Company: TOXR
Filing Date: 2025-10-10
Form Type: S-1/A
Source: 0001213900-25-098141
Chunk: 138

Company: 21Shares XRP ETF
Filing Date: 2025-10-10
Form: S-1/A
Chunk 138
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 of the length of time it has been in existence, the investment in the
infrastructure that supports it, and the network of individuals and entities that are using
bitcoin in transactions. While XRP has enjoyed some success in its limited history, the aggregate
value of outstanding XRP is smaller than that of bitcoin and may be eclipsed by the more
rapid development of other digital assets. None of the information on CoinMarketCap.com is incorporated by reference into this Prospectus.

<div align='center'>64</div>

Regulation of XRP and Government Oversight

In December 2020, the
SEC filed the Ripple Complaint against the Ripple Defendants in the S.D.N.Y. alleging that the Ripple Defendants had conducted unregistered
securities offerings by selling XRP in contravention of Section 5 of the Securities Act. Under Section 5 of the Securities Act,
it is unlawful for any person, directly or indirectly to offer to sell, offer to buy or purchase or sell a “security” unless
a registration statement is in effect or has been filed with the SEC as to the offer and sale of such security to the public. The Ripple
Defendants did not dispute that they had offered to sell and sold XRP through interstate commerce and that they had not filed a registration
statement with the SEC for any offer or sale of XRP. Accordingly, the question before the S.D.N.Y. was whether the Ripple Defendants
offered to sell or sold XRP as a security.

On July 13, 2023, the S.D.N.Y.
issued several key rulings in the case. Most notably, the court did not find that XRP was inherently a security. The court distinguished
between the XRP token itself and the manner in which it was sold. The court found that the direct sale of XRP by the Ripple Defendants
to certain sophisticated individuals and entities pursuant to written contracts did constitute the unregistered offer and sale of securities
in violation of Section 5 of the Securities Act. However, the court also found that the programmatic sale of XRP by the Ripple Defendants
over digital asset trading platforms did not constitute an unregistered sale of securities. Similarly, the court found that the XRP that
Ripple Defendants granted to Ripple Labs employees as compensation or to third-party companies to incentivize the development of new
applications for XRP and the XRP Ledger also did not constitute an unregistered sale of securities.

In July 2023, another judge
in the S.D.N.Y