (ii) allow BNB to be withdrawn
from the Second BNB Account to a public blockchain address as instructed by the Trust. To the extent the Trust holds BNB with the Second
BNB Custodian, such BNB is segregated from both the property of the Second BNB Custodian and the assets of the
Second BNB Custodian’s other customers, except for BNB specifically moved into shared accounts by the Trust.

The Second BNB Custodian will safeguard the private
keys to any BNB held in the Trust’s Second BNB Account. The Second BNB Custodian will keep the private keys associated with any
such BNB in cold storage. Cold storage is a safeguarding method by which the private keys corresponding to BNB are generated and stored
in an offline manner. Private keys are generated in offline computers or devices that are not connected to the internet so that they are
more resistant to being hacked. By contrast, in hot storage, the private keys are held online, where they are more accessible, leading
to more efficient transfers, though they are potentially more vulnerable to being hacked. The Second BNB Custodian may receive deposits
of BNB but may not send BNB without use of the corresponding private keys. The Second BNB Custodian has represented the Systems and Organizational
Control (“SOC”) attestations are performed on the Second BNB Custodian by an external provider on an annual basis. Neither
the Second BNB Custodian nor any other entity is permitted to withdraw any BNB held for the Trust from the Second BNB Account,
or loan, hypothecate, pledge or otherwise encumber such BNB, without the consent of the Trust.

In respect of the Fiat Account at the Second BNB Custodian, the Second BNB Custodian may hold the Trust’s fiat currency in
a custodial account for the Trust’s benefit and custodies such fiat currency in one or more customer omnibus accounts. Such
customer omnibus accounts may consist of (i) deposit accounts established by the Second BNB Custodian at a bank, (ii) money
market accounts or money market funds established by the Second BNB Custodian at a bank, or (iii) such other accounts as may
be agreed between the Trust and the Second BNB Custodian in writing from time to time. Each such customer omnibus account
is maintained in the name of the Second BNB Custodian or in the name of the Second BNB Custodian for the benefit of its customers,
is under the Second BNB Custodian’s control and is maintained separately from the Second BNB Custodian’s business, operating
and reserve accounts. The Second BNB Custodian maintains records identifying the Trust’s beneficial ownership of the applicable
fiat currency.

The First BNB Custodian and the
Second BNB Custodian are collectively referred to as the “BNB Custodians.” The First BNB Custody Agreement and
the Second BNB Custody Agreement are collectively referred to as the “BNB Custody Agreements.”

The Trustee

CSC Delaware Trust Company, a Delaware trust company,
acts as the trustee of the Trust for the purpose of creating a Delaware statutory trust in accordance with the Delaware Statutory Trust
Act (“DSTA”). The Trustee is appointed to serve as the trustee of the Trust in the State of Delaware for the sole purpose
of satisfying the requirement of Section 3807(a) of the DSTA that the Trust have at least one trustee with a principal place of business
in the State of Delaware.

General Duty of Care of Trustee

The Trustee is a fiduciary under the Trust Agreement;
provided, however, that the fiduciary duties and responsibilities and liabilities of the Trustee are limited by, and are only those specifically
set forth in, the Trust Agreement.

Resignation, Discharge or Removal of Trustee;
Successor Trustees

The Trustee may resign upon at least sixty (60)
days’ prior written notice to the Sponsor; provided, however, that such resignation shall not be effective until such time as a
successor Trustee has accepted such appointment. The Sponsor may remove the Trustee at any time upon sixty (60) days’ prior written
notice to the Trustee; provided, however, that such removal shall not be effective until such time as a successor Trustee has accepted
such appointment.

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Upon the resignation or removal of the Trustee,
the Sponsor shall appoint a successor Trustee. If no successor Trustee shall have been appointed and shall have accepted such appointment
within sixty (60) days after the giving of such notice of resignation or removal, the Trustee may petition any court of competent jurisdiction
for the appointment of a successor Trustee. Any successor Trustee appointed pursuant to the Trust Agreement shall be eligible to act in
such capacity in accordance with the Trust Agreement and, following compliance with the Trust Agreement, shall become fully vested with
the rights, powers, duties and obligations of its predecessor under the Trust Agreement, with like effect as if originally named as Trustee.
Any such successor Trustee shall notify the Trustee of its appointment by providing a written instrument to the Trustee. At such time
the Trustee shall be discharged of its duties herein. Any corporation into which the Trustee may be merged or converted or with which
it may be consolidated, or any corporation resulting from any merger, conversion, or consolidation to which such Trustee shall be a party,
or any corporation to which substantially all the corporate trust business of the Trustee may be transferred, shall, subject to the preceding
sentence, be the Trustee under the Trust Agreement without further act.

The Administrator

State Street Bank and Trust Company (“State
Street”) serves as the Trust’s administrator (the “Administrator”). State Street’s principal address is
One Congress Street, Boston, MA 02111. Under the Trust Administration and Accounting Agreement, the Administrator provides necessary administrative,
tax, and accounting services and financial reporting for the maintenance and operations of the Trust, including valuing the Trust’s
BNB and calculating the net asset value per Share of the Trust and the net asset value of the Trust and supplying pricing information
to the Sponsor for the Trust’s website. In addition, the Administrator makes available the office space, equipment, personnel and
facilities required to provide such services.

The Transfer Agent

State Street Bank serves as the transfer agent
for the Trust. The Transfer Agent: (1) issues and redeems Shares of the Trust; (2) responds to correspondence by Shareholders and others
relating to its duties; (3) maintains Shareholder accounts; and (4) makes periodic reports to the Trust. The Trust’s Transfer Agent
facilitates the settlement of Shares in response to the placement of creation orders and redemption orders from Authorized Participants.

The Marketing Agent

Van Eck Securities Corporation (the “Marketing
Agent”), a wholly owned subsidiary of VanEck, is responsible for reviewing and approving the marketing materials prepared by the
Trust for compliance with applicable SEC and Financial Industry Regulatory Authority (“FINRA”) advertising laws, rules, and
regulations.

The Trust’s Fees and Expenses

The Trust pays the Sponsor a unified fee (the
“Sponsor Fee”) of 0.39% of average daily net assets that accrues daily and pays monthly. The Sponsor Fee is paid by the Trust
to the Sponsor as compensation for services performed under the Trust Agreement. The Administrator makes its determination regarding the
Sponsor Fee in respect of each day by reference to the Trust’s NAV as of that day. The Sponsor Fee accrues in U.S. dollars daily
and is payable monthly in arrears in BNB on, or by, the tenth (10th) business day of the next month in respect of the prior month. Each
month, the Administrator calculates the Sponsor Fee for each day of the month, resulting in a cumulative total in U.S. dollars, which
the Administrator then calculates the BNB equivalent of by reference to the Index as of the date of calculation, and the Sponsor shall
then withdraw the corresponding amount of BNB from the Trust’s BNB Account in payment of the Sponsor Fee.

