SEC Filing Document

Company: T. Rowe Price Active Crypto ETF
Ticker: 
CIK: 2089855
Filing Type: S-1/A
Document Type: S-1/A
Date Filed: 2026-03-16
Accession Number: 0001999371-26-005896
Exchange: 
SIC Code: 6221
SIC Description: Commodity Contracts Brokers & Dealers
URL: https://www.sec.gov/Archives/edgar/data/2089855/000199937126005896/active-s1a_031626.htm

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the security of the Bitcoin network and could adversely affect the price of bitcoin and the value of the Shares. The proof-of-work validation mechanism used to verify transactions on the Bitcoin Network necessitates that bitcoin miners maintain high levels of computing power, which can require extremely high energy usage. Although measuring the electricity consumed by this process is difficult because these operations are performed by various machines with varying levels of efficiency, the process consumes a significant amount of energy. Further, in addition to the direct energy costs of performing these calculations, there are indirect costs that impact the Bitcoin Network’s total energy consumption, including the costs of cooling the machines that perform these calculations. A significant decrease in the computational resources dedicated to the Bitcoin Network’s validation protocol could reduce the security of the network which may erode bitcoin’s viability as a store of value or means of exchange.

Several alternative mechanisms
to proof-of-work have emerged in recent years, aiming to offer more energy-efficient validation processes for blockchain networks
and high costs of electricity may incentivize miners to redirect their capital and efforts to other validation protocols, such
as PoS blockchains, in which rather than using computational power to add new blocks of transactions to the blockchain, users pledge
capital denominated in the network’s native currency as a guarantee of action in good faith when producing blocks. Alternatively,
miners can abandon their validation activities altogether.

Due to concerns around energy
consumption and associated environmental concerns, particularly as such concerns relate to public utilities companies, various
countries, states and cities have implemented, or are considering implementing, moratoriums on bitcoin mining in their jurisdictions.
Such moratoriums would impede crypto asset mining and/or crypto asset use more broadly. For example, in November 2022, New York
imposed a two-year moratorium (that has since expired) on new proof-of-work mining permits at fossil fuel plants in the state.

Depending on how future regulations
are formulated and applied, such policies could have the potential to negatively affect the price of bitcoin, and, in turn, the
value of the Shares. Increased regulation and the corresponding compliance cost of these regulations could additionally result
in higher barriers to entry for bitcoin miners, which could increase the concentration of the hash rate, potentially having a negative
impact on the price of bitcoin.

Risks Related to Ether and PoS Mechanisms

Ethereum Network and ether
developments may impact ether prices

Moving from Proof-of-Work
to Proof-of-Stake Consensus Mechanism. In September 2022, the Ethereum Network moved from a proof-of-work to a PoS mechanism
during an upgrade known as “The Merge.” Unlike proof-of-work, in which miners expend computational resources to compete
to propose blocks of transactions and be rewarded coins in proportion to the number of computational resources expended, in PoS,
validators pledge or “stake” coins to compete to be randomly selected to validate transactions and be rewarded coins
in proportion to the total amount of coins staked. Any malicious activity, such as proposing multiple blocks at the same validation
time, voting on two different versions of the consensual chain or otherwise violating protocol rules, results in the forfeiture
or “slashing” of a portion of the staked coins.

Due to the absence of employed
computation resources, PoS is viewed as more energy efficient than proof-of-work. In addition, PoS allows for the implementation
of scaling solutions such as sharding, which parallelizes transaction registry and code execution in the network and aims to increase
speeds and reduce fees.

Ethereum Upgrades. Since
the transition to PoS, Ethereum experienced the successful activation of three other upgrades: the Shapella upgrade, Duncan upgrade,
and Pectra upgrade. While the activations of the first three upgrades in the Ethereum 2.0 roadmap have been successful and widely
accepted by the Ethereum community, the possibility exists that the full implementation of Ethereum 2.0 may never be achieved,
or may never achieve its goals. There is no guarantee that the Ethereum community will fully embrace forthcoming upgrades planned
for Ethereum 2.0, and the new protocol may never fully scale, which may have a negative impact on the market value of ether, and
consequently the NAV of the Fund.

