Company: TOXR
Filing Date: 2025-11-20
Form Type: S-1/A
Source: 0001213900-25-112826
Chunk: 117

Company: 21Shares XRP ETF
Filing Date: 2025-11-20
Form: S-1/A
Chunk 117
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 CEA.

The 1940 Act establishes a
comprehensive federal regulatory framework for investment companies. Regulation of investment companies under the 1940 Act is designed
to, among other things: prevent insiders from managing the companies to their benefit and to the detriment of public investors; prevent
the inequitable or discriminate issuance of investment company securities and prevent the use of unsound or misleading methods of computing
asset values. For example, registered investment companies subject to the 1940 Act must have a board of directors, a certain minimum
percentage of whom must be independent (generally, at least a majority). Further, after an initial two-year period, such registered investment
companies’ advisory and sub-advisory contracts must be annually reapproved by a majority of (1) the entire board of directors
and (2) the independent directors. Additionally, such registered investment companies are subject to prohibitions and restrictions
on transactions with their affiliates and required to maintain fund assets with special types of custodians (generally, banks or broker-dealers).
Moreover, such registered investment companies are subject to significant limits on the use of leverage, as well as limits on the form
of capital structure and the types of securities a registered fund can issue.

The Trust is not registered
as an investment company under the 1940 Act, and the Sponsor believes that the Trust is not permitted or required to register under such
act. Consequently, Shareholders do not have the regulatory protections provided to investors in investment companies.

The Trust will not hold or
trade in commodity interests regulated by the CEA, as administered by the CFTC. Furthermore, the Sponsor believes that the Trust
is not a commodity pool for purposes of the CEA, and that neither the Sponsor nor the Trustee is subject to regulation by the CFTC as
a commodity pool operator or a commodity trading advisor in connection with the operation of the Trust. Consequently, Shareholders will
not have the regulatory protections provided to investors in CEA-regulated instruments or commodity pools.

Future and current laws and regulations by a United States or foreign government or quasi-governmental agencies could have an adverse effect on an investment in the Trust.

The regulation of XRP and
related products and services continues to evolve, may take many different forms and will, therefore, impact XRP and its usage in a variety
of manners. The inconsistent, unpredictable, and sometimes conflicting regulatory landscape may make it more difficult for XRP businesses
to provide services, which may impede the growth