The Sponsor has agreed to pay all ordinary operating
expenses (except for extraordinary expenses, including but not limited to, non-recurring expenses and costs of services performed by the
Sponsor or a service provider on behalf of the Trust to protect the Trust or the interests of Shareholders, such as any applicable custodian
staking facilitation fee, and in connection with any indemnification of agents, service providers, or counterparties of the Trust and
extraordinary legal fees and expenses, including any legal fees and expenses incurred in connection with litigation, regulatory enforcement
or investigation matters) out of the Sponsor Fee. For extraordinary expenses not covered in the previous sentence, the Sponsor shall pay
these expenses as they become due and seek contemporaneous reimbursement from the Trust in the form of BNB at the time of payment. For
extraordinary expenses denominated in dollars, the Sponsor shall convert the expense amounts into BNB at the Index price on the date the
Sponsor seeks such reimbursement from the Trust, and shall withdraw the corresponding amounts of BNB from the Trust as reimbursement for
paying such extraordinary expenses of the Trust. For extraordinary expenses denominated in BNB, if any, the Sponsor shall withdraw the
corresponding amounts of BNB from the Trust as reimbursement for paying such extraordinary expenses. Neither the Trust nor the Shareholders
shall be responsible for any fees and expenses incurred by the Sponsor to withdraw BNB from the Trust’s BNB Account in connection
with payment of the Sponsor Fee or Trust expenses not assumed by the Sponsor, or to convert such BNB, once withdrawn, into cash (if applicable).

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The Sponsor will sell BNB which may be facilitated
by one or more Liquidity Providers and/or the BNB Custodians or an affiliate thereof, in connection with the termination of the Trust
and the liquidation of the Trust’s BNB holdings, which the Sponsor shall do at a price which it is able to obtain through commercially
reasonable efforts, and arrange for the distribution of the cash proceeds to the Trust’s Shareholders and creditors (if any). The
amount of BNB held by the Trust may vary from time to time depending on the level of the Trust’s expenses and liabilities and the
market price of BNB. Furthermore, the Sponsor may, in its sole discretion, agree to rebate all or a portion of the Sponsor Fee attributable
to Shares held by certain investors, or share a portion of the Sponsor Fee with such investors, subject to certain minimum Shareholding
and lock up requirements as determined by the Sponsor to foster stability in the Trust’s asset levels. Any such rebate or sharing
of the Sponsor Fee will be subject to negotiation and agreement between the Sponsor and the investor on a case-by-case basis. The Sponsor
is under no obligation to provide any rebates of, or share, the Sponsor Fee. Neither the Trust nor the Trustee will be a party to any
Sponsor Fee rebate or sharing arrangements negotiated by the Sponsor. Any Sponsor Fee rebate, or any sharing of the Sponsor Fee, will
be paid from the funds of the Sponsor (including the Sponsor Fee) and not from the assets of the Trust. In addition, the Sponsor may,
at its sole discretion and from time to time, waive all or a portion of the Sponsor Fee for stated periods of time. The Sponsor is under
no obligation to waive any portion of its fees and any such waiver shall create no obligation to waive any such fees during any period
not covered by the waiver. In the future, if the Sponsor decides to waive all or a portion of the Sponsor Fee, Shareholders will be notified
in a prospectus supplement, in the Trust’s periodic Exchange Act reports and/or on the Trust’s website.

Creation and Redemption of Shares

The Trust creates and redeems Shares from time
to time, but only in one or more Baskets. Baskets are only made in exchange for delivery to the Trust of the amount of BNB represented
by the Baskets being created or an amount of cash sufficient to purchase such amount of BNB, the amount of which is equal to the combined
NAV of the number of Shares included in the Baskets being created determined as of 4:00 p.m. Eastern time on the day the order to create
Baskets is properly received. Baskets are only redeemed in exchange for delivery to the Trust of the amount of Shares represented by the
Basket. The Authorized Participants will deliver cash or BNB to create Shares and will receive cash or BNB when redeeming Shares. For
a redemption in cash, the Sponsor shall arrange for the BNB represented by the Basket to be sold to a Liquidity Provider selected by the
Sponsor and the cash proceeds distributed from the Trust’s account at the Cash Custodian to the Authorized Participant. The Liquidity
Providers as of the date of this Report, that have agreed to serve as a Liquidity Provider and have consented to be named in the Trust’s
registration statement are Nonco LLC and Wincent Investment Fund PCC Limited. Additional Liquidity Providers may be added at any time,
subject to the Sponsor’s sole discretion. For an “in-kind” subscription, Authorized Participants will deliver, or arrange
for the delivery by the Authorized Participant’s designee of, BNB to the Trust’s account with the BNB Custodians in exchange
for Shares when they purchase Shares. For an “in-kind” redemption transaction with the Trust, when Authorized Participants
redeem Shares, the Trust, through the BNB Custodians, will deliver BNB to such Authorized Participants, or a designee thereof, in exchange
for their Shares.

Authorized Participants

Authorized Participants are the only persons that
may place orders to create and redeem Baskets. Authorized Participants must be (1) registered broker-dealers or other securities market
participants, such as banks and other financial institutions, that are not required to register as broker-dealers to engage in securities
transactions described below and (2) DTC Participants. Registered broker-dealers are subject to various requirements of the federal securities
laws and rules, including financial responsibility rules such as the customer protection rule, the net capital rule and recordkeeping
requirements. On May 15, 2025, the SEC’s Division of Trading and Markets and FINRA’s Office of General Counsel withdrew their
2019 joint statement regarding broker-dealer custody of crypto asset securities, which was widely perceived as prohibiting broker-dealers
from offering custodial services for crypto assets that are not securities. Additionally, on the same day, the SEC released a set of Frequently
Asked Questions (FAQs) clarifying its views on broker-dealers’ crypto asset activities. The FAQs stated that (i) SEC Rule 15c3-3
applies only to crypto asset securities, and (ii) broker-dealers are permitted to facilitate in-kind creations and redemptions in connection
with spot crypto exchange-traded products.

To become an Authorized Participant, a person
must enter into an Authorized Participant Agreement with the Sponsor. The Authorized Participant Agreement provides the procedures for
the creation and redemption of Baskets and for the delivery, or facilitation of the delivery, of the BNB required for such creation and
redemptions. The Authorized Participant Agreement and the related procedures attached thereto may be amended by the Trust or the Sponsor
(as the case may be), without the consent of any Shareholder or Authorized Participant. Authorized Participants pay the Transfer Agent
a fee for each order they place to create or redeem one or more Baskets. The transaction fee may be reduced, increased or otherwise changed
by the Sponsor. Authorized Participants who make deposits (directly in the case of cash creations and, indirectly in the case of BNB deposits)
with the Trust in exchange for Baskets receive no fees, commissions or other form of compensation or inducement of any kind from either
the Trust or the Sponsor, and no such person has any obligation or responsibility to the Sponsor or the Trust to effect any sale or resale
of Shares.

Each Authorized Participant is required to be
registered as a broker-dealer under the Exchange Act and a member in good standing with FINRA, or exempt from being or otherwise not required
to be licensed as a broker-dealer or a member of FINRA, and qualified to act

10

as a broker or dealer in the states or other jurisdictions
where the nature of its business so requires. Certain Authorized Participants may also be regulated under federal and state banking laws
and regulations. Each Authorized Participant has its own set of rules and procedures, internal controls, and information barriers as it
determines is appropriate in light of its own regulatory regime.

