Franklin Ethereum Trust

The Franklin Ethereum Trust

Overview

• Legal form: Delaware statutory trust
• Formation dates: Formed February 8, 2024; Amended and Restated Declaration of Trust dated May 30, 2024
• Primary vehicle: Single series, the Franklin Ethereum ETF (the “Fund”)
• Shares: Common units of beneficial interest listed on the Cboe BZX Exchange under ticker EZET
• Investment objective: To reflect, generally, the price of ether (ETH) before payment of Fund expenses and liabilities; the Fund is passive and non-leveraged
• Share nature: Shares are not an obligation of or guaranteed by the Sponsor and do not constitute a direct investment in ether

What the Fund does

• Provides investment exposure designed to track the price of ether through exchange-traded Shares
• Passive management; the Sponsor does not actively manage ether holdings
• Holdings primarily consist of ether held by the Ether Custodian and cash
• Creation and redemption occur only in Creation Units (50,000 Shares); creations/redemptions are cash-based (no in-kind ether transfers)

Management and service providers

• Sponsor: Franklin Holdings, LLC
• Administrator, Transfer Agent, and Cash Custodian: The Bank of New York Mellon (BNYM)
• Ether Custodian: Coinbase Custody Trust Company, LLC
• Trustee: CSC Delaware Trust Company
• Prime Broker: Coinbase Inc. (affiliate of the Ether Custodian)
• Marketing Agent: Franklin Distributors, LLC
• Authorized Participants (as of March 31, 2026):
  • Jane Street Capital, LLC
  • J.P. Morgan Securities LLC
  • Virtu Americas LLC
  • Citadel Securities LLC
  • Goldman Sachs & Co. LLC

Creation and redemption

• Creation Unit size: 50,000 Shares (and multiples)
• Only Authorized Participants may create or redeem Creation Units
• Purchases/sales of ether for creation/redemption are conducted via ether trading counterparties or through the Prime Broker
• Order cutoffs: Purchase/redemption orders due by 2:00 p.m. ET (or close of trading, whichever is earlier)
• Settlement: Generally T+1 for creations and redemptions
• Fees: Creation/redemption transaction fees and Custody Transaction Costs apply to the Authorized Participant
• Trade financing: The Fund or Authorized Participants may use Trade Credits from a Trade Credit Lender to facilitate on-trade funding; financing fees are embedded in trade costs

Holdings and custody structure

• Ether Custodian: Coinbase Custody; ether held in Vault Balance (cold storage) with private keys in cold storage
• Trading Balance: Ether and cash temporarily held with the Prime Broker to support creation/redemption activities; transfers occur between Trading Balance and Vault Balance (off-chain vs on-chain)
• Prime Broker may route orders through Connected Trading Venues
• Cash custodian: Bank of New York Mellon

NAV and valuation

• Index: The CF Benchmarks Index calculates the USD price of ether as of 4:00 p.m. ET using a 3:00–4:00 p.m. ET observation window and multiple Constituent Platforms (as of 3/31/2026: Bitstamp, Kraken, itBit, Gemini, Coinbase, LMAX Digital, Crypto.com, Bullish Exchange, among others)
• NAV determination: The Sponsor has exclusive authority to determine NAV; the Administrator calculates NAV each Business Day after 4:00 p.m. ET using the Index price
• Fair value: If the CF Benchmarks Index is unavailable or the Sponsor deems it unreliable, the Sponsor may fair value the Fund’s holdings
• Secondary pricing: A Secondary Index may be used as a pricing source in certain circumstances

Fees and expenses

• Sponsor’s unitary fee: 0.19% per year of the Fund’s NAV
• The Sponsor covers ordinary Fund expenses (administrator, marketing, custodians, listing fees, etc.) up to a specified cap
• Ordinary legal fees: Up to $500,000 per year borne by the Sponsor
• The Fund bears transaction costs (ether network fees, etc.) for ether sales to cover expenses not assumed by the Sponsor; these costs affect NAV
• Fees accrued for the fiscal year ended March 31, 2026: $108,260
• Extraordinary expenses are borne by the Fund if incurred
• Organization and initial offering costs were borne by the Sponsor
• The Fund sells ether as needed to pay the Sponsor’s fee

Special risks and features

• The Fund holds only ether and cash; it does not use leverage, futures, or other derivatives
• The Fund is not registered under the Investment Company Act and is not a commodity pool under the CEA
• Creation and redemption depend on third-party counterparties; disruption could affect liquidity
• The Sponsor has discretion over valuation methods; valuation decisions can affect NAV
• The CF Benchmarks Index has a limited performance history; inputs may be subject to errors or manipulation
• Governance and forks: The Sponsor determines which network constitutes “ether” for Fund purposes in the event of forks
• Regulatory and political risk: Regulatory developments affecting digital assets could impact ether’s value or Fund operations
• Operational and cyber risk: Custodian and Prime Broker exposures, potential for loss if counterparties fail; insurance limitations may apply
• Cash-based creations/redemptions can affect arbitrage efficiency and may cause Shares to trade at premiums or discounts to NAV
• Concentration risk: The Fund concentrates exposure in ether
• Emerging growth company: The Fund is an “emerging growth company” and may claim certain reporting exemptions

Organizational notes

• The Trust and Fund have no officers, directors, or employees
• The Trust maintains a public website with Fund information; filings are available via SEC EDGAR
• The Sponsor may amend the Declaration of Trust; certain amendments may be disclosed via prospectus supplement

Numbers of note

• Authorized Participants (as of 3/31/2026): 5 (Jane Street Capital, J.P. Morgan Securities LLC, Virtu Americas LLC, Citadel Securities LLC, Goldman Sachs & Co. LLC)
• Creation Unit size: 50,000 Shares
• Creation/Redemption cutoffs: 2:00 p.m. ET
• Ordinary expenses accrued for fiscal year ended March 31, 2026: $108,260
• The Fund has no operating income and sells ether to pay the Sponsor’s fee and Fund expenses not assumed by the Sponsor