The Ethereum Network is still
in the process of developing and making significant decisions that will affect policies that govern the supply and issuance of
ether as well as other Ethereum Network protocols. For example, the Ethereum Network has previously reduced the quantity of ether
rewarded per block and may make further reductions and additional changes in the future. If the Ethereum Network does not successfully
develop its policies on supply and issuance, or does so in a manner that is not attractive to network participants, there may not
be sufficient support for such network, which could lead to a decline in the price of ether. Moreover, because crypto assets, including
ether, have been in existence for a short period of time and are continuing to develop, there may be additional risks in the future
that are impossible to predict as of the date of this prospectus.

Effective limits on ether
supply through the PoS mechanism and gas fee burning mechanism may impact ether prices

The rate at which new ether
is issued and put into circulation is expected to vary. The Ethereum Network has no formal cap on the total supply of ether. The
Ethereum Network does, however, feature several mechanisms that, individually and in aggregate, have the effect of limiting the
total supply of ether outstanding. These mechanisms are sometimes referred to collectively as the “Ethereum Triple Halving.”

As a result of the Merge, where
the Ethereum Network moved from a proof-of-work to a PoS mechanism under Ethereum 2.0, the rate of issuance is greatly reduced.
Under proof-of-work, miners expend computational resources to compete to validate transactions and are rewarded coins in proportion
to the amount of computational resources expended, which resulted in comparably more new tokens rewarded. By contrast, under PoS,
validators risk or “stake” coins to compete to be randomly selected to validate transactions and are rewarded coins
in proportion to the amount of coins staked, which results in comparably fewer new tokens rewarded.

Ethereum’s move from
proof-of-work to PoS reduces issuance, and ether that is staked is non-transferable until withdrawn via the protocol’s exit/withdrawal
queue, which temporarily lowers immediately tradable (liquid) supply, though liquid-staking tokens can remain tradable. Additionally,
the supply of ether is limited as a result of the deflationary gas fee burning mechanism introduced by Ethereum Improvement Proposal
1559 (EIP 1559) in August 2021 to reform the Ethereum gas fee market. EIP 1559 split of fees into two components: the base fee
(calculated depending on the network activity involved) and the tip. When ether is issued to pay the base fee, it is removed from
circulation, or “burnt,” and the tip is paid to validators. As a result of this fee burning mechanism, the overall
supply of ether decreases as more ether are destroyed through the fee burn. Since the fee burning depends on the network activity,
the more the transactions on the Ethereum Network, the more ether is burned and the lower the issuance. This also has the effect
of reducing the incentives for validators to validate transactions with higher gas fees, since those validators would only receive
the tip and not base fees. Frequently, the ether supply has been deflationary over a 24-hour period as a result of the burn mechanism.
Material declines in the issuance of ether may discourage existing and future validators from serving as such, and adversely impact
the Ethereum Network’s adoption or the price of ether. Any disruption of validation on the Ethereum Network could interfere
with network operations and cause the Ethereum Network to be less attractive to users and application developers than competing
blockchain networks, which could cause the price of ether to decrease.

The ongoing development
of smart contracts, including those relating to DeFi applications, may result in problems that could reduce the demand for ether
or cause a wider loss of confidence in the Ethereum Network, either of which could have an adverse impact on the value of ether

Smart contracts are programs
that run on the Ethereum Network and execute automatically when certain conditions are met. Since smart contracts typically cannot
be stopped or reversed, vulnerabilities in their programming can have damaging effects. For example, in 2016, a vulnerability in
the smart contracts underlying “The DAO” on Ethereum enabled a hacker to steal approximately $60 million in ether,
leading to a major hard fork and a 35% drop in ether’s price. Subsequent years saw additional smart contract issues, such
as multi-signature wallet vulnerabilities and bugs in ERC20 tokens, resulting in tens or hundreds of millions in losses or frozen
funds. Major flaws have also caused disruptions to platforms like MakerDAO and exploited bridges and DeFi protocols, with attackers
syphoning billions of dollars in assets. Such incidents highlight how problems in smart contract development or deployment can
negatively impact the value of ether.