Company: TOXR
Filing Date: 2025-08-22
Form Type: S-1/A
Source: 0001213900-25-079981
Chunk: 116

Company: 21Shares XRP ETF
Filing Date: 2025-08-22
Form: S-1/A
Chunk 116
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 regulatory
obligations may cause the Authorized Participant, the Trust or the Sponsor to incur extraordinary expenses. If the 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 the 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. The 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 the 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 anticipate making distributions to Shareholders, so 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 satisfy such a tax liability, the sale itself may generate additional taxable
gain or loss.

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The tax treatment of XRP and transactions involving XRP for United States federal income tax purposes may change.

Under current IRS guidance,
XRP is treated as property, not as currency, for U.S. federal income tax purposes and transactions involving payment in XRP in return
for goods and services are treated as bar