Company: TOXR
Filing Date: 2025-08-22
Form Type: S-1/A
Source: 0001213900-25-079981
Chunk: 68

Company: 21Shares XRP ETF
Filing Date: 2025-08-22
Form: S-1/A
Chunk 68
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 which provides additional protections to ensure that the Sponsor
and the Trust do not transact with a sanctioned party. Notably, the XRP Custodian performs Know-Your-Transaction (“KYT”) screening
using blockchain analytics to identify, detect, and mitigate the risk of transacting with a sanctioned or other unlawful actor. Pursuant
to the XRP Custodian’s KYT program, any XRP that is delivered to the Trust’s custody account will undergo screening to ensure
that the origins of that XRP are not illicit.

In accordance with their
regulatory obligations, the Authorized Participants conduct customer due diligence and enhanced due diligence on their counterparties,
which enable them to determine each counterparty’s AML and other risks and assign an appropriate risk rating.

As part of their counterparty
onboarding processes, the Authorized Participants use third-party services to screen prospective counterparties against various watch
lists, including the Specially Designated Nationals List of the Treasury Department Office of Foreign Assets Control (“OFAC”)
and countries and territories identified as non-cooperative by the Financial Action Task Force.

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There is no guarantee that
such procedures will always be effective. If the Authorized Participants or XRP Counterparties have inadequate policies, procedures and
controls for complying with applicable anti-money laundering and applicable sanctions laws or the Trust’s diligence is ineffective,
violations of such laws could result, which could result in regulatory liability for the Trust, the Sponsor, the Trustee or their affiliates
under such laws, including governmental fines, penalties, and other punishments, as well as potential liability to or cessation of services
by the Prime Broker and its affiliates, including the XRP Custodian. Any of the foregoing could result in losses to the Shareholders or
negatively affect the Trust’s ability to operate.

The actual or perceived use of XRP and other digital assets in illicit transactions may adversely affect the XRP industry and an investment in the Trust.

Recent years have seen
digital assets used at times as part of criminal activities and to launder criminal proceeds, as means of payment for illicit activities,
or as an investment fraud currency. Although the number of cases involving digital assets for the financing of terrorism remains limited,
criminals have nonetheless become more sophisticated in their use of digital assets.

Although XRP transaction details
are logged on the blockchain, a buyer or seller of XRP may never know to whom the public key belongs or the true identity of the party
with whom it is transacting, as public