Company: TOXR
Filing Date: 2025-12-08
Form Type: S-1/A
Source: 0001213900-25-118924
Chunk: 125

Company: 21Shares XRP ETF
Filing Date: 2025-12-08
Form: S-1/A
Chunk 125
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 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 Custodians 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 asset at the time it was received by the Trust. A hard fork may therefore give rise to additional tax liabilities for Shareholders.

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The intended tax treatment of the Trust will limit the flexibility of the Trust’s investment decisions.

The Trust is intended to be
a grantor trust for U.S. federal income tax purposes. A grantor trust is not permitted to vary the investment portfolio of the Shareholders
to take advantage of market fluctuations. Thus, the Sponsor may allow the Trust to hold when an actively managed fund would sell. The
Sponsor may distribute proceeds when an actively managed fund would reinvest the proceeds. In addition, a fund treated as a grantor trust
may not participate in trading or lending activity without raising a risk of change in status. This means that the returns of the Trust
may be less than a successfully actively managed fund.

Other Risks

The Exchange on which the Shares are listed may halt trading in the Trust’s Shares, which would adversely impact a Shareholder’s ability to sell Shares.

The Trust’s Shares are
expected to be listed for trading on the Exchange under the market symbol “TOXR”. Trading in Shares may be halted due to
market conditions or, in light of the Exchange rules and procedures, for reasons that, in the view of the Exchange, make trading in Shares
inadvisable. In addition, trading is subject to trading halts or pauses caused by extraordinary market volatility pursuant to “circuit
breaker” rules and/or “limit up/limit down” rules that require trading to be halted or paused for a specified period
based on a specified market decline