Company: TOXR
Filing Date: 2025-11-07
Form Type: S-1/A
Source: 0001213900-25-107665
Chunk: 116

Company: 21Shares XRP ETF
Filing Date: 2025-11-07
Form: S-1/A
Chunk 116
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 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.

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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 to a number of digital asset networks, and these features may provide law enforcement agencies with less visibility
into transaction histories. Although no regulatory action has been taken to treat privacy-enhancing digital assets differently, this
may change in the future.

In addition, a determination
that XRP is offered or sold as a security under U.S. or foreign law could adversely affect an investment in the Trust.

Shareholders do not have the protections associated with ownership of shares in an investment company registered under the 1940 Act or commodity pools under the CEA.

The 1940 Act establishes a
comprehensive federal regulatory framework for investment companies. Regulation of investment companies under the 1940 Act is designed
to, among other things: prevent insiders from managing