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: 2026-02-11
Accession Number: 0001999371-26-003054
Exchange: 
SIC Code: 6221
SIC Description: Commodity Contracts Brokers & Dealers
URL: https://www.sec.gov/Archives/edgar/data/2089855/000199937126003054/active-s1a_021126.htm

Chunk 37 of 61
Word Count: 1412
Character Count: 8896

Document Content:

ahead of the Fund) or free-riding (mirroring the Fund’s strategies). As an actively-managed Fund, the Fund may engage in frequent trading of its portfolio assets in pursuing its investment objective. Generally, the higher the portfolio turnover rate, the higher the overall transaction costs and the greater the potential impact on the fund’s total return. High portfolio turnover results in increased transaction costs to the Fund related to the sale of holdings and reinvestment of the proceeds in other holdings. The Fund’s portfolio turnover rate may vary from year to year due to fluctuations in the levels of shareholder purchase and redemption activity, shifts in market conditions or evaluations of assets, and/or changes in the overall investment outlook. Increased portfolio reallocations and frequent portfolio turnover also may increase the possibility of tax consequences in taxable accounts. Fund assets may be depleted if investment performance does not exceed Fund fees and expenses

Over time, the
Fund’s assets could be depleted if investment performance does not exceed the Management Fee and Fund expenses, see
“Business of the Fund – Fees and Expenses.” For example, creation with cash may cause the Fund to incur
certain costs including brokerage commissions and redemptions of Creation Units with cash may result in the recognition of
taxable gains or losses that the Fund. The Fund may be required to indemnify the Sponsor, and the Fund and/or the Sponsor
may be required to indemnify the Fund’s service providers under certain circumstances. Unless such expenses are
specifically attributable the Fund or arise out of the Fund’s operations, any such expenses will be allocated by the
Sponsor using a pro rata methodology that allocates certain Fund expenses to the Fund. Expenses paid by Sponsor are not
subject to any caps or limits.

Investors may not be able
to buy or sell Shares of the Fund through their current brokerages

Because of volatility and other
risks associated with crypto-related investments, brokerage firms may limit or not permit trading in such investments. Because
of current or future brokerage policies regarding crypto-linked securities, investors could have difficulty selling Shares through
their brokerage and potentially face restrictions when or how they could trade their Shares.

The Fund may have credit
risk, operational risk, and fraud risk buying or selling crypto assets

The Fund may transact with
crypto trading platforms and over-the-counter crypto market makers. The Fund may take on credit risk when it trades crypto assets,
and its contractual rights with respect to such transactions may be limited. It is possible that, through computer or human error,
or through theft or criminal action, the Fund’s assets could be transferred in incorrect amounts or to unauthorized third
parties. To the extent that the Fund is unable to seek a corrective transaction with such third party or is incapable of identifying
the third party which has received the Fund’s crypto assets (through error or theft), the Fund will be unable to recover
incorrectly transferred assets, and such losses will negatively impact the Fund. In the event the Fund is unable to recover any
incorrectly transferred assets, the Fund will not be liable to the Shareholders for any such losses.

If a custodial agreement
or an Authorized Participant agreement is terminated or a Custodian or an Authorized Participant becomes insolvent or fails to
provide services as required, the Sponsor may need to find and appoint a replacement custodian or Authorized Participant, which
could pose a challenge to the safekeeping of the Fund’s assets, the Fund’s ability to create and redeem shares and
the Fund’s ability to continue to operate may be adversely affected

The Fund is dependent on
the Crypto Custodian to operate. The Crypto Custodian performs essential functions in terms of safekeeping the Fund’s crypto
assets in the custodial wallets. If a Crypto Custodian fails to perform the functions it performs for the Fund, the Fund may be
unable to operate or create or redeem Creation Units, which could force the Fund to liquidate or adversely affect the price of
the Shares.

If any Crypto Custodian
were to be required or choose, as a result of a regulatory action (including, for example, the litigation initiated by the SEC),
to restrict or curtail the services it offers, it could negatively affect the Fund’s ability to operate or process creations
or redemptions of Creation Units, which could force the Fund to liquidate or adversely affect the price of the Shares.

Any prioritization by the Crypto
Custodian away from the Fund could result in inadequate attention, delays, or comparatively unfavorable commercial terms for the
Fund. Such actions could harm the Fund’s operations, reduce the efficiency of its trading activities, and negatively affect
the value of the Shares.

Transferring maintenance
responsibilities of the Fund’s account at the Crypto Custodian to one or more other custodians will likely be complex and
could subject the Fund’s assets to the risk of loss during the transfer, which could have a negative impact on the performance
of the Shares or result in loss of the Fund’s assets. Also, the Sponsor may not be able to find a party willing to serve
as the custodian of the Fund’s assets or on the same terms as its agreements with the Crypto Custodian or at all. To the
extent that the Sponsor is not able to find a suitable party willing to serve as the custodian, the Sponsor may be required to
terminate the Fund and liquidate the Fund’s crypto assets. In addition, to the extent that the Sponsor finds a suitable party
but must enter into a modified custodial agreement that is less favorable for the Fund, the value of the Shares could be adversely
affected.

Moreover, the legal rights
of customers with respect to crypto assets held on their behalf by a third-party custodian, such as the Crypto Custodian, in insolvency
proceedings are currently uncertain. Also, if a Crypto Custodian becomes insolvent, suffers business failure, ceases business
operations, defaults on or fails to perform their obligations under their contractual agreements with the Fund, or abruptly discontinues
the services they provide to the Fund for any reason, the Fund’s operations including its creation and redemption processes
would be adversely affected.

Part of the Fund’s assets
are held in cash and cash equivalents with the Cash Custodian and other financial institutions, if applicable. The insolvency of
the Cash Custodian and any financial institution in which the Fund holds cash and cash equivalents could result in a substantial
loss of the Fund’s cash and cash equivalents.

Similarly, if an Authorized
Participant suffers insolvency, business failure or interruption, default, failure to perform, security breach or if an Authorized
Participant chooses not to participate in the creation and redemption process of the Fund, and the Fund is unable to engage replacement
Authorized Participants on commercially acceptable terms or at all, then the creation and redemption process of the Fund, the arbitrage
mechanism used to keep the Shares in line with the NAV and the Fund’s operations generally could be negatively affected.

Authorized Participants may
prioritize their resources and trading focus away from the Fund, particularly during periods of market stress or heightened volatility,
potentially reducing the liquidity and market efficiency of the Fund’s Shares. This withdrawal could adversely impact the
liquidity of the Shares, potentially leading to increased volatility, wider bid-ask spreads, and a deviation of the Share price
from its NAV, especially if the Fund fails to attract enough Authorized Participants willing to maintain a market in the Shares.
Such impacts could cause the Sponsor to halt or suspend the creation or redemption of Shares during such times, among other consequences.

The service providers
may not act in the best interest of the Fund and have limited liability

Service providers to the Fund,
including Custodians, do not owe fiduciary duties to the Fund or the Shareholders, are not required to act in their best interest and
could resign or be removed by Sponsor. The service providers, including custodians and security vendors, that the Fund employs or may
employ in the future are not trustees for, and owe no fiduciary duties to, the Fund or the Shareholders. In addition, service providers
employed by the Fund have no duty to continue to act as the custodians of the crypto assets held by the Fund.

Current or future service providers,
including Custodians and security vendors, can terminate their role as Custodian or security vendor for any reason whatsoever upon
the notice period provided under the relevant custody agreement. A service provider may also be terminated.