Company: TOXR
Filing Date: 2025-12-10
Form Type: 424B3
Source: 0001213900-25-120172
Chunk: 106

Company: 21Shares XRP ETF
Filing Date: 2025-12-10
Form: 424B3
Chunk 106
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 the Trust’s XRP holdings or XRP holdings per Share is incorrectly calculated, neither the Sponsor nor the Administrator will
be liable for any error and such misreporting of valuation data could adversely affect the value of the Shares.

Regulatory Risk

XRP’s status as a being offered and sold as a “security” under U.S. federal securities laws remains unsettled.

The SEC has asserted its belief
that XRP is properly classified as a “security” under U.S. federal securities laws in the Ripple Complaint. Although
the S.D.N.Y. ruled that XRP was not inherently a security, it did find that certain purchases and sales of XRP can be deemed to be unregistered
sales of securities, depending upon the characteristics of the transaction. In future litigation, other courts might disagree with the
assessment that XRP is not offered or sold as a security, or that XRP is offered or sold as a security depending on the characteristics
of the transaction. To the extent that a court were to find that the Trust had engaged in unregistered sales of securities, the Trust
would be subject to penalties, disgorgement and other sanctions, which would significantly negatively impact the Trust and the value
of Shares.

The S.D.N.Y. entered a final
judgment in the case on August 7, 2024, imposing a $125,035,150 civil penalty against Ripple Labs and an injunction prohibiting Ripple
Labs from violating the registration provisions of the Securities Act. Both the SEC and Ripple appealed the ruling. However, on August
7, 2025, the SEC, Ripple Labs and other defendants filed a Joint Stipulation of Dismissal that dismisses the SEC’s appeal and Ripple
Labs’ cross-appeal pending in the Second Circuit, and resolves the Commission’s civil enforcement action against the defendants.
Following the dismissal of the cross-appeals, that final judgment will remain in effect.

In accordance with the Sponsor’s
internal policies and procedures, the Sponsor engaged in a review process to determine whether XRP has been bought or sold as a security
and based off the review it has determined it has not. The Sponsor has reviewed publicly available materials relating to XRP and the
Ripple Labs. Among other things, the Sponsor has reviewed publicly available materials relating to the circumstances around the creation
of XRP, the market and technological needs that the XRP Ledger was intended to address, the XRP Ledger’s role in enabling blockchain
interoperability and cross