Company: TOXR
Filing Date: 2025-11-07
Form Type: S-1/A
Source: 0001213900-25-107665
Chunk: 142

Company: 21Shares XRP ETF
Filing Date: 2025-11-07
Form: S-1/A
Chunk 142
---
ensuring its security, or for reputational benefits within the XRP community. Institutions like banks, financial entities, or tech companies
might run validators because they use the XRP Ledger in their business operations. By running a validator, they can have more influence
over the reliability and stability of the network they rely on.

Investment and Speculative Sector

This sector includes the investment
and trading activities of both private and professional investors and speculators. Historically, larger financial services institutions
are publicly reported to have limited involvement in investment and trading in digital assets, although the participation landscape is
beginning to change. Currently, there is relatively limited use of digital assets in the retail and commercial marketplace in comparison
to relatively extensive use by speculators, and a significant portion of demand for digital assets is generated by speculators and investors
seeking to profit from the short- or long-term holding of digital assets.

Retail Sector

The retail sector includes
users transacting in direct peer-to-peer XRP activity through the direct sending of XRP over the XRP Ledger. The retail sector also includes
transactions in which consumers pay for goods or services from commercial or service businesses through direct transactions or third-party
service providers, although the use of XRP as a means of payment is still developing and has not been accepted in the same manner as
bitcoin because XRP has a generally different purpose than bitcoin.

Service Sector

This sector includes companies
that provide a variety of services including the buying, selling, payment processing and storing of XRP. For example, Coinbase,
Kraken, Bitstamp, Gemini, and LMAX Digital are some of the largest digital asset trading platforms by volume traded. Coinbase Custody,
the XRP Custodian, is a digital asset custodian that provides custodial accounts that store XRP for users. As the XRP Ledger continues
to grow in acceptance, it is anticipated that service providers will expand the currently available range of services and that additional
parties will enter the service sector for the XRP Ledger.

<div align='center'>64</div>

Regulation of XRP and Government Oversight

In December 2020, the
SEC filed the Ripple Complaint against the Ripple Defendants in the S.D.N.Y. alleging that the Ripple Defendants had conducted unregistered
securities offerings by selling XRP in contravention of Section 5 of the Securities Act. Under Section 5 of the Securities
Act, it is unlawful for any person, directly or indirectly to offer to sell, offer to