The Trust engages in BNB transactions for converting
cash into BNB (in association with purchase orders) and BNB into cash (in association with redemption orders). The Trust conducts its
BNB purchase and sale transactions by trading directly with third parties selected by the Sponsor (each, a “Liquidity Provider”),
who are not registered broker-dealers, pursuant to written agreements between such Liquidity Providers and the Trust. Liquidity Providers
may be added at any time, subject to the discretion of the Sponsor. Alternatively, Liquidity Providers may choose to terminate their participation
as Liquidity Providers to the Trust at any time. The Trust is not aware of any other affiliation or material relationship between a Liquidity
Provider and the Authorized Participants or other service providers of the Trust in executing a transaction in BNB with the Trust. Each
Liquidity Provider represents to the Trust that it is acting for itself and not for another person, and is not acting as agent or at the
direction of any Authorized Participant. Upon receipt of an order from an Authorized Participant to create or redeem Baskets, the Trust
may obtain quotes for a price to purchase or sell BNB from one or more Liquidity Providers. A Liquidity Provider may respond to the Trust’s
request with an offer of a quote at which it is willing to sell the specified quantity of BNB, or a portion thereof, in the case of a
creation, or a quote at which it is willing to buy the specified quantity of BNB, or a portion thereof, in the case of a redemption, as
indicated in such offer. The Trust then determines, in its sole discretion, which Liquidity Provider that provided a quote to use. Once
an offer is accepted it becomes a trade that is binding on both the Trust and the Liquidity Provider. Each Liquidity Provider is required
to comply with U.S. federal and/or state laws including licensing and registration requirements or similar laws in non-U.S. jurisdictions
and maintain practices and policies designed to comply with AML and KYC regulations. The Liquidity Providers as of the date of this Report,
that have agreed to serve as a Liquidity Provider and have consented to be named in the Trust’s registration statement are Nonco
LLC and Wincent Investment Fund PCC Limited. Current or future Liquidity Providers may be affiliates of, or have material relationships
with, the Trust’s current or future Authorized Participants.

The following description of the procedures for
the creation and redemption of Baskets is only a summary and a Shareholder should refer to the relevant provisions of the Trust Agreement
and the form of Authorized Participant Agreement for more detail. The Trust Agreement and form of Authorized Participant Agreement are
incorporated by reference in this Report.

Authorized Participants will place orders through
the Transfer Agent. The Transfer Agent will coordinate with the Sponsor, who will in turn coordinate with the Trust’s BNB Custodian
in order to facilitate settlement of the Shares and BNB as described in more detail in the Creation Procedures and Redemption Procedures
sections below.

The trading prices of many digital assets, including
BNB, have experienced extreme volatility in recent periods and may continue to do so. Extreme volatility may persist and the value of
the Shares may significantly decline in the future without recovery. The digital asset markets may still be experiencing a bubble or may
experience a bubble again in the future. Extreme volatility in the future, including further declines in the trading prices of BNB, could
have a material adverse effect on the value of the Shares and the Shares could lose all or substantially all of their value. The Trust
is not actively managed and will not take any actions to take advantage, or mitigate the impacts, of volatility in the price of BNB.

In addition, the use of cash creations and redemptions
has transaction costs of buying and selling BNB. These costs include the bid-ask spread along with the operational costs from the labor
and overhead involved in calculating, executing, monitoring, and accounting for transactions in the BNB markets and related cash movements.
The Trust’s Authorized Participant Agreement provides that transaction costs and slippage related to Basket creation and redemption
are the responsibility of the Authorized Participant. Under ordinary circumstances, the Trust does not anticipate that there would be
fees or costs related to purchases and sales of BNB. To the extent there are unusual or unanticipated fees or costs associated with BNB
purchases and sales in connection with creation and redemption activity, the Sponsor would seek to pass these costs to the Liquidity Providers
or the Authorized Participants. If unable to do so, the Sponsor would treat these as extraordinary expenses and could decide to seek reimbursement
from the Trust to the extent the fees or expenses were paid by the Sponsor on the Trust’s behalf.

Creation Procedures

On any business day, an Authorized Participant
may place an order with the Transfer Agent to create one or more Baskets. Currently, creation orders are only accepted in cash or in-kind.
For purposes of processing creation and redemption orders, a “business day” means any day other than a day when the Exchange
is closed for regular trading (“Business Day”). Purchase orders must be placed by the order cut-off time for a purchase order
on a Business Day (the “Creation Order Cut-Off Time”). The Creation Order Cut-Off Time is 3:59:59 p.m. Eastern time on a trade
date or as otherwise communicated by the Sponsor. The day on which an order is received by the Transfer Agent is considered the purchase
order date.

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Prior to the delivery of Baskets for a purchase
order, the Authorized Participant must also have wired to the Transfer Agent the nonrefundable transaction fee due for the creation order
to offset the transfer and other transaction costs associated with the issuance of the Basket. Authorized Participants may not withdraw
a creation request. The manner by which creations are made is dictated by the terms of the Authorized Participant Agreement. By placing
a creation order, an Authorized Participant agrees to facilitate the deposit of cash with the Cash Custodian or BNB, with the BNB Custodians.
If an Authorized Participant fails to consummate the foregoing, the order will be cancelled.

For a cash creation, the total deposit of cash
required to create each Basket is an amount of cash that is in the same proportion to the total assets of the Trust, net of accrued expenses
and other liabilities, on the date the order to purchase is properly received, as the number of Shares to be created under the purchase
order is in proportion to the total number of Shares outstanding on the date the order is received. On the trade date for a purchase order
(the “Creation Trade Date”), following receipt of the purchase order from the Authorized Participant, the Trust shall, in
its sole discretion, select a Liquidity Provider and execute a trade to purchase BNB from that Liquidity Provider in the amount of the
Basket Deposit (the calculation of which is explained below), with the purchased BNB to be delivered by the Liquidity Provider on the
Creation Settlement Date in exchange for a cash price to be delivered by the Trust on Creation Settlement Date. The Liquidity Provider,
not the Authorized Participant, shall be responsible for delivering BNB to the Trust. The Authorized Participant shall be responsible
for delivering cash to the Trust.

For an in-kind creation, following an Authorized
Participant’s placement of a purchase order, the applicable BNB Account must be credited with the required
BNB by the end of the business day following the purchase order date, or in the case of cash deposits, the Trust’s Cash Custodian
account must be credited with the required cash by the end of the business day following the purchase order date, as applicable. If the
Authorized Participant or its designee fails to consummate the foregoing, the order shall be cancelled. Upon receipt of the BNB deposit
amount in the applicable BNB Account, in the case of in-kind creations, or the cash deposit amount in the Trust’s Cash
Custodian account, in the case of cash creations, the Trust will notify the Transfer Agent to release the shares to the Authorized Participant,
by directing DTC to credit the number of Shares created to the applicable DTC account.

