Company: TOXR
Filing Date: 2025-11-20
Form Type: S-1/A
Source: 0001213900-25-112826
Chunk: 123

Company: 21Shares XRP ETF
Filing Date: 2025-11-20
Form: S-1/A
Chunk 123
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 satisfy such a tax liability, the sale itself
may generate additional taxable gain or loss.

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The tax treatment of XRP and transactions involving XRP for United States federal income tax purposes may change.

Under current IRS
guidance, XRP is treated as property, not as currency, for U.S. federal income tax purposes and transactions involving payment
in XRP in return for goods and services are treated as barter exchanges. Such exchanges result in capital gain or loss measured by
the difference between the price at which XRP is exchanged and the taxpayer’s basis in the XRP. However, because XRP is a
new technological innovation, because IRS guidance has taken the form of administrative pronouncements that may be modified without
prior notice and comment, and because there is as yet little case law on the subject, the U.S. federal income tax treatment of
an investment in XRP or in transactions relating to investments in XRP may change from that described in this Prospectus, possibly
with retroactive effect. Any such change in the U.S. federal income tax treatment of XRP may have a negative effect on prices
of XRP and may adversely affect the value of the Shares. 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 promulgated final Treasury regulations regarding the tax information
reporting rules for digital asset transactions. While the U.S. Treasury Department and the IRS have 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.

Investors should consult their
personal tax advisors before making any decision to purchase the Shares of the Trust. Additionally, the tax considerations contained
herein are in summary form and may not be used as the sole basis for the decision to invest in the Shares from a tax perspective, since
the individual situation of each investor must also be taken into account. Accordingly, the considerations regarding taxation contained
herein do not constitute any sort of material information or tax advice nor are they in any way to be construed as a