Company: TOXR
Filing Date: 2025-12-10
Form Type: 424B3
Source: 0001213900-25-120172
Chunk: 231

Company: 21Shares XRP ETF
Filing Date: 2025-12-10
Form: 424B3
Chunk 231
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must be paid in cash. If the Trust sells XRP (for example to generate cash to pay fees or expenses) or is treated as selling XRP (for
example by using XRP to pay fees or expenses) for purposes other than funding a cash redemption, a Shareholder will recognize gain or
loss in an amount equal to the difference between (a) the Shareholder’s pro rata share of the amount realized by the Trust
upon the sale and (b) the Shareholder’s tax basis for its pro rata share of the XRP that was sold. A Shareholder’s tax
basis for its share of any XRP sold by the Trust will generally be a pro rata portion of the Shareholder’s total tax basis for
its share of all of the XRP held in the Trust. After any such sale, a Shareholder’s tax basis for its pro rata share of the XRP
remaining in the Trust should be equal to its tax basis for its share of the total amount of the XRP held in the Trust immediately prior
to the sale less the portion of such basis allocable to its share of the XRP that was sold or treated as sold.

Upon a Shareholder’s
sale of some or all of its Shares (other than a redemption), the Shareholder will be treated as having sold the pro rata share of the
XRP held in the Trust at the time of the sale that is attributable to the Shares sold. Accordingly, the Shareholder generally will recognize
gain or loss on the sale in an amount equal to the difference between (a) the amount realized pursuant to the sale of the Shares,
and (b) the Shareholder’s tax basis for the pro rata share of the XRP held in the Trust at the time of sale that is attributable
to the Shares sold, as determined in the manner described in the preceding paragraph. Based on current IRS guidance, such gain or loss
(as well as any gain or loss realized by a Shareholder on account of the Trust selling XRP) will generally be long-term capital gain
or loss if the Shareholder has a holding period of greater than one year in its pro rata share of the XRP that was sold and otherwise
will be short-term capital gain or loss.

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The Trust’s sales of
XRP to fund cash redemptions are expected to result in gains or losses with such gains or losses expected to be treated as incurred by
the Share