Company: TOXR
Filing Date: 2025-10-10
Form Type: S-1/A
Source: 0001213900-25-098141
Chunk: 213

Company: 21Shares XRP ETF
Filing Date: 2025-10-10
Form: S-1/A
Chunk 213
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 ● | a trust, if a court within the United States is able                                                                             
 to exercise primary supervision over the administration of the trust and one or more United States persons have the authority to 
 control all substantial decisions of the trust.                                                                                  |

If a partnership or other entity
or arrangement treated as a partnership for U.S. federal income tax purposes holds Shares, the tax treatment of a partner generally
depends upon the status of the partner and the activities of the partnership. If you are a partner of a partnership holding Shares, the
discussion below may not be applicable and we urge you to consult your own tax adviser for the U.S. federal income tax implications
of the purchase, ownership and disposition of such Shares.

Taxation of the Trust

The
Sponsor and the Trustee will treat the Trust as a “grantor trust” for U.S. federal
income tax purposes. Although not free from doubt due to the lack of directly governing authority,
if the Trust operates as expected, the Trust should be classified as a “grantor trust”
for U.S. federal income tax purposes (and the following discussion assumes such classification).
As a result, the Trust itself should not be subject to U.S. federal income tax. Instead,
the Trust’s income and expenses should “flow through” to the Shareholders,
and the Trustee will report the Trust’s income, gains, losses and deductions to Shareholders
and the IRS on that basis. There can be no assurance that the IRS will agree with the conclusions
herein and it is possible that the IRS or another tax authority could assert a position contrary
to one or all of those conclusions and that a court could sustain that contrary position.
Neither the Sponsor nor the Trustee will request a ruling from the IRS with respect to the
classification of the Trust for U.S. federal income tax purposes or with respect to
any other matter. If the IRS were to assert successfully that the Trust is not classified
as a “grantor trust,” the Trust would likely be classified as a partnership for
U.S. federal income tax purposes, which may affect the timing and other tax consequences
to the Shareholders. Under such circumstances, the Trust might be classified as a publicly
traded partnership that would be taxable as a corporation for U.S. federal income tax
purposes, in which case the Trust would be taxed in the same manner as a corporation on its
taxable income and distributions to Shareholders out of the earnings and profits of the Trust
would be taxed to