No Shares will be issued unless and until the
BNB Custodians (in the case of in-kind deposits) or Cash Custodian (in the case of cash deposits) has informed the Transfer Agent that
the BNB or cash (as applicable) has been received. Disruption of services at the BNB Custodians would have the potential to delay settlement
of the BNB related to Share creations. To the extent a Liquidity Provider, is not able to deliver BNB associated with a cash purchase
order as of a specified time on the settlement date, the Authorized Participant will have the option to cancel the order, or the Sponsor
may select an alternative execution method for the BNB purchase. To the extent that BNB transfers in connection with a creation order
are delayed due to congestion or other issues with the BNB Smart Chain, such BNB will not be held in cold storage until such transfers
can occur.

BNB held in a BNB Account
is the property of the Trust and is not leased, or loaned under any circumstances.

Determination of Required Deposits

The Basket Cash Component changes from day to
day. To determine the Basket Cash Component, the Administrator starts by determining the number of BNB held by the Trust as of the opening
of business on that trade date, and subtracts the amount of BNB constituting estimated accrued but unpaid fees and expenses of the Trust
as of the opening of business on that trade date. For the purposes of the computation of the Basket Deposit, the BNB quantity is displayed
to the hundred millionth. Second, this figure, in BNB, is divided by the quotient of the number of Shares outstanding at the opening of
business on the trade date divided by 10,000. This produces the Basket Deposit, which is the number of BNB attributable to each Basket
as of the opening of business on the trade date. Third, the resulting BNB amount is then valued, in cash, at the Index calculated on the
trade date, or in accordance with the other valuation policies described in the Registration Statement if the Index is not available.
This produces the Basket Cash Component. The Basket Deposit, and the Basket Cash Component, so determined is communicated via electronic
mail message to all Authorized Participants, and made available on the Sponsor’s website for the Shares. The Exchange also publishes
the Basket Deposit determined by the Administrator as indicated above.

In the case of a cash creation only, by the end
of day Eastern time (or such other time as the parties may agree) on the trade date for a purchase order, the Administrator will calculate
and transmit the Required Cash Creation Total, consisting of (1) the Basket Cash Component, (2) Cash Amount, and (3) any Purchase Slippage,
to the Authorized Participant, which the Authorized Participant shall be responsible for delivering in cash on the settlement date for
a purchase order (which shall be the Business Day immediately following the trade date unless the Trust, Sponsor, and Authorized Participant
agree to a different date) (the “Creation Settlement Date”) to the Trust’s account at the Cash Custodian in cleared,
immediately available funds by 1:00 p.m. Eastern time. The Trust acknowledges that, if the actual cash purchase price of BNB from the
Liquidity Provider is below the Basket Cash Component, the Authorized Participant shall be entitled to retain the difference and the Required
Cash Creation Total shall be reduced accordingly.

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In the case of an in-kind creation only, by the
end of day Eastern Standard Time (or such other time as the parties may agree) on the Creation Trade Date, the Administrator will calculate
and transmit the Creation Basket Deposit to the Authorized Participant, which the Authorized Participant shall be responsible for delivering
in BNB on the Creation Settlement Date to the Trust’s custodian account.

Delivery of Required Deposits

For a cash creation, on the Creation Settlement
Date, the Authorized Participant who places a purchase order must follow the procedures outlined in the “Creation Procedures”
section of this Report. In the case of a cash creation only, the Trust shall instruct the Cash Custodian to transfer the cash proceeds
to the Trust’s Fiat Accounts. The Liquidity Provider delivers BNB to the Trust’s BNB Account in exchange for the cash purchase
price, a delivery facilitated by the BNB Custodians. Upon settlement by the BNB Custodians of the BNB purchase from the Liquidity Provider
and the deposit of BNB in the Trust’s BNB Account, the Trust shall instruct the Transfer Agent to release the Shares to the Authorized
Participant, and the Transfer Agent shall direct DTC to credit the number of Shares ordered to the applicable DTC account, by 1:00 p.m.
Eastern time on the Creation Settlement Date and the Creation Order shall be settled. If the BNB purchase transaction between the Trust
and the Liquidity Provider fails to settle, the Authorized Participant shall have the option to cancel the Creation Order, in which case
the Trust will return the Required Cash Creation Total less the Cash Amount to the Authorized Participant and the Shares will not be issued,
or the Sponsor may use an alternative execution method for the Trust to purchase BNB, in which case the Authorized Participant agrees
and acknowledges it is responsible for any Purchase Slippage and Cash Amount relating to such alternative execution method. The expense
and risk of delivery and ownership of cash until such cash has been received in immediately available, cleared federal funds by the Cash
Custodian on behalf of the Trust will be borne solely by the Authorized Participant.

For an in-kind creation, on the Creation Settlement
Date, the Authorized Participant or its designee shall deposit the amount of BNB specified in the Creation Basket Deposit in the applicable BNB Account by 1:00 p.m. Eastern time. Upon settlement by the BNB Custodians, the Trust shall instruct the Transfer
Agent to release the Shares to the Authorized Participant, and the Transfer Agent shall direct DTC to credit the number of Shares ordered
to the applicable DTC account, by close of business on the Creation Settlement Date and the Creation Order shall be settled. If the BNB
deposit transaction between the Trust and the Authorized Participant or its designee fails to settle, the Authorized Participant shall
have the option to cancel the Creation Order, in which case the Trust will return the Creation Basket Deposit to the Authorized Participant
and the Shares will not be issued, or the Sponsor may use an alternative execution method for the Trust to purchase BNB, in which case
the Authorized Participant agrees and acknowledges it is responsible for providing any Basket Cash Component, plus any Purchase Slippage
and Cash Amount, relating to such alternative execution method. The expense and risk of delivery and ownership of BNB until such BNB has
been credited to the applicable BNB Account by the applicable BNB Custodian on behalf of the Trust will be borne solely by the Authorized
Participant.

Rejection of Purchase Orders

The Sponsor or its designee has the absolute right,
but does not have any obligation, to reject any purchase order or Basket Deposit if the Sponsor determines that:

● the purchase order or Basket Deposit is not in
proper form;

● it would not be in the best interest of the Shareholders
of the Trust;

● the acceptance of the purchase order or the Basket
Deposit would have adverse tax consequences to the Trust or its Shareholders;

● the acceptance or receipt of the purchase order
or the Basket Deposit would, in the opinion of counsel to the Sponsor, be unlawful; or

● circumstances outside the control of the Trust,
the Sponsor, the Marketing Agent, or the BNB Custodians or Cash Custodian make it, for all practical purposes impracticable or not feasible
to process Baskets (including if the Sponsor determines that the investments available to the Trust at that time will not enable it to
meet its investment objective).

None of the Sponsor, the Transfer Agent, the BNB
Custodians or the Cash Custodian will be liable for the rejection of any purchase order or Basket Deposit.

Redemption Procedures

The procedures by which an Authorized Participant
can redeem one or more Baskets mirror the procedures for the creation of Baskets with an additional safeguard on BNB or cash being removed
from the Trust’s BNB Custodian or Cash Custodian account. Currently,

13

redemption orders are processed in cash or BNB.
On any business day, an Authorized Participant may place an order with the Transfer Agent to redeem one or more Baskets. Redemption orders
must be placed by the order cut-off time for an order on a Business Day (the “Redemption Order Cut-Off Time”). The Redemption
Order Cut-Off Time is 3:59:59 p.m. Eastern time on a trade date or as otherwise communicated by the Sponsor. A redemption order will be
effective on the date it is received by the Transfer Agent (“Redemption Order Date”).

