Company: TOXR
Filing Date: 2025-08-22
Form Type: S-1/A
Source: 0001213900-25-079981
Chunk: 41

Company: 21Shares XRP ETF
Filing Date: 2025-08-22
Form: S-1/A
Chunk 41
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 buy or sell XRP on XRP spot markets, the closure or temporary shutdown of XRP exchanges due
to fraud, business failure, hackers or malware, or government-mandated regulation may reduce confidence in the XRP network and can slow
down the mass adoption of XRP. Further, spot market failures or that of any other major component of the overall XRP ecosystem can
have an adverse effect on XRP markets and the price of XRP and could therefore have a negative impact on the performance of the Trust.

Negative perception, a lack
of stability in the XRP spot markets, manipulation of XRP spot markets by customers and/or the closure or temporary shutdown of such exchanges
due to fraud, business failure, hackers or malware, or government-mandated regulation may reduce confidence in XRP generally and result
in greater volatility in the market price of XRP and the Shares of the Trust. Furthermore, the closure or temporary shutdown of an XRP
spot market may impact the Trust’s ability to determine the value of its XRP holdings or for the Trust’s Authorized Participants
to effectively arbitrage the Trust’s Shares.

The use of cash creations and redemptions, as opposed to in-kind creations and redemptions, may adversely affect the arbitrage transactions by Authorized Participants intended to keep the price of the Shares closely linked to the price of XRP and, as a result, the price of the Shares may fall or otherwise diverge from NAV.

Authorized Participants
must be registered broker-dealers. Registered broker-dealers are subject to various requirements of the federal securities laws and rules,
including financial responsibility rules such as the customer protection rule, the net capital rule and recordkeeping requirements. On
May 15, 2025, the staff of the SEC’s Division of Trading and Markets stated that broker-dealers are permitted to facilitate in-kind
creations and redemptions in connection with spot digital asset exchange-traded products; however, there is as yet no definitive regulatory
guidance on the specific details of how registered broker-dealers can comply with SEC rules with regard to transacting in or holding
spot XRP. Absent further regulatory clarity regarding whether and how registered broker-dealers can hold and deal in XRP under applicable
broker-dealer financial responsibility and other rules, there is a risk that registered broker-dealers participating in the in-kind creation
or redemption of Shares for XRP may be unable to demonstrate compliance with such rules. While compliance with rules such as the customer
protection rule,