Company: TOXR
Filing Date: 2025-12-08
Form Type: S-1/A
Source: 0001213900-25-118924
Chunk: 123

Company: 21Shares XRP ETF
Filing Date: 2025-12-08
Form: S-1/A
Chunk 123
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 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 expect to make quarterly distributions and accordingly 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 barter exchanges. Such exchanges result in capital gain or loss measured by the difference between
the price at which XRP is exchanged and the taxpayer’s basis in the XRP. However, because XRP is a new technological innovation,
because IRS guidance has taken the form of administrative pronouncements that may be modified without prior notice and comment, and because
there is as yet little case law on the subject, the U.S. federal income tax treatment of an investment in XRP or in transactions
relating to investments in XRP may change from that described in this Prospectus, possibly with retroactive effect. Any such change in
the U.S. federal income tax treatment of XRP may have a negative effect on prices of XRP and may adversely affect the value of the
Shares. In this regard, the IRS has indicated that it has made it a priority to issue additional guidance related to the taxation of
virtual currency transactions, such as transactions involving XRP. In addition, the IRS and U.S. Treasury Department have promulgated
final Treasury regulations regarding the tax information reporting rules for digital asset transactions. While the U.S. Treasury
Department and the IRS have started to issue such additional guidance, whether any future guidance will adversely affect the U.S. federal
income tax treatment of an investment in XRP or in transactions relating to investments in XRP is unknown. Moreover, future developments
that may arise with respect to digital assets may increase the uncertainty with respect to the treatment of digital assets for U.S. federal
income tax purposes.

Investors should consult their
personal tax advisors before making any decision to purchase the Shares of the Trust. Additionally, the tax