For a cash redemption, on the trade date for a
Redemption Order (the “Redemption Trade Date”), the Trust in its sole discretion, shall select a Liquidity Provider and execute
a trade to sell the BNB in exchange for cash to be delivered on the settlement date for a Redemption Order (which shall be the Business
Day immediately following the Redemption Trade Date unless the Trust, Sponsor, and Authorized Participant agree to a different date) (the
“Redemption Settlement Date”). The Liquidity Providers as of the date of this Report, that have agreed to serve as a Liquidity
Provider and have consented to be named in the Trust’s registration statement are Nonco LLC and Wincent Investment Fund PCC Limited.
Additional Liquidity Providers may be added at any time, subject to the Sponsor’s sole discretion. The Redemption Settlement Date
shall be the immediately following Business Day after the Redemption Trade Date, unless the parties otherwise agree in writing. The Liquidity
Provider, not the Authorized Participant, shall be responsible for purchasing BNB from the Trust. By placing a Redemption Order, an Authorized
Participant agrees to facilitate the delivery of the Basket of Shares.

For an in-kind redemption, on the Redemption Trade
Date, the Trust shall instruct the BNB Custodians to deliver BNB to the Authorized Participant or its designee on the Redemption Settlement
Date. The Redemption Settlement Date, in the case of an in-kind redemption order, shall be the immediately following Business Day after
the Redemption Trade Date, unless the parties otherwise agree in writing. The Authorized Participant, or its designee, shall be responsible
for receiving BNB from the Trust in the case of an in-kind redemption order.

Once the Transfer Agent notifies the BNB Custodians
or Cash Custodian (as applicable), the Sponsor and the Administrator that the Shares have been received in the Trust’s DTC account,
the Administrator shall instruct the BNB Custodians or Cash Custodian (as applicable) to transfer the redemption BNB or cash amount from
the Trust’s BNB Custodian or Cash Custodian account to the Authorized Participant.

BNB held in a BNB Account
is the property of the Trust and is not leased or loaned under any circumstances.

Determination of Redemption Distribution

By 8:00 p.m. Eastern time (or such other time
as the parties may agree) on the Redemption Trade Date, in the case of a cash Redemption Order, the Administrator will calculate the Required
Cash Redemption Total that the Trust is responsible for delivering in cash on Redemption Settlement Date to the Authorized Participant’s
designated bank account. The Required Cash Redemption Total consists of (1) Basket Cash Component, minus (2) the Cash Amount, and minus
(3) any Redemption Slippage. The Trust acknowledges that, if the actual cash sale price realized from selling BNB to the Liquidity Provider
is above the Basket Cash Component, the Authorized Participant shall be entitled to retain the difference and the Required Cash Redemption
Total shall be increased accordingly.

By 8:00 p.m. Eastern Standard Time (or such other
time as the parties may agree) on Redemption Trade Date, in the case of an in-kind Redemption Order, the Administrator will calculate
the Creation Basket Deposit that the Trust is responsible for delivering in BNB on Redemption Settlement Date to the Authorized Participant’s
or its designee’s account at the applicable BNB Custodian.

Delivery of Redemption Distribution

On the Redemption Settlement Date, in the case
of a cash Redemption Order, the Liquidity Provider delivers cash to the Trust’s Fiat Accounts in exchange for BNB. Upon settlement
of the BNB sale by the Trust to the Liquidity Provider and the receipt of the Liquidity Provider’s cash in the Trust’s Fiat
Accounts, the Trust shall instruct the BNB Custodians to transfer the cash to the Trust’s Cash Custodian account. The Trust shall
then instruct the Transfer Agent to deliver the Authorized Participant’s Shares in the Basket Deposit back to the Trust, in exchange
for which the Trust shall instruct the Cash Custodian to transfer the Required Cash Redemption Total to the Authorized Participant’s
designated bank account and the Redemption Order shall be settled. If the BNB sale transaction between the Trust and the Liquidity Provider
fails to settle, the Authorized Participant shall have the option to cancel the Redemption Order, in which case the Trust will retain
its BNB and the Authorized Participant will retain the associated Shares and will not receive any cash, or the Sponsor may use an alternative
execution method for the Trust to sell BNB, in which case the Authorized Participant agrees and acknowledges it is responsible for any
Redemption Slippage and Cash Amount relating to such alternative execution method. If the Trust’s DTC account has not been credited
with all of the Baskets to be redeemed by such time, the redemption distribution will also be delayed.

On the Redemption Settlement Date, in the case
of an in-kind Redemption Order, the Trust shall instruct the Transfer Agent to deliver the Authorized Participant’s Shares in the
Creation Basket Deposit back to the Trust, in exchange for which the Trust shall instruct the

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BNB Custodians to transfer the BNB in the Creation
Basket Deposit to the Authorized Participant’s or its designee’s account at the applicable BNB Custodian and the Redemption Order shall
be settled. The Trust shall have no obligation to instruct the BNB Custodians to transfer BNB to the Authorized Participant or its designee
unless and until the Trust’s DTC account has been credited with all of the Shares relating to the Creation Baskets to be redeemed.
If the BNB transfer between the Trust’s BNB Accounts and the Authorized Participant’s or its designee’s BNB
Custodian account fails to settle, the Authorized Participant shall have the option to cancel the Redemption Order, in which case the
Trust will retain its BNB and the Authorized Participant will retain the associated Shares and will not receive any BNB, or the Sponsor
may use an alternative execution method for the Trust to sell BNB, in which case the Authorized Participant will receive cash, and the
Authorized Participant agrees and acknowledges it is responsible for any Redemption Slippage and Cash Amount relating to such alternative
execution method.

Suspension or Rejection of Redemption Orders

The Sponsor may, in its discretion, suspend the
right of redemption, or postpone the redemption settlement date (1) for any period during which the Exchange is closed other than customary
weekend or holiday closings, or trading on the Exchange is suspended or restricted, (2) for any period during which an emergency exists
as a result of which delivery, disposal or evaluation of BNB is not reasonably practicable, or (3) for such other period as the Sponsor
determines to be necessary for the protection of the Shareholders. For example, the Sponsor may determine that it is necessary to suspend
redemptions to allow for the orderly liquidation of the Trust’s assets. If the Sponsor has difficulty liquidating the Trust’s
positions, e.g., because of a market disruption event, it may be appropriate to suspend redemptions until such time as such circumstances
are rectified. If any of these events occurs at a time when an Authorized Participant intends to redeem Shares, and the price of BNB decreases
before such Authorized Participant is able to complete such redemption order, such Authorized Participant may sustain a loss with respect
to the amount that it would have been able to obtain in exchange for the BNB received from the Trust upon the redemption of its Shares,
had the redemption taken place when such Authorized Participant originally intended it to occur. As a consequence, Authorized Participants
may reduce their trading in Shares during periods of suspension, decreasing the number of potential buyers of Shares in the secondary
market and, therefore, decreasing the price a Shareholder may receive upon sale. None of the Sponsor, the person authorized to take redemption
orders in the manner provided in the Authorized Participant Agreement, the Cash Custodian or the BNB Custodians will be liable to any
person or in any way for any loss or damages that may result from any such suspension or postponement. To the extent that the Sponsor
suspends the right of redemption, the Trust will notify Shareholders in a prospectus supplement and a current report on Form 8-K or in
its annual or quarterly reports.

