Company: TOXR
Filing Date: 2025-12-08
Form Type: S-1/A
Source: 0001213900-25-118924
Chunk: 37

Company: 21Shares XRP ETF
Filing Date: 2025-12-08
Form: S-1/A
Chunk 37
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0 Act).

Any enforcement action by
the SEC or a state securities regulator asserting that XRP is offered or sold as a security, or a court decision to that effect, would
be expected to have an immediate material adverse impact on the trading price of XRP, as well as the Shares. This is because the business
models behind most digital assets are incompatible with regulations applying to transactions in securities. If a digital asset is determined
to be offered and sold as a security, it is likely to become difficult or impossible for the digital asset to be traded, cleared or custodied
in the United States through the same channels used by non-security digital assets, which in addition to materially and adversely
affecting the trading value of the digital asset is likely to significantly impact its liquidity and market participants’ ability
to convert the digital asset into U.S. dollars. Any assertion that a digital asset is offered and sold as a security by the SEC
or another regulatory authority may have similar effects.

<div align='center'>15</div>

In December 2020, the SEC filed a complaint against Ripple Labs (the “Ripple Complaint”) and two of its executives (the “Ripple Defendants”), in the United States District Court for the Southern District of New York (the “S.D.N.Y.”) alleging that the Ripple Defendants had conducted unregistered securities offerings by selling XRP in contravention of Section 5 of the Securities Act. Under Section 5 of the Securities Act, it is unlawful for any person, directly or indirectly to offer to sell, offer to buy or purchase or sell a “security” unless a registration statement is in effect or has been filed with the SEC as to the offer and sale of such security to the public. The Ripple Defendants did not dispute that they had offered to sell and sold XRP through interstate commerce and that they had not filed a registration statement with the SEC for any offer or sale of XRP. Accordingly, the question before the S.D.N.Y. was whether the Ripple Defendants offered to sell or sold XRP as a security.

In the years prior to the filing of the Ripple Complaint, XRP’s market capitalization at times reached over $140 billion. However, in the weeks following the Ripple Complaint, XRP’s market capitalization fell to less than $10 billion, which was less than half of its market capitalization in the days prior to the complaint. Likewise, in the days following the announcement of the Binance Complaint and Coinbase Complaint, the price of various digital