Company: TOXR
Filing Date: 2025-11-07
Form Type: S-1/A
Source: 0001213900-25-107665
Chunk: 169

Company: 21Shares XRP ETF
Filing Date: 2025-11-07
Form: S-1/A
Chunk 169
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 XRP Custodians on an ongoing basis, but a portion of the Trust’s assets may be
held in hot trading wallets, from time to time, in connection with the settlement of a creation or redemption transaction. Similarly
secure technology used by the XRP Custodians include a combination of Multi-Party Computation (“MPC”), Hardware Security
Modules (“HSMs”), and Cross-Domain Security (“CDS”) to safeguard digital assets. MPC is a cryptographic framework
that ensures private keys are never fully assembled or exposed during the transaction process. Instead, key shares are distributed across
secure, isolated environments, reducing single points of compromise and enabling secure, multi-party transaction approvals. HSMs are
dedicated, tamper-resistant cryptographic devices used to securely generate, store, and manage key fragments. HSMs enforce role-based
access controls and support transaction signing workflows across designated approval parties. CDS is a high-assurance security architecture
originally developed for sensitive government environments. It enhances the integrity of cold storage systems by strictly isolating secure
processing domains and preventing unauthorized cross-network interactions. These technologies operate alongside cold storage, where private
key material remains entirely offline and physically secured in air-gapped environments. This layered approach ensures that private keys
are protected.

Cold storage is a safeguarding
method with multiple layers of protections and protocols, by which the private key(s) corresponding to the Trust’s XRP is
(are) generated and stored in an offline manner. Private keys are generated in offline computers that are not connected to the internet
so that they are resistant to being hacked. By contrast, in hot storage, the private keys are held online, where they are more accessible,
leading to more efficient transfers, though they are potentially more vulnerable to being hacked. There is no limit on the size of each
cold storage address, and the XRP Custodians will generally keep a substantial portion of the Trust’s XRP in cold storage on an
ongoing basis. However, it is possible that, from time to time, portions of the Trust’s XRP will be held outside of cold storage
temporarily in the Trading Balance maintained by the Prime Broker as part of trade facilitation in connection with creations and redemptions
of Baskets, to sell XRP including to pay Trust expenses, or to pay the Sponsor Fee, as necessary. The Trust’s XRP held in the Cold
Vault Balance by the XRP Custodians are held in segregated wallets and therefore are not comm