Company: TOXR
Filing Date: 2025-12-10
Form Type: 424B3
Source: 0001213900-25-120172
Chunk: 230

Company: 21Shares XRP ETF
Filing Date: 2025-12-10
Form: 424B3
Chunk 230
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 Shares as part of the
creation of a Basket, the delivery of XRP to the Trust in exchange for a pro rata share of the underlying XRP represented by the Shares
will not be a taxable event to the Shareholder, and the Shareholder’s tax basis and holding period for the Shareholder’s
pro rata share of the XRP held in the Trust will be the same as its tax basis and holding period for the XRP delivered in exchange therefor.
For purposes of this discussion, and unless stated otherwise, it is assumed that all of a Shareholder’s Shares are acquired on
the same date and at the same price per Share. Shareholders that hold multiple lots of Shares, or that are contemplating acquiring multiple
lots of Shares, should consult their own tax advisers as to the determination of the tax basis and holding period for the underlying
XRP related to such Shares.

Current IRS guidance on the
treatment of convertible virtual currencies classifies XRP as “property” that is not currency for U.S. federal income
tax purposes and clarifies that XRP can be held as a capital asset, but it does not address several other aspects of the U.S. federal
income tax treatment of XRP. Because XRP is a new technological innovation, the U.S. federal income tax treatment of XRP or
transactions relating to investments in XRP may evolve and change from that discussed below, possibly with retroactive effect. In this
regard, the IRS has indicated that it has made it a priority to issue additional guidance related to the taxation of virtual currency
transactions, such as transactions involving XRP. In addition, the IRS and U.S. Treasury Department have issued final regulations
regarding the tax information reporting obligations for certain digital asset transactions. While the U.S. federal government has
started to issue such additional guidance, whether any future guidance will adversely affect the U.S. federal income tax treatment
of an investment in XRP or in transactions relating to investments in XRP is unknown. Moreover, future developments that may arise with
respect to digital assets may increase the uncertainty with respect to the treatment of digital assets for U.S. federal income tax
purposes.

The Trust will use XRP to
pay certain expenses of the Trust, which under current IRS guidance will be treated as a sale of such XRP. Although the Trust generally
does not intend to sell XRP, it may do so in connection with cash redemption transactions, or if necessary to pay certain expenses that