Company: TOXR
Filing Date: 2025-10-10
Form Type: S-1/A
Source: 0001213900-25-098141
Chunk: 218

Company: 21Shares XRP ETF
Filing Date: 2025-10-10
Form: S-1/A
Chunk 218
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irdrop results in holders of XRP receiving a new digital asset of value, the
Trust and the Shareholders will not participate in that value. If the Trust were to claim or receive the economic benefit of an airdrop,
it may give rise to additional tax liabilities for Shareholders.

3.8% Medicare Tax on Net Investment Income

Certain U.S. Shareholders
who are individuals are required to pay a 3.8% Medicare tax on the lesser of the excess of their modified adjusted gross income over a
threshold amount ($250,000 for married persons filing jointly and $200,000 for single taxpayers) or their “net investment income,”
which generally includes capital gains from the disposition of property. This tax is in addition to any capital gains taxes due on such
investment income. A similar tax applies to estates and trusts. U.S. Shareholders should consult their own tax advisers regarding
the effect, if any, this tax may have on their investment in the Shares.

Brokerage Fees and Trust Expenses

Any brokerage or other transaction
fee incurred by a Shareholder in purchasing Shares will be treated as part of the Shareholder’s tax basis in the underlying assets
of the Trust. Similarly, any brokerage fee incurred by a Shareholder in selling Shares will reduce the amount realized by the Shareholder
with respect to the sale.

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Shareholders
will be required to recognize the full amount of gain or loss upon a sale or deemed sale
of XRP by the Trust (as discussed above), even though some or all of the proceeds of such
sale are used by the Trustee to pay Trust expenses. Shareholders may deduct their respective
pro rata shares of each expense incurred by the Trust to the same extent as if they directly
incurred the expense. However, most trust expenses are expected to result in miscellaneous
itemized deductions, and noncorporate taxpayers generally are not allowed any deduction with
respect to miscellaneous itemized deductions for tax years beginning before January 1, 2026.

Investment by Certain Retirement Plans

Individual retirement accounts
(“IRAs”) and participant-directed accounts under tax-qualified retirement plans are limited in the types of investments they
may make under the Code. Potential purchasers of Shares that are IRAs or participant-directed accounts under a Code section 401(a) plan
should consult with their own tax advisors as to the tax consequences of a purchase of Shares.

United States Information Reporting and Backup Withholding; Tax Return Reporting