Summary of Franklin Ethereum Trust

Overview

• Type: Publicly traded investment fund (ETF)
• Issuer: Franklin Ethereum Trust, formed as a Delaware statutory trust
• Listing: Traded on Cboe BZX Exchange under the ticker symbol EZET
• Objective: To reflect the performance of the price of ether (ETH)
• Size: As of June 3, 2025, there are 1,700,000 Shares outstanding

Business Model & Operations

• The Trust offers a passive investment vehicle designed to track the price of ether, without active management or leverage.
• It provides investors with a cost-effective way to gain exposure to ether via securities markets, avoiding complexities of direct digital asset custody and trading.
• The Trust creates and redeems Shares only in Creation Units of 50,000 Shares, through authorized broker-dealer participants.
• Assets: Primarily consists of ether held by the Ether Custodian ( Coinbase Custody Trust Company, LLC ) and cash reserves.
• The Trust does not hold or trade in futures or commodity derivatives.
• The Trust’s management include:
  • Sponsor: Franklin Holdings, LLC (a Delaware LLC, with Franklin Resources, Inc. as the parent)
  • Administrator & Custodians: The Bank of New York Mellon and Coinbase Custody Trust Company, LLC.
  • Market & Distribution: Franklin Distributors, LLC (affiliate of the Sponsor) handles marketing.
• No officers or employees are part of the Trust itself.

Investment Operations

• The fund aims to approximate the performance of ether prior to expenses.
• Ether Valuation: Based on the CF Benchmarks Index, calculated daily at 4:00 PM ET. If unavailable, the Fund’s holdings may be fair valued by the Sponsor.
• The fund will sell ether to pay fees and expenses, which decreases the amount of ether per Share.
• Ether transactions are conducted via direct trading with third parties or through the Prime Broker, with custody in cold storage.
• Creation and Redemption: Investors (Authorized Participants) deposit or receive ether or cash, with the process designed to prevent market disruptions.
• The fund relies on its authorized participants for liquidity; as of March 31, 2025, major authorized participants include Jane Street Capital, LLC, J.P. Morgan Securities LLC, Virtu Americas LLC, Citadel Securities LLC, and Goldman Sachs & Co. LLC.
• The fund creates/redeems shares in exchange for ether or cash, with specific procedures and fees.

Fees & Expenses

• Sponsor fee: 0.19% annually, accrued daily and paid quarterly.
• The Sponsor also pays certain organizational, legal, and initial offering costs.
• The fund sells ether to cover fees and expenses not assumed by the Sponsor, which can reduce ether holdings per Share and impact NAV.

Risk Management

• The trust is a grantor trust for U.S. tax purposes.
• The fund does not participate in staking or earn staking rewards.
• Risks include extreme volatility of ether, regulatory uncertainty, technological risks related to Ethereum blockchain, potential hard forks, smart contract vulnerabilities, and market manipulation.

Key Points

• Number of Shares Outstanding: 1.7 million as of June 3, 2025.
• Market Cap (as of September 30, 2024): Approximately $27.6 million, based on last reported sales price.
• Customer base: Not explicitly specified; employs authorized participants to facilitate creation/redemption.
• Employees / Management: The Trust itself has no officers, officers are part of the Sponsor or service providers.

Note: This summary only includes specific operational and business details explicitly provided; it does not contain hypothetical or speculative information.