Company: TOXR
Filing Date: 2025-10-10
Form Type: S-1/A
Source: 0001213900-25-098141
Chunk: 165

Company: 21Shares XRP ETF
Filing Date: 2025-10-10
Form: S-1/A
Chunk 165
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 keep a substantial portion of the private keys associated with the Trust’s XRP in the Cold
Vault Balance, with any remainder of the Vault Balance held as a “Hot Vault Balance.” All of the Trust’s assets and
private keys will be held in the Cold Vault Balance of the XRP Custodian on an ongoing basis, but a portion of the Trust’s assets
may be held in hot trading wallets, from time to time, in connection with the settlement of a creation or redemption transaction. Similarly
secure technology used by the XRP Custodian includes a combination of Multi-Party Computation (“MPC”), Hardware Security
Modules (“HSMs”), and Cross-Domain Security (“CDS”) to safeguard digital assets. MPC is a cryptographic framework
that ensures private keys are never fully assembled or exposed during the transaction process. Instead, key shares are distributed across
secure, isolated environments, reducing single points of compromise and enabling secure, multi-party transaction approvals. HSMs are
dedicated, tamper-resistant cryptographic devices used to securely generate, store, and manage key fragments. HSMs enforce role-based
access controls and support transaction signing workflows across designated approval parties. CDS is a high-assurance security architecture
originally developed for sensitive government environments. It enhances the integrity of cold storage systems by strictly isolating secure
processing domains and preventing unauthorized cross-network interactions. These technologies operate alongside cold storage, where private
key material remains entirely offline and physically secured in air-gapped environments. This layered approach ensures that private keys
are protected.

Cold storage is a safeguarding
method with multiple layers of protections and protocols, by which the private key(s) corresponding to the Trust’s XRP is
(are) generated and stored in an offline manner. Private keys are generated in offline computers that are not connected to the internet
so that they are resistant to being hacked. By contrast, in hot storage, the private keys are held online, where they are more accessible,
leading to more efficient transfers, though they are potentially more vulnerable to being hacked. There is no limit on the size of each
cold storage address, and the XRP Custodian will generally keep a substantial portion of the Trust’s XRP in the Cold Vault Balance
on an ongoing basis. However, it is possible that, from time to time, portions of the Trust’s XRP will be held outside of cold
storage temporarily as a “Hot Vault Balance” in hot trading wallets maintained by the Prime Broker as part of trade facilitation