Company: TOXR
Filing Date: 2025-12-08
Form Type: S-1/A
Source: 0001213900-25-118924
Chunk: 36

Company: 21Shares XRP ETF
Filing Date: 2025-12-08
Form: S-1/A
Chunk 36
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 has also provided informal assurances
via no-action letter to a handful of promoters that their digital assets are not offered and sold as securities.

On the other hand, the SEC
has brought enforcement actions against the issuers and promoters of several other digital assets on the basis that the digital assets
in question are securities. More recently, the SEC has also brought enforcement actions against digital asset trading platforms for allegedly
operating unregistered securities exchanges on the basis that certain of the digital assets traded on their platforms are securities,
although at least one or more of these actions has since been withdrawn or dismissed following a joint stipulation between the SEC and
the entities allegedly operating an exchange. SEC and other government or regulatory enforcement actions have led, and may in the future
lead, to further volatility in digital asset prices.

Whether a digital asset is
offered or sold as a security under the U.S. federal securities laws depends on whether it is included in the lists of instruments
making up the definition of “security” in the 1933 Act, the Exchange Act and the 1940 Act. Digital assets do not appear
in any of these lists, although each list includes the terms “investment contract” and “note,” and the SEC has
typically analyzed whether a particular digital asset is offered or sold as a security by reference to whether it meets the tests developed
by the federal courts interpreting these terms, known as the “Howey” and “Reves” tests, respectively. For many
digital assets, whether or not the Howey or Reves tests are met is difficult to resolve definitively, and substantial legal arguments
can often be made both in favor of and against a particular digital asset qualifying as being offered or sold as a security under one
or both of the Howey and Reves tests. Adding to the complexity, the SEC staff has indicated that the security status of a particular
digital asset can change over time as the relevant facts evolve.

If the Sponsor determines
that XRP is offered or sold as a security under the U.S. federal securities laws, whether that determination is initially made by
the Sponsor itself, or because a federal court upholds an allegation that XRP is offered or sold as a security, the Sponsor does not
intend to permit the Trust to continue holding XRP in a way that would violate the federal securities laws (and therefore would either
dissolve the Trust or potentially seek to operate the Trust in a manner that complies with the federal securities laws, including the
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