Company: TOXR
Filing Date: 2025-12-08
Form Type: S-1/A
Source: 0001213900-25-118924
Chunk: 135

Company: 21Shares XRP ETF
Filing Date: 2025-12-08
Form: S-1/A
Chunk 135
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. Wallets that are used to store cryptographic keys can be “hot” or “cold.” A hot wallet is connected
to the internet, and is thus readily available to facilitate trading, but may be more vulnerable to hacking. A cold wallet is a wallet
that stores cryptographic keys offline, such as on a computer that has no internet access, a segregated piece of hardware, or a piece
of paper.

Neither the recipient
nor the sender reveal their private keys in a transaction, because the private key authorizes transfer of the funds in that address to
other users. Therefore, if a user loses his or her private key, the user may permanently lose access to the XRP contained in the associated
address. Likewise, XRP is irretrievably lost if the private key associated with them is deleted and no backup has been made. When sending
XRP, a user’s XRP Ledger software program must validate the transaction with the associated private key. In addition, since every
computation on the XRP Ledger requires processing power, there is a transaction fee involved with the transfer that is paid by the payor.
The resulting digitally validated transaction is sent by the user’s XRP Ledger software program to the XRP Ledger validators to
allow transaction confirmation.

Some XRP transactions are
conducted “off-blockchain” (i.e., through centralized book-entries) and are therefore not recorded on the XRP Ledger. These
“off-blockchain transactions” involve the transfer of control over, or ownership of, a specific digital wallet holding XRP
or the reallocation of ownership of certain XRP in a pooled-ownership digital wallet, such as a digital wallet owned by a digital asset
trading platforms. In contrast to on-blockchain transactions, which are publicly recorded on the XRP Ledger, information and data regarding
off-blockchain transactions are generally not publicly available. Therefore, off-blockchain transactions are not truly XRP Ledger transactions
in that they do not involve the transfer of transaction data on the XRP Ledger and do not reflect a movement of XRP between addresses
recorded in the XRP Ledger. For these reasons, off-blockchain transactions are subject to risks as any such transfer of XRP ownership
is not protected by the protocol behind the XRP Ledger or recorded in, and validated through, the ledger mechanism.

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XRP can also be held in escrow
on the XRP Ledger, meaning the XRP is locked up and released only