Company: TOXR
Filing Date: 2025-08-22
Form Type: S-1/A
Source: 0001213900-25-079981
Chunk: 75

Company: 21Shares XRP ETF
Filing Date: 2025-08-22
Form: S-1/A
Chunk 75
---

a transaction has been added to the blockchain, it cannot be reversed. Several exchanges specializing in sales of XRP, for example, have
already had their operations impacted by cyber-attacks.

Thefts and cyber-attacks can
have a negative impact on the reputation, market price, value, or liquidity of XRP. Through investment in the Trust, investors would
be indirectly exposed to the risk and potential impact of a cyber-attack. A loss associated with a cyber-attack, including a total loss,
is possible. While the Sponsor and the XRP Custodian have taken reasonable measures to prevent a theft or hacking of the Trust’s
XRP holdings, such an event cannot be fully excluded from the Trust’s overall market exposure, and the losses associated with such
an event would be borne by investors.

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Digital asset networks, including
the XRP Ledger, are subject to control by entities that capture a significant amount of the network’s active validator nodes or
a significant number of developers important for the operation and maintenance of such digital asset network. The XRP Ledger relies on
a network of validator nodes that agree on the order and validity of transactions. These nodes form the backbone of the consensus process.
Each validator node maintains a Unique Node List, which is a list of other validators it trusts. For a malicious actor to take over, they
would need to control a significant portion of the validators on the majority of these UNLs. To successfully alter the ledger, the malicious
actor would likely need to control more than 80% of the validator nodes or the voting power on the most widely used UNLs.

A malicious actor may also
obtain control over the XRP Network through its influence over core developers by gaining direct control over a core developer or an
otherwise influential programmer. To the extent that users and validators accept amendments to the source code proposed by the controlled
core developer, other core developers do not counter such amendments, and such amendments enable the malicious exploitation of the XRP
Network, the risk that a malicious actor may be able to obtain control of the XRP Network in this manner exists, which may adversely
affect the value of the Shares. If the malicious actor cannot control the validator nodes directly, they might attempt to compromise
the validators that are already trusted by the network. This could involve hacking, bribery, deception or coercion.

Compared to other digital asset
networks such as the Bitcoin network and Ethereum network, the XRP Ledger