Company: TOXR
Filing Date: 2025-08-22
Form Type: S-1/A
Source: 0001213900-25-079981
Chunk: 76

Company: 21Shares XRP ETF
Filing Date: 2025-08-22
Form: S-1/A
Chunk 76
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 relies on a relatively small number of validators, and each
validator maintains a UNL that is an even smaller subset of the validators. While this helps maintain a fast and efficient network, it
could expose the XRP Ledger to additional vulnerabilities. For example, a malicious actor could attempt a “Sybil” attack whereby
it would attempt to gain the trust of existing validators using a large number of fake identities. Such an attack would be difficult to
execute because human intervention would be required for the malicious validators to become trusted, but the risk is made greater by the
small number validators included on each validator’s UNL.

A malicious actor could also
conduct an “eclipse attack.” In an eclipse attack, a malicious actor could isolate parts of the network so that the malicious
actor’s nodes can influence the consensus in isolated sections of the network, eventually leading to a split or takeover.

To the extent that the
XRP Network, including the core validators and the administrators of the network’s validator nodes, does not act to ensure greater
decentralization of validator processing power, the feasibility of a malicious actor obtaining control of the processing power on the
XRP Network will increase, which may adversely affect the value of the Shares.

If any of these exploitations
or attacks occur, it could result in a loss of public confidence in XRP and a decline in the value of XRP and, as a result, adversely
impact an investment in the Shares.

A temporary or permanent “fork” could adversely affect the value of the Shares.

A fork in the XRP Ledger
could adversely affect the value of the Shares or the ability of the Trust to operate. A fork could also adversely affect the price of
XRP at the time of announcement or adoption or subsequently. For example, the announcement of a hard fork could lead to increased demand
for the pre-fork digital asset, in anticipation that ownership of the pre-fork digital asset would entitle holders to a new digital asset
following the fork. The increased demand for the pre-fork digital asset may cause the price of the digital asset to rise. After the hard
fork, it is possible the aggregate price of the two versions of the digital asset running in parallel would be less than the price of
the digital asset immediately prior to the fork. Alternatively, as with any change to software code, software upgrades and other changes
to the source code or protocols of the XRP Ledger could fail to work as intended or could introduce bugs, coding defects, unanticipated