Company: TOXR
Filing Date: 2025-10-10
Form Type: S-1/A
Source: 0001213900-25-098141
Chunk: 61

Company: 21Shares XRP ETF
Filing Date: 2025-10-10
Form: S-1/A
Chunk 61
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 XRP associated with the Trust, could result in losses to the Trust, notwithstanding the regulatory requirements to which the Prime Broker is subject or other potential protections.

A disruption of the Internet may affect XRP operations, which may adversely affect the XRP industry and an investment in the Trust.

The functionality of the XRP network relies on the Internet. A significant disruption of Internet connectivity ( i.e., affecting large numbers of users or geographic regions) could disrupt the XRP Ledger’s functionality and operations until the disruption in the Internet is resolved. A disruption in the Internet could adversely affect an investment in the Trust or the ability of the Trust to operate. In particular, some variants of digital assets have experienced a number of denial-of-service attacks, which have led to temporary delays in block creation and digital asset transfers. Moreover, it is possible that as XRP increases in value, it may become a bigger target for hackers and subject to more frequent hacking and denial-of-service attacks.

The XRP Ledger’s governance structure may negatively affect its ability to grow and respond to challenges.

The XRP Ledger does not have a central authority that unilaterally determines or enforces network-wide decisions. Instead, protocol upgrades and parameter changes are implemented through on-chain proposals. A lack of agreement among XRP holders may affect the XRP Ledger’s adaptability, technical progression or ability to address infrastructure challenges.

Development of the XRP Ledger’s core protocol has been led by Ripple Labs and supported by external contributors through an open-source model. While contributors may propose upgrades or submit governance proposals, adoption of any change depends on community alignment. XRP token holders cannot be compelled to adopt proposed upgrades or maintain compatibility with a given version of the protocol.

This decentralized governance model may complicate efforts to coordinate long-term development or to implement timely responses to emerging risks. If consensus cannot be reached among stakeholders, or if critical protocol upgrades fail to pass or be implemented, the XRP Ledger could experience stagnation or fragmentation. A loss of developer momentum, reduced participation or divergence among validators could impair the usability and competitiveness of the XRP Ledger. In severe cases, unresolved governance disputes could result in a network fork, or a dilution of user and developer engagement.

Potential changes to the XRP network’s protocols and software could, if accepted and authorized by the XRP network community, adversely affect an investment in the Trust.

Development and maintenance of the source code for the XRP Ledger is largely driven by a community of developers and contributors. Ripple Labs is influential, for example, as it employs a team