Redemption orders must be made in whole Baskets.
The Sponsor acting by itself or through the person authorized to take redemption orders in the manner provided in the Authorized Participant
Agreement may, in its sole discretion, reject any redemption order (1) the Sponsor determines not to be in proper form, (2) the fulfillment
of which its counsel advises may be illegal under applicable laws and regulations, or (3) if circumstances outside the control of the
Sponsor, the person authorized to take redemption orders in the manner provided in the Authorized Participant Agreement or the BNB Custodians
make it for all practical purposes not feasible for the Shares to be delivered under the redemption order. The Sponsor may also reject
a redemption order if the number of Shares being redeemed would reduce the remaining outstanding Shares to 10,000 Shares (i.e., 1 Basket)
or less.

The Marketing Agent shall notify the Authorized
Participant of a rejection or suspension of any redemption order. The Marketing Agent is under no duty, however, to give notification
of any specific defects or irregularities nor shall the Marketing Agent or the Trust incur any liability for the failure to give any such
notification. The Trust and the Marketing Agent may not revoke a previously accepted redemption order.

Creation and Redemption Transaction Fee

To compensate the Transfer Agent for expenses
incurred in connection with the creation and redemption of Baskets, an Authorized Participant is required to pay a transaction fee to
the Transfer Agent to create or redeem Baskets, which does not vary in accordance with number of Baskets in such order. The transaction
fee may be reduced, increased or otherwise changed by the Sponsor. The Sponsor will notify DTC of any change in the transaction fee and
will not implement any increase in the fee for the redemption of baskets until thirty (30) days after the date of notice.

Liability of Authorized Participants for Taxes
and Other Governmental Charges

An Authorized Participant shall be responsible
for any transfer tax, sales or use tax, recording tax, value added tax or similar tax or governmental charge applicable to the creation
or redemption of Creation Baskets (and the transfer of BNB in connection therewith), regardless of whether or not such tax or charge is
imposed directly on the Authorized Participant. The applicable Authorized Participant agrees to indemnify the Sponsor. the Trustee and
the Trust if any of them is required by law to pay any such tax, charge or fee, together with any applicable penalties, additions to tax
and interest thereon.

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Certain United States Federal Income Tax Consequences

The following is a discussion of the material
U.S. federal income tax consequences that generally will apply to the purchase, ownership, and disposition of Shares by a U.S. Shareholder
(as defined below). The discussion below is based on the Internal Revenue Code of 1986, as amended (the “Code”), Treasury
Regulations promulgated thereunder and judicial and administrative interpretations of the Code, all as in effect on the date of this Report
and all of which are subject to change either prospectively or retroactively. The tax treatment of Shareholders may vary depending upon
their own particular circumstances. Certain Shareholders (including but not limited to banks, financial institutions, insurance companies,
regulated investment companies, real estate investment trusts, tax-exempt organizations, tax-exempt or tax-advantaged retirement plans
or accounts, non-U.S. persons, brokers or dealers, traders, entities that are partnerships or S-corporations for U.S. federal income tax
purposes, persons holding Shares as a position in a “hedging,” “straddle,” “conversion,” “constructive
sale” or other integrated transaction for U.S. federal income tax purposes, persons whose “functional currency” is not
the U.S. dollar, persons subject to the federal alternative minimum tax, persons required for U.S. federal income tax purposes to accelerate
the recognition of any item of gross income with respect to the Shares as a result of such income being recognized on an applicable financial
statement, or other investors with special circumstances) may be subject to special rules not discussed below. In addition, the following
discussion applies only to investors who will hold Shares as “capital assets” (generally, property held for investment). Moreover,
the discussion below does not address the effect of any state, local or foreign tax law consequences (or any consequences under any U.S.
federal tax law other than U.S. federal income tax law) that may apply to an investment in Shares. Purchasers of Shares are urged to consult
their own tax advisers with respect to all U.S. federal, state, local and foreign tax law considerations potentially applicable to their
investment in Shares.

For purposes of this discussion, a “U.S.
Shareholder” is a Shareholder that is:

● an individual who is treated as a citizen or
resident of the United States for U.S. federal income tax purposes;

● a corporation (or entity treated as a corporation
for U.S. federal income tax purposes) created or organized in or under the laws of the United States, any state thereof or the District
of Columbia;

● an estate, the income of which is includible
in gross income for U.S. federal income tax purposes regardless of its source; or

● a trust, if a court within the United States
is able to exercise primary supervision over the administration of the trust and one or more United States persons have the authority
to control all substantial decisions of the trust.

If a partnership or other entity or arrangement
treated as a partnership for U.S. federal income tax purposes holds Shares, the tax treatment of a partner generally depends upon the
status of the partner and the activities of the partnership. If you are a partner of a partnership holding Shares, the discussion below
may not be applicable and we urge you to consult your own tax adviser for the U.S. federal income tax implications of the purchase, ownership
and disposition of such Shares.

Taxation of the Trust

The Sponsor and the Trustee will treat the Trust
as a “grantor trust” for U.S. federal income tax purposes. As a grantor trust, the Trust can undertake only certain types
of activities. For example, generally, the Trust cannot vary its investment portfolio to take advantage of market fluctuations. The Trust
intends to operate so that it will qualify to be treated as a grantor trust for U.S. federal income tax purposes. Neither the Sponsor
nor the Trustee will request a ruling from the IRS with respect to the classification of the Trust for U.S. federal income tax purposes
or with respect to any other matter.

If the IRS were to successfully assert that the
Trust is not classified as a “grantor trust,” the Trust would likely be classified as either a partnership for U.S. federal
income tax purposes, which may affect the timing and/or other tax consequences to the Shareholders, or as a publicly traded partnership
that would be taxable as a corporation for U.S. federal income tax purposes, in which case the Trust would be taxed in the same manner
as a corporation on its taxable income and distributions to Shareholders out of the earnings and profits of the Trust would be taxed to
Shareholders as ordinary dividend income. Except as otherwise indicated, the remainder of this discussion assumes that the Trust is classified
as a grantor trust for U.S. federal income tax purposes.

