Company: TOXR
Filing Date: 2025-08-22
Form Type: S-1/A
Source: 0001213900-25-079981
Chunk: 119

Company: 21Shares XRP ETF
Filing Date: 2025-08-22
Form: S-1/A
Chunk 119
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 asset at the time it was received by the Trust. A hard fork may therefore give rise to additional tax liabilities
for Shareholders.

<div align='center'>54</div>

The intended tax treatment of the Trust will limit the flexibility of the Trust’s investment decisions.

The Trust is intended to
be a grantor trust for federal income tax purposes. A grantor trust is not permitted to vary the investment portfolio of the Shareholders
to take advantage of market fluctuations. Thus, the Sponsor may allow the Trust to hold when an actively managed fund would sell. The
Sponsor may distribute proceeds when an actively managed fund would reinvest the proceeds. In addition, a fund treated as a grantor trust
may not participate in trading or lending activity without raising a risk of change in status. This means that the returns of the Trust
may be less than a successfully actively managed fund.

Other Risks

The Exchange on which the Shares are listed may halt trading in the Trust’s Shares, which would adversely impact a Shareholder’s ability to sell Shares.

The Trust’s Shares are
expected to be listed for trading on the Exchange under the market symbol “[●]”. Trading in Shares may be halted due
to market conditions or, in light of the Exchange rules and procedures, for reasons that, in the view of the Exchange, make trading in
Shares inadvisable. In addition, trading is subject to trading halts or pauses caused by extraordinary market volatility pursuant to “circuit
breaker” rules and/or “limit up/limit down” rules that require trading to be halted or paused for a specified period
based on a specified market decline. Additionally, there can be no assurance that the requirements necessary to maintain the listing of
the Trust’s Shares will continue to be met or will remain unchanged.

The liquidity of the Shares may also be affected by the withdrawal from participation of Authorized Participants, which could adversely affect the market price of the Shares.

In the event that one or more
Authorized Participants or market makers that have substantial interests in the Trust’s Shares withdraw or “step away”
from participation in the purchase (creation) or sale (redemption) of the Trust’s Shares, the liquidity of the Shares will likely
decrease, which could adversely affect the market price of the Shares and result in Shareholders incurring a loss on their investment.

The market infrastructure of the XRP spot market could result in the absence of active Authorized Participants able to support the trading activity of the Trust, which would affect the liquidity of the