Company: TOXR
Filing Date: 2025-11-20
Form Type: S-1/A
Source: 0001213900-25-112826
Chunk: 248

Company: 21Shares XRP ETF
Filing Date: 2025-11-20
Form: S-1/A
Chunk 248
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 as a “grantor trust” for US 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
US federal income tax purposes and the Trust itself should not be subject to US federal income tax. Each beneficial owner of Shares will
be treated as directly owning its pro rata Share of the Trust’s assets and a pro rata portion of the Trust’s income, gain,
losses and deductions will “pass through” to each beneficial owner of Shares. If the Trust sells XRP (for example, to pay
fees or expenses), such a sale is a taxable event to Shareholders. Upon a Shareholder’s sale of its Shares, the Shareholder will
be treated as having sold the pro rata share of the XRP held in the Trust at the time of the sale and may recognize gain or loss on such
sale. The Sponsor has reviewed the tax positions as of August 31, 2025, and has determined that no provision for income tax is required
in the Trust’s financial statements.

Recently Issued Accounting Pronouncements

The Trust adopted FASB Accounting
Standards Update 2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures (“ASU 2023-07”).
The Trust operates in one segment. The segment derives its revenues from Trust investments made in accordance with the defined investment
strategy of the Trust, as prescribed in the Trust’s prospectus. The Chief Operating Decision Maker (“CODM”) is the
Sponsor. The CODM monitors the operating results of the Trust. The financial information the CODM leverages to assess the segment’s
performance and to make decisions for the Trust’s single segment, is consistent with that presented within the Trust’s financial
statements.

In December 2023, the FASB issued
Accounting Standards Update (“ASU”) 2023-08, Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60):
Accounting for and Disclosure of Crypto Assets (“ASU 2023-08”). ASU 2023-08 is intended to improve the accounting for certain
crypto assets by requiring an entity to measure those crypto assets at fair value each reporting period with changes in fair value recognized
in net income. The amendments also improve the information provided to investors about an entity’s crypto asset holdings by