Taxation of U.S. Shareholders

Each Shareholder will be treated, for U.S. federal
income tax purposes, as if it directly owned a pro rata share of the underlying assets held in the Trust. A Shareholder also will be treated
as if it directly received its respective pro rata share of the Trust’s income, if any, and as if it directly incurred its respective
pro rata share of the Trust’s expenses. In the case of a Shareholder that purchases Shares for cash, its initial tax basis in its
pro rata share of the assets held in the Trust at the time it acquires its Shares will be equal to its cost of acquiring the Shares. In
the case of a Shareholder that acquires its Shares as part of the creation of a Basket, the delivery of BNB to the Trust in exchange for
a pro rata share of the underlying BNB represented by the Shares will not be a taxable event to the Shareholder, and the Shareholder’s
tax basis and holding period for the Shareholder’s pro rata share of the BNB held in the Trust will be the same as its tax basis
and holding period for the BNB delivered in exchange therefor. For purposes of this discussion, and unless stated otherwise, it is assumed
that all of a Shareholder’s Shares are acquired on the same date and at the same price per Share. Shareholders that hold

16

multiple lots of Shares, or that are contemplating
acquiring multiple lots of Shares, should consult their own tax advisers as to the determination of the tax basis and holding period for
the underlying BNB related to such Shares.

Current IRS guidance on the treatment of convertible
virtual currencies classifies BNB as “property” that is not currency for U.S. federal income tax purposes and clarifies that
BNB can be held as a capital asset, but it does not address several other aspects of the U.S. federal income tax treatment of BNB. Because
BNB is a new technological innovation, the U.S. federal income tax treatment of BNB or transactions relating to investments in BNB may
evolve and change from those discussed below, possibly with retroactive effect. In this regard, the IRS has indicated that it has made
it a priority to issue additional guidance related to the taxation of virtual currency transactions, such as transactions involving BNB.
In addition, the IRS and U.S. Treasury Department have issued regulations regarding the tax information reporting obligations and tax
basis for certain digital asset transactions, as well as a safe harbor for certain investment trusts staking digital currencies. While
the U.S. federal government has started to issue such additional guidance, whether any future guidance will adversely affect the U.S.
federal income tax treatment of an investment in BNB or in transactions relating to investments in BNB is unknown. Moreover, future developments
that may arise with respect to digital currencies may increase the uncertainty with respect to the treatment of digital currencies for
U.S. federal income tax purposes. This discussion assumes that any BNB the Trust may hold is properly treated for U.S. federal income
tax purposes as property that may be held as a capital asset and is not currency for purposes of the provisions of the Code relating to
foreign currency gain and loss.

The Trust may use BNB to pay certain expenses
of the Trust, which under current IRS guidance will be treated as a sale of such BNB, and it may sell BNB to distribute cash to Authorized
Participants redeeming Shares and to pay certain expenses. If the Trust sells BNB (for example to generate cash to pay fees or expenses)
or is treated as selling BNB (for example by using BNB to pay fees or expenses), a Shareholder will recognize gain or loss in an amount
equal to the difference between (a) the Shareholder’s pro rata share of the amount realized by the Trust upon the sale and (b) the
Shareholder’s tax basis for its pro rata share of the BNB that was sold. A Shareholder’s tax basis for its share of any BNB
sold by the Trust should generally be determined by multiplying the Shareholder’s total basis for its share of all of the BNB held
in the Trust immediately prior to the sale, by a fraction the numerator of which is the amount of BNB sold, and the denominator of which
is the total amount of the BNB held in the Trust immediately prior to the sale. After any such sale, a Shareholder’s tax basis for
its pro rata share of the BNB remaining in the Trust should be equal to its tax basis for its share of the total amount of the BNB held
in the Trust immediately prior to the sale, less the portion of such basis allocable to its share of the BNB that was sold or treated
as sold.

Upon a Shareholder’s sale of some or all
of its Shares (other than a redemption), the Shareholder will be treated as having sold its pro rata share of the BNB held in the Trust
at the time of the sale that is attributable to the Shares sold. Accordingly, the Shareholder generally will recognize gain or loss on
the sale in an amount equal to the difference between (a) the amount realized pursuant to the sale of the Shares and (b) the Shareholder’s
tax basis for its pro rata share of the BNB held in the Trust at the time of sale that is attributable to the Shares sold, as determined
in the manner described in the preceding paragraph. Based on current IRS guidance, such gain or loss (as well as any gain or loss realized
by a Shareholder on account of the Trust selling BNB) will generally be long-term or short-term capital gain or loss, depending upon whether
the Shareholder has a holding period of greater than one year in its pro rata share of the BNB that was sold. The Trust’s sales
of BNB to fund cash redemptions are expected to result in gains or losses with such gains or losses expected to be treated as incurred
by the Shareholder that is being redeemed. These gains or losses generally would equal the difference between (a) the amount realized
from the sale of the BNB and (b) the Shareholder’s tax basis for the Shareholder’s pro rata share of the BNB held in the Trust
that is sold to fund the redemption, as determined in the manner described above. A redemption of some or all of a Shareholder’s
Shares in exchange for the cash received from such sale is not expected to be treated as a separate taxable event for the Shareholder.

An in-kind redemption of some or all of a Shareholder’s
Shares in exchange for the underlying BNB represented by the Shares redeemed generally will not be a taxable event to the Shareholder.
The Shareholder’s tax basis and holding period for the BNB received in the in-kind redemption generally will be the same as the
Shareholder’s tax basis and holding period for its pro rata share of the BNB held in the Trust immediately prior to the in-kind
redemption that is attributable to the Shares redeemed. The Shareholder’s holding period for the BNB received generally will include
the period during which the Shareholder held the Shares redeemed in-kind. A subsequent sale of the BNB received by the Shareholder generally
will be a taxable event.

After any sale or redemption of less than all
of a Shareholder’s Shares, the Shareholder’s tax basis for its pro rata share of the BNB held in the Trust immediately after
such sale or redemption generally will be equal to its tax basis in its share of the total amount of the BNB held in the Trust immediately
prior to the sale or redemption, less the portion of such basis which is taken into account in determining the amount of gain or loss
recognized by the Shareholder upon such sale or cash redemption or, in the case of an in-kind redemption, that is treated as the basis
of the BNB received by the Shareholder in the redemption.

As noted above, the Trust does not currently stake
any of its BNB; however, the Sponsor may, in the future, engage one or more Staking Services Providers to conduct Staking Activities,
in which case the Trust could receive staking rewards. Any BNB acquired by the Trust as staking rewards for Staking Activities would be
treated as giving rise to ordinary taxable income. Additionally, such BNB will have

17

a separate tax basis and holding period. It is
likely that a Shareholder will have a tax basis for its share of any BNB acquired by the Trust as staking rewards equal to the amount
of income that it recognizes and the Shareholder’s holding period for such BNB will begin as of the time it recognizes such income.

If a hard fork occurs in the BNB Smart Chain,
the Trust could become entitled to units of both the original BNB and an alternative new digital asset. Under current IRS guidance, if
a hard fork or other distribution of digital assets (including as so-called “airdrop”) results in a taxpayer receiving units
of a new cryptocurrency over which the taxpayer has dominion and control, the taxpayer will recognize ordinary income equal to the fair
market value of such units at the time dominion and control is obtained. The Trust Agreement stipulates that if a fork occurs, the Sponsor
shall determine which asset constitutes BNB and which network constitutes the alternative new digital asset, or Incidental Right or IR
Virtual Currency. Additionally, the Sponsor has committed to cause the Trust to irrevocably abandon any Incidental Rights and IR Virtual
Currency to which the Trust may become entitled in the future. However, there can be no assurance that these abandonments would be treated
as effective for U.S. federal income tax purposes, or that the Sponsor will continue to cause the Trust to irrevocably abandon any Incidental
Rights and IR Virtual Currency if there are future regulatory developments that would make it feasible for the Trust to retain those assets.
If the Trust were treated as receiving the Incidental Rights or IR Virtual Currency, Shareholders may incur federal, state, and/or local,
or non-U.S. tax liability.

