Company: TOXR
Filing Date: 2025-12-10
Form Type: 424B3
Source: 0001213900-25-120172
Chunk: 114

Company: 21Shares XRP ETF
Filing Date: 2025-12-10
Form: 424B3
Chunk 114
---
 services to meet the same anti-money laundering and economic sanctions compliance obligations as other financial companies. DeFi
generally refers to applications that facilitate peer-to-peer financial transactions that are recorded on blockchains. By design, DeFi
provides anonymity, which can allow malicious and criminal actors to evade traditional financial regulatory tools. Noting that transparency
and sensible rules are vital for protecting the financial system from crime, the “Crypto-Asset National Security Enhancement and
Enforcement (‘CANSEE’) Act” was introduced. The CANSEE Act would end special treatment for DeFi by applying the same
national security laws that apply to banks and securities brokers, casinos and pawn shops, and other digital asset companies like centralized
trading platforms. DeFi services would be forced to meet basic obligations, most notably to maintain anti-money laundering programs,
conduct due diligence on their customers, and report suspicious transactions to FinCEN.

Under regulations from the
New York State Department of Financial Services (“NYDFS”), businesses involved in digital asset business activity for
third parties in or involving New York, excluding merchants and consumers, must apply for a license, commonly known as a BitLicense,
from the NYDFS and must comply with anti-money laundering, cyber security, consumer protection, and financial and reporting requirements,
among others. As an alternative to a BitLicense, a firm can apply for a charter to become a limited purpose trust company under New York
law qualified to engage in digital asset business activity. Other states have considered or approved digital asset business activity
statutes or rules, passing, for example, regulations or guidance indicating that certain digital asset business activities constitute
money transmission requiring licensure.

<div align='center'>51</div>

The inconsistency in applying
money transmitting licensure requirements to certain businesses may make it more difficult for these businesses to provide services,
which may affect consumer adoption of XRP and its price. In an attempt to address these issues, the Uniform Law Commission passed a model
law in July 2017, the Uniform Regulation of Virtual Currency Businesses Act, which has many similarities to the BitLicense and features
a multistate reciprocity licensure feature, wherein a business licensed in one state could apply for accelerated licensure procedures
in other states. It is still unclear, however, how many states, if any, will adopt some or all of the model legislation.

The transparency of blockchains
has in the past facilitated investigations by law enforcement agencies. However, certain privacy-enhancing features have been or are
expected to be introduced