Company: TOXR
Filing Date: 2025-12-08
Form Type: S-1/A
Source: 0001213900-25-118924
Chunk: 121

Company: 21Shares XRP ETF
Filing Date: 2025-12-08
Form: S-1/A
Chunk 121
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 and adversely impacting the Shares. If the Sponsor and/or the
Trust determines not to comply with such additional regulatory and registration requirements, the Sponsor may terminate the Trust. Any
such termination could result in the liquidation of the Trust’s XRP at a time that is disadvantageous to Shareholders.

The SEC has recently proposed
rule changes amending and redesignating rule 206(4)-2 under the Advisers Act (the “Custody Rule”). The proposed “Safeguarding
Rule” would amend the definition of a “qualified custodian” under the Custody Rule and expand the scope of the Custody
Rule to cover all digital assets, including XRP, and related advisory activities. If enacted as proposed, these rule changes would likely
impose additional regulatory requirements with respect to the custody and storage of digital assets, including XRP. The Sponsor
is studying the impact that such amendments may have on the Trust and its arrangements with the XRP Custodians. It is possible that such
amendments, if adopted, could prevent the XRP Custodians from serving as service providers to the Trust, or require potentially significant
modifications to existing arrangements, which could cause the Trust to bear potentially significant increased costs. If the Sponsor is
unable to make such modifications or appoint successor service providers to fill the roles that the XRP Custodians currently play, the
Trust’s operations (including in relation to creations and redemptions of Baskets and the holding of XRP) could be negatively affected,
the Trust could dissolve (including at a time that is potentially disadvantageous to Shareholders), and the value of the Shares or an
investment in the Trust could be affected. Further, the proposed amendments could have a severe negative impact on the price of XRP and
therefore the value of the Shares if enacted, by, among other things, making it more difficult for investors to gain access to XRP, or
causing certain holders of XRP to sell their holdings.

If regulatory changes or interpretations of an Authorized Participant’s, the Trust’s or the Sponsor’s activities require the regulation of an Authorized Participant, the Trust or the Sponsor as a money service business under the regulations promulgated by FinCEN under the authority of the U.S. Bank Secrecy Act or as a money transmitter or digital asset business under state regimes for the licensing of such businesses, an Authorized Participant, the Trust or the Sponsor may be required to register and comply with such regulations, which could result