Company: TOXR
Filing Date: 2025-08-22
Form Type: S-1/A
Source: 0001213900-25-079981
Chunk: 43

Company: 21Shares XRP ETF
Filing Date: 2025-08-22
Form: S-1/A
Chunk 43
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, or such potential risks and costs could lead to Authorized Participants, who would otherwise be willing to purchase or redeem
Baskets to take advantage of any arbitrage opportunity arising from discrepancies between the price of the Shares and the price of the
underlying XRP, to elect to not participate in the Trust’s Share creation and redemption processes. This may adversely affect the
arbitrage mechanism intended to keep the price of the Shares closely linked to the price of XRP, and as a result, the price of the Shares
may fall or otherwise diverge from NAV. If the arbitrage mechanism is not effective, purchases or sales of Shares on the secondary
market could occur at a premium or discount to NAV, which could harm Shareholders by causing them buy Shares at a price higher than the
value of the underlying XRP held by the Trust or sell Shares at a price lower than the value of the underlying XRP held by the Trust,
causing Shareholders to suffer losses.

<div align='center'>18</div>

To the knowledge of the Sponsor,
exchange-traded products for spot-market commodities other than XRP, such as gold and silver, generally employ in-kind creations and redemptions
with the underlying asset. The Sponsor believes that it is generally more efficient, and therefore less costly, for spot commodity exchange-traded
products to utilize in-kind orders rather than cash orders, because there are fewer steps in the process and therefore there is less operational
risk involved when an authorized participant can manage the buying and selling of the underlying asset itself, rather than depend on an
unaffiliated party such as the issuer or sponsor of the exchange-traded product. As such, a spot commodity exchange-traded product that
only employs cash creations and redemptions and does not permit in-kind creations and redemptions is a novel product that has not been
tested, and could be impacted by any resulting operational inefficiencies.

If the process of creation and redemption of Baskets encounters any unanticipated difficulties, the possibility for arbitrage transactions by Authorized Participants intended to keep the price of the Shares closely linked to the price of XRP may not exist and, as a result, the price of the Shares may fall or otherwise diverge from NAV.

If the processes of creation
and redemption of Shares (which depend on timely transfers of XRP to and by the XRP Custodian) encounter any unanticipated difficulties
due to, for example, the price volatility of XRP, the insolvency, business failure or interruption, default