XBT Provider AB – Forking Policy In Light of Upcoming Ethereum Forking Event
STOCKHOLM, JAN 4, 2019 — XBT Provider AB (Publ) (the “Issuer”) is conscious of the fact that there are currently a number of potential, ‘forking-related’ events which may occur on the Ethereum blockchain in the next 14 days. These events may affect the native asset, ether; the asset which two of XBT Issuer’s products track (Ether Tracker One and Ether Tracker Euro (collectively the “Certificates”)).
The Issuer wishes to clarify that its Certificates are designed to track “ether” and not any alternative coin which results from a forking event and shared a common transaction history prior to the fork. Therefore, in the case of a fork, the Certificates will be referenced to the coin which the Ethereum community and exchanges define, and consider to be, “ether.” (As the holder of ether, the group companies of the Guarantor will be entitled to hold both coins resulting from any fork).
The Issuer wishes to emphasise from its earlier Press Releases concerning the phenomenon of 'forking’ that:
• the circumstances, technical construction and ideology represented by each fork are unique;
• the prevailing market-conditions at the time of, and following, each fork are unique;
• the relative significance of each fork varies;
• it is possible that a particular fork may result in a significant disruption to the underlying asset and, potentially, may result in a market disruption event should pricing become problematic following the fork; and
• it is not possible to predict with accuracy the impact which any anticipated fork could have or for how long any resulting disruption may exist.
If Ethereum were to experience a significant fork or forks in the coming weeks, the Issuer wishes to reiterate that it will follow its established process, as initially described in the March 9, 2018 release found here and summarized below.
In accordance with the Prospectus, the Issuer has no legal obligation to distribute forked coins to Certificate holders; however, the Issuer wishes to return the value creation to Certificate holders where possible. Accordingly, the Issuer’s forking distribution plan operates as follows:
- Forks eligible for the plan will be selected according to the available information of each separate fork, at the Issuer's discretion.
- The proceeds of any eligible forks will be distributed to Certificate holders bi-annually.
- Critically, the Issuer will provide a corporate action date, in which Certificate holders in possession of the Certificates (as of the corporate action date) will be eligible to receive a cash distribution accumulated by forks during the preceding half-year period.
- Only owners of Certificates, by Euroclear definition, will be paid and they will distribute to their underlying clients, sometimes multiple levels.
- Once owners of Certificates are paid, the Issuer no longer has any responsibility for the good execution of any onward or further distribution.