Company: TOXR
Filing Date: 2025-11-20
Form Type: S-1/A
Source: 0001213900-25-112826
Chunk: 122

Company: 21Shares XRP ETF
Filing Date: 2025-11-20
Form: S-1/A
Chunk 122
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 such Authorized Participant, the Trust or the Sponsor may be required
to comply with FinCEN regulations, including those that would mandate an Authorized Participant to implement anti-money laundering programs,
make certain reports to FinCEN and maintain certain records. Similarly, the activities of an Authorized Participant, the Trust or the
Sponsor may require it to be licensed as a money transmitter or as a digital asset business, such as under NYDFS’ BitLicense regulation.

Such additional regulatory
obligations may cause an Authorized Participant, the Trust or the Sponsor to incur extraordinary expenses. If an Authorized Participant,
the Trust or the Sponsor decide to seek the required licenses, there is no guarantee that they will receive them in a timely manner.
In addition, to the extent an Authorized Participant, the Trust, or the Sponsor is found to have operated without appropriate state or
federal licenses, it may be subject to investigation, administrative or court proceedings, and civil or criminal monetary fines and penalties,
all of which could harm the reputation of an Authorized Participant, the Trust or the Sponsor and affect the value of the Shares. Furthermore,
an Authorized Participant, the Trust, or the Sponsor may not be able to acquire necessary state licenses or be capable of complying with
certain federal or state regulatory obligations applicable to money services businesses, money transmitters, and businesses engaged in
digital asset activity in a timely manner. An Authorized Participant may also instead decide to terminate its role as Authorized Participant
of the Trust, or the Sponsor may decide to terminate the Trust. Termination by an Authorized Participant may decrease the liquidity of
the Shares, which may adversely affect the value of the Shares, and any termination of the Trust in response to the changed regulatory
circumstances may be at a time that is disadvantageous to the Shareholders.

Tax Risk

The ongoing activities of the Trust may generate tax liabilities for Shareholders.

As described below under “United States Federal Income Tax
Consequences — Taxation of U.S. Shareholders,” it is expected that each Shareholder will include in the computation
of their taxable income their proportionate share of the taxable income and expenses of the Trust, including gains and losses realized
in connection with the use or sale of XRP to pay Trust expenses or facilitate redemption transactions. The Trust does not expect to make
quarterly distributions and accordingly any tax liability that a Shareholder incurs as a result of holding Shares will need to be satisfied
from some other source of funds. If a Shareholder sells Shares in order to raise funds to