Company: TOXR
Filing Date: 2025-12-10
Form Type: 424B3
Source: 0001213900-25-120172
Chunk: 81

Company: 21Shares XRP ETF
Filing Date: 2025-12-10
Form: 424B3
Chunk 81
---
 the activities of stablecoin issuers and their regulatory treatment.

While the Trust does not invest
in stablecoins, it may nonetheless be exposed to these and other risks that stablecoins pose for the XRP market through its investment
in XRP. Stablecoins are digital assets designed to have a stable value over time as compared to typically volatile digital assets, and
are typically marketed as being pegged to a fiat currency, such as the U.S. dollar. Although the prices of stablecoins are intended
to be stable, in many cases, their prices fluctuate, sometimes significantly. This volatility has in the past apparently impacted the
price of XRP. Stablecoins are a relatively new phenomenon and it is impossible to know all of the risks that they could pose to
participants in the XRP market. In addition, some have argued that some stablecoins, particularly Tether, are improperly issued without
sufficient backing in a way that could cause artificial rather than genuine demand for XRP, raising its price, and also argue that those
associated with certain stablecoins that are involved in laundering money. On February 17, 2021, the New York Attorney General
entered into an agreement with Tether’s operators, requiring them to cease any further trading activity with New York persons
and pay $18.5 million in penalties for false and misleading statements made regarding the assets backing Tether. On October 15,
2021, the CFTC announced a settlement with Tether’s operators in which they agreed to pay $42.5 million in fines to settle
charges that, among others, Tether’s claims that it maintained sufficient U.S. dollar reserves to back every Tether stablecoin
in circulation with the “equivalent amount of corresponding fiat currency” held by Tether were untrue.

Stablecoins are reliant on
the U.S. banking system and U.S. treasuries, and the failure of either to function normally could impede the function of stablecoins
and therefore could adversely affect the value of the Shares.

Given the role that stablecoins
play in global digital asset markets, their fundamental liquidity can have a dramatic impact on the broader digital asset market, including
the market for XRP. Volatility in stablecoins, operational issues with stablecoins (for example, technical issues that prevent settlement),
concerns about the sufficiency of any reserves that support stablecoins, or regulatory concerns about stablecoin issuers or intermediaries,
such as exchanges, that support stablecoins, could impact individuals