Company: TOXR
Filing Date: 2025-11-07
Form Type: S-1/A
Source: 0001213900-25-107665
Chunk: 144

Company: 21Shares XRP ETF
Filing Date: 2025-11-07
Form: S-1/A
Chunk 144
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.Y. entered a final judgment in the case on August 7, 2024, imposing a $125,035,150 civil penalty against Ripple Labs and an injunction prohibiting Ripple Labs from violating the registration provisions of the 1933 Act. Both the SEC and Ripple Labs appealed the ruling. However, on August 7, 2025, the SEC, Ripple Labs and other defendants filed a Joint Stipulation of Dismissal that dismisses the SEC’s appeal and Ripple Labs’ cross-appeal pending in the Second Circuit, and resolves the Commission’s civil enforcement action against the defendants. Following the dismissal of the cross-appeals, that final judgment will remain in effect.

If XRP is found by a court
or other regulatory body to be ordered or sold as a security, the Trust could be considered an unregistered “investment company”
under the Investment Company Act of 1940, which could necessitate the Trust’s liquidation under the terms of the Trust
Agreement. Furthermore, the Trust could be considered to be engaged in a distribution (i.e., a public offering) of unregistered securities
in violation of Section 5 of the Securities Act, which could impose significant civil and criminal liability on the Trust. There
is no guarantee that a court of regulatory body will agree with the Trust’s assessment of XRP as not being offered or sold as a
security.

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To the extent that XRP is
deemed to fall within the definition of being offered or sold as a security under U.S. federal securities laws, the Trust and the
Sponsor may be subject to additional requirements under the Investment Company Act and the Advisers Act. The Sponsor or the Trust may
be required to register as an investment adviser under the Advisers Act. Such additional registration may result in extraordinary, recurring
and/or non-recurring expenses of the Trust, thereby materially and adversely impacting the Shares. If the Sponsor and/or the Trust determines
not to comply with such additional regulatory and registration requirements, the Sponsor may terminate the Trust. Any such termination
could result in the liquidation of the Trust’s XRP at a time that is disadvantageous to Shareholders.

Regulation of Digital Assets in General

As digital assets have grown
in both popularity and market size, the U.S. Congress and a number of U.S. federal and state agencies (including FinCEN, SEC,
CFTC, FINRA, the Consumer Financial Protection Bureau (“CFPB”), the