Company: TOXR
Filing Date: 2025-08-22
Form Type: S-1/A
Source: 0001213900-25-079981
Chunk: 42

Company: 21Shares XRP ETF
Filing Date: 2025-08-22
Form: S-1/A
Chunk 42
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 the net capital rule and recordkeeping requirements are primarily the broker-dealer’s responsibility, a national
securities exchange is required to enforce compliance by its member broker-dealers with applicable federal securities law and rules.
Only certain Authorized Participants at present have the ability (either acting themselves or through their affiliates) to support in-kind
creation and redemption activity.

Even with the SEC Staff’s
recent statement clarifying that in-kind creations and redemptions are permitted, the Trust’s limited ability to facilitate in-kind
creations and redemptions could result in the exchange-traded product arbitrage mechanism failing to function as efficiently as it otherwise
would, leading to the potential for the Shares to trade at premiums or discounts to the NAV per Share, and such premiums or discounts
could be substantial. Furthermore, if cash creations or redemptions are unavailable, either due to the Sponsor’s decision to reject
or suspend such orders or otherwise, Authorized Participants will be limited in their ability to redeem or create Shares, in which case
the arbitrage mechanism may not function as efficiently. This could result in impaired liquidity for the Shares, wider bid/ask spreads
in secondary trading of the Shares and greater costs to investors and other market participants. In addition, the Trust’s limited
ability to facilitate in-kind creations and redemptions, and resulting relative reliance on cash creations and redemptions, could cause
the Sponsor to halt or suspend the creation or redemption of Shares during times of market volatility or turmoil, among other consequences.
Further, there can be no assurance that broker-dealers would be willing to serve as Authorized Participants with respect to the in-kind
creation and redemption of Shares. Any of these factors could adversely affect the performance of the Trust and the value of the Shares.

The use of cash creations and
redemptions, as opposed to in-kind creations and redemptions, could cause delays in trade execution due to potential operational issues
arising from implementing a cash creation and redemption model, which involves greater operational steps (and therefore execution risk)
than the originally contemplated in-kind creation and redemption model, or the potential unavailability or exhaustion of the Trade Credits,
which the Trust would not be able to use in connection with in-kind creations and redemptions. Such delays could cause the execution price
associated with such trades to materially deviate from the Pricing Benchmark price used to determine the NAV. Even though the Authorized
Participant is responsible for the dollar cost of such difference in prices, Authorized Participants could default on their obligations
to the Trust