3.8% Medicare Tax on Net Investment Income

Certain U.S. Shareholders who are individuals
are required to pay a 3.8% Medicare tax on the lesser of the excess of their modified adjusted gross income over a threshold amount ($250,000
for married persons filing jointly and $200,000 for single taxpayers) or their “net investment income,” which generally includes
capital gains from the disposition of property and may include income from staking rewards from Staking Activities and other income. This
tax is in addition to any capital gains taxes due on such investment income. A similar tax applies to estates and trusts. U.S. Shareholders
should consult their own tax advisers regarding the effect, if any, this tax may have on their investment in the Shares.

Brokerage Fees and Trust Expenses

Any brokerage or other transaction fee incurred
by a Shareholder in purchasing Shares will be treated as part of the Shareholder’s tax basis in the underlying assets of the Trust.
Similarly, any brokerage fee incurred by a Shareholder in selling Shares will reduce the amount realized by the Shareholder with respect
to the sale.

Shareholders will be required to recognize the
full amount of gain or loss upon a sale or deemed sale of BNB by the Trust (as discussed above), even though some or all of the proceeds
of such sale are used by the Trustee to pay Trust expenses. Shareholders may deduct their respective pro rata shares of each expense incurred
by the Trust to the same extent as if they directly incurred the expense. Shareholders who are individuals, estates or trusts, however,
may be required to treat some or all of the expenses of the Trust as miscellaneous itemized deductions, which are nondeductible.

In addition, deductions may be subject to phase
outs and other limitations under applicable provisions of the Code.

Investment by Certain Retirement Plans

Individual retirement accounts (“IRAs”)
and participant-directed accounts under tax-qualified retirement plans are limited in the types of investments they may make under the
Code. Potential purchasers of Shares that are IRAs or participant-directed accounts under a Code section 401(a) plan should consult with
their own tax advisors as to the tax consequences of a purchase of Shares.

United States Information Reporting and Backup
Withholding

The Trustee will file certain information returns
with the IRS, and provide certain tax-related information to Shareholders, in connection with the Trust. To the extent required by applicable
regulations, each Shareholder will be provided with information regarding its portion of the Trust’s annual income, expenses, gains
and losses (if any). A U.S. Shareholder generally may be subject to United States backup withholding tax in certain circumstances unless
it provides its taxpayer identification number and complies with certain certification procedures. Shareholders may be required to meet
certain information reporting or certification requirements imposed by the Foreign Account Tax Compliance Act, in order to avoid certain
information reporting and withholding tax requirements.

The amount of any backup withholding will be allowed
as a credit against a Shareholder’s U.S. federal income tax liability and may entitle the Shareholder to a refund, provided that
the required information is furnished to the IRS in a timely manner.

Individual U.S. Shareholders will be required
to report on their federal income tax return the receipt, acquisition, sale, or exchange of any financial interest in virtual currency,
which includes a Shareholder’s interest in BNB held by the Trust.

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Taxation in Jurisdictions Other Than the United
States

Purchasers of Shares that are based in or acting
out of a jurisdiction other than the United States are advised to consult their own tax advisers as to the tax consequences under the
laws of such jurisdiction (or any other jurisdiction other than the United States in which they are subject to taxation) of their purchase,
holding, sale and redemption of or any other dealing in Shares and, in particular, as to whether any value added tax, other consumption
tax or transfer tax is payable in relation to such purchase, holding, sale, redemption or other dealing.

The foregoing
is only a general summary of the material U.S. federal income tax consequences associated with the purchase, ownership and disposition
of Shares by a U.S. Shareholder. EACH SHAREHOLDER IS URGED TO CONSULT ITS OWN TAX ADVISER concerning the U.S. federal, state, local, and
non-U.S. tax considerations BEFORE DECIDING WHETHER TO INVEST IN THE SHARES OF THE TRUST.

ERISA and Related Considerations

The Employee Retirement Income Security Act of
1974 (“ERISA”) and/or Section 4975 of the Code impose certain requirements on: (i) employee benefit plans and certain other
plans and arrangements, including individual retirement accounts and annuities, Keogh plans and certain collective investment funds or
insurance company general or separate accounts in which such plans or arrangements are invested, that are subject to Title I of ERISA
and/or Section 4975 of the Code (collectively, “Plans”); and (ii) persons who are fiduciaries with respect to the investment
of assets treated as “plan assets” within the meaning of U.S. Department of Labor (the “DOL”) regulation 29 C.F.R.
§ 2510.3-101, as modified by Section 3(42) of ERISA, of a Plan. Investments by Plans are subject to the fiduciary requirements and
the applicability of prohibited transaction restrictions under ERISA and the Code.

“Governmental plans” within the meaning
of Section 3(32) of ERISA, certain “church plans” within the meaning of Section 3(33) of ERISA and “non-U.S. plans”
described in Section 4(b)(4) of ERISA, while not subject to the fiduciary responsibility and prohibited transaction provisions of Title
I of ERISA or Section 4975 of the Code, may be subject to any federal, state, local, non-U.S., or other law or regulation that is substantially
similar to the foregoing provisions of ERISA and the Code. Fiduciaries of any such plans are advised to consult with their counsel prior
to an investment in the Shares.

In contemplating an investment of a portion of
Plan assets in the Shares, the Plan fiduciary responsible for making such investment should carefully consider, taking into account the
facts and circumstances of the Plan, the “Risk Factors” discussed above and whether such investment is consistent with its
fiduciary responsibilities. The Plan fiduciary should consider, among other issues, whether: (1) the fiduciary has the authority to make
the investment under the appropriate governing plan instrument; (2) the investment would constitute a direct or indirect non-exempt prohibited
transaction with a “party in interest” or “disqualified person” within the meaning of ERISA and Section 4975 of
the Code respectively; (3) the investment is in accordance with the Plan’s funding objectives; and (4) such investment is appropriate
for the Plan under the general fiduciary standards of investment prudence and diversification, taking into account the overall investment
policy of the Plan, the composition of the Plan’s investment portfolio and the Plan’s need for sufficient liquidity to pay
benefits when due. When evaluating the prudence of an investment in the Shares, the Plan fiduciary should consider the DOL’s regulation
on investment duties, which can be found at 29 C.F.R. § 2550.404a-1.

It is intended that: (a) none of the Sponsor,
the Trustee, the BNB Custodians, the Cash Custodian or any of their respective affiliates (the “Transaction Parties”) has
through this report and related materials provided any investment advice within the meaning of Section 3(21) of ERISA to the Plan in connection
with the decision to purchase or acquire such Shares; and (b) the information provided in this report and related materials will not make
a Transaction Party a fiduciary to the Plan.

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