Company: TOXR
Filing Date: 2025-10-10
Form Type: S-1/A
Source: 0001213900-25-098141
Chunk: 34

Company: 21Shares XRP ETF
Filing Date: 2025-10-10
Form: S-1/A
Chunk 34
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2025 estimate that XRP co-founder Chris Larsen holds at least 2.5 billion XRP tokens and sales previously
attributed to Mr. Larsen have resulted in heighted volatility in the market price and trading volume of XRP. For instance, sales believed
to be attributable to Mr. Larsen in August 2025 resulted in the market price of XRP dropping 14% intraday. The concentration of XRP in
the hands of Ripple Labs and early stakeholders, such as XRP co-founder Chris Larsen, could affect the market’s confidence in XRP
as a digital asset.

A determination that XRP or any other digital asset is offered or sold as a “security” may adversely affect the price of XRP and the value of the Shares, and result in potentially extraordinary, nonrecurring expenses to, or termination of, the Trust.

Depending on its characteristics,
a digital asset, including XRP, may be considered to be offered and sold as a “security” under U.S. federal securities
laws. The tests for determining whether a particular digital asset is offered and sold as a “security” are complex and difficult
to apply, and the outcome is difficult to predict. Public, though non-binding, statements by senior officials at the SEC have indicated
that the SEC does not currently consider bitcoin to be offered or sold as a security. The SEC staff has also provided informal assurances
via no-action letter to a handful of promoters that their digital assets are not offered and sold as securities.

On the other hand, the
SEC has brought enforcement actions against the issuers and promoters of several other digital assets on the basis that the digital assets
in question are securities. More recently, the SEC has also brought enforcement actions against digital asset trading platforms for allegedly
operating unregistered securities exchanges on the basis that certain of the digital assets traded on their platforms are securities,
although at least one or more of these actions has since been withdrawn or dismissed following a joint stipulation between the SEC and
the entities allegedly operating an exchange. SEC and other government or regulatory enforcement actions have led, and may in the future
lead, to further volatility in digital asset prices.

Whether a digital asset
is offered or sold as a security under the U.S. federal securities laws depends on whether it is included in the lists of instruments
making up the definition of “security” in the 1933 Act, the Exchange Act and the 1940 Act. Digital assets do not appear
in any of these