Company: TOXR
Filing Date: 2025-08-22
Form Type: S-1/A
Source: 0001213900-25-079981
Chunk: 118

Company: 21Shares XRP ETF
Filing Date: 2025-08-22
Form: S-1/A
Chunk 118
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 purposes may be issued
in the future. A state or local government authority’s treatment of XRP may have negative consequences, including the imposition
of a greater tax burden on investors in XRP or the imposition of a greater cost on the acquisition and disposition of XRP generally. Moreover,
it cannot be ruled out that the tax treatment by tax authorities and courts could be interpreted differently or could be subject to changes
in the future. Any such treatment may have a negative effect on prices of XRP and may adversely affect the value of the Shares.

The taxation of XRP and associated
companies can vary significantly by jurisdiction and is subject to risk of significant revision. Such revision, or the application of
new tax schemes or taxation in additional jurisdictions, may adversely impact the Trust’s performance. Before making a decision
to invest in the Trust, investors should consult their local tax advisor on taxation.

A hard “fork” of the XRP Ledger could result in Shareholders incurring a tax liability.

The Trust intends to disclaim
any digital assets created by a fork of the XRP Ledger. Although in certain circumstances the Sponsor may claim or receive new digital
assets created by such a fork and use good faith efforts to make those digital assets (or at the Sponsor’s discretion, the proceeds
thereof) available to Shareholders as of the record date of the fork, there can be no assurance that the Sponsor will do so. Therefore,
if a fork of the XRP Ledger results in holders of XRP receiving a new digital asset of value, the Trust and the Shareholders may not participate
in that value.

If a hard fork occurs in
the XRP Ledger and the Trust claims the new forked asset, the Trust could hold both the original XRP and the new “forked”
asset. Under current IRS guidance, a hard fork resulting in the receipt of new units of digital assets is a taxable event giving rise
to ordinary income equal to the value of the new digital asset. The Trust Agreement will require that, if such a transaction occurs,
the Trust will as soon as possible direct the XRP Custodian to distribute the new forked asset in-kind to the Sponsor, as agent for the
Shareholders, and the Sponsor will arrange to sell the new forked asset and for the proceeds to be distributed to the Shareholders. Such
a sale will give rise to gain or loss, for U.S. federal income tax purposes, if the amount realized on the sale differs from the
value of the new forked