Company: TOXR
Filing Date: 2025-11-07
Form Type: S-1/A
Source: 0001213900-25-107665
Chunk: 232

Company: 21Shares XRP ETF
Filing Date: 2025-11-07
Form: S-1/A
Chunk 232
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 to fund the redemption, as determined in the manner described above. A redemption of some or all of a Shareholder’s
Shares in exchange for the cash received from such sale is not expected to be treated as a separate taxable event for the Shareholder.

An in-kind redemption of
some or all of a Shareholder’s Shares in exchange for the underlying XRP represented by the Shares redeemed generally will not
be a taxable event to the Shareholder. The Shareholder’s tax basis for the XRP received in the redemption generally will be the
same as the Shareholder’s tax basis for the pro rata share of the XRP held in the Trust immediately prior to the redemption that
is attributable to the Shares redeemed. The Shareholder’s holding period for the XRP received generally will include the period
during which the Shareholder held the Shares being redeemed. A subsequent sale of the XRP received by the Shareholder generally will
be a taxable event.

After any sale or redemption
of less than all of a Shareholder’s Shares, the Shareholder’s tax basis for its pro rata share of the XRP held in the Trust
immediately after such sale or redemption generally will be equal to its tax basis in its share of the total amount of the XRP held in
the Trust immediately prior to the sale or redemption, less the portion of such basis which is taken into account in determining the
amount of gain or loss recognized by the Shareholder upon such sale or cash redemption or, in the case of an in-kind redemption, that
is treated as the basis of the XRP received by the Shareholder in the redemption.

The Trust intends to disclaim
any digital assets created by a fork of the XRP Ledger. Although in certain circumstances the Sponsor may claim or receive new digital
assets created by such a fork and use good faith efforts to make those digital assets (or at the Sponsor’s discretion, the proceeds
thereof) available to Shareholders as of the record date of the fork, there can be no assurance that the Sponsor will do so. Therefore,
if a fork of the XRP Ledger results in holders of XRP receiving a new digital asset of value, the Trust and the Shareholders may not
participate in that value.

If a hard fork occurs in the XRP Ledger and the Trust claims the new forked asset, the Trust could hold both the original XRP and the new “forked” asset. Under current IRS guidance, a hard fork resulting in the receipt of