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: 2026-05-15
Accession Number: 0001999371-26-010860
Exchange: 
SIC Code: 6221
SIC Description: Commodity Contracts Brokers & Dealers
URL: https://www.sec.gov/Archives/edgar/data/2089855/000199937126010860/tknz-s1a_051526.htm

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Assets trade may be susceptible to “front-running,” which refers to the process when a market participant uses technology or market advantage to get prior knowledge of upcoming transactions. Front-running is a frequent activity on centralized as well as decentralized crypto platforms. By using bots functioning on a millisecond-scale timeframe, bad actors are able to take advantage of the forthcoming price movement and make economic gains at the cost of those who had initiated these transactions. The objective of a front runner is to buy crypto assets at a low price and later sell them at a higher price while simultaneously exiting the position. Front-running happens via manipulations of gas prices or timestamps, also known as slow matching. To the extent that front-running occurs, it may result in investor frustrations and concerns as to the price integrity of crypto platforms and crypto assets more generally. Networked systems are vulnerable to attacks

All networked systems are vulnerable
to various kinds of attacks. As with any computer network, the Eligible Asset Networks contain certain flaws. For example, the Bitcoin
Network is currently vulnerable to a “51% attack” where, if a mining pool were to gain control of more than 50% of the “hash”
rate, or the amount of computing and process power being contributed to the network through mining, a malicious actor would be able to
gain full control of the network and the ability to manipulate the blockchain. To the extent that such malicious actor or botnet did not
yield its control of the processing power on the network, or the network community did not reject the fraudulent blocks as malicious,
reversing any changes made to the blockchain may not be possible.

In addition, in May 2019, the Bitcoin
Cash network, a proof-of-work network, experienced a >50% attack when two large mining pools reversed a series of transactions in order
to stop an unknown miner from taking advantage of a flaw in a recent Bitcoin Cash protocol upgrade.

The Ethereum Network also remains
vulnerable to various types of attacks and coordinated adverse activity. In particular, following the “Merge,” where the Ethereum
Network moved from a proof-of-work to a PoS mechanism under Ethereum 2.0 and the switch to PoS validation, the Ethereum Network is currently
vulnerable to several types of attacks, including:

(i) “>33% attack” where,
if a malicious actor, validator, botnet (a volunteer or hacked collection of computers controlled by networked software coordinating the
actions of the computers) or group of validators acting in concert were to gain control of more than 33% of the total staked ether on
the Ethereum Network, a malicious actor could temporarily impede or delay block confirmation or even cause a temporary fork in the blockchain.
This is designed to be a temporary risk, as the Ethereum Network’s inactivity leak would be expected to eventually penalize the
attacker enough for the chain to finalize again (i.e., the honest majority would be expected to reclaim a 2/3rd stake as the attacker’s
stake is penalized). Moreover, it is believed that a 33% attack would not be sufficient to allow a malicious actor to engage in double-spending
or fraudulent block propagation. Even without 33% control, however, a malicious actor or botnet could create a flood of transactions in
order to slow down the Ethereum Network.

(ii) “>50% attack”
where, if a malicious actor, validator, botnet or group of validators acting in concert were to gain control of more than 50% of the total
staked ether on the Ethereum Network, a malicious actor would be able to gain full control of the Ethereum Network and the ability to
manipulate future transactions on the blockchain, including censoring transactions, double-spending and fraudulent block propagation,
potentially for an extended period or even permanently. In theory, the minority non-attackers might reach social consensus to reject blocks
proposed by the malicious majority attacker, reducing the attacker’s ability to engage in malicious activity, but there can be no
assurance this would happen or that non-attackers would be able to coordinate effectively. Although the malicious actor or botnet would
not be able to generate new tokens or transactions using such control, it could “double-spend” its own tokens (i.e., spend
the same tokens in more than one transaction) and prevent the confirmation of other users’ transactions for so long as it maintained
control (over 50%). To the extent that such malicious actor or botnet did not yield its control of the validating power on the Ethereum
Network or the Ethereum community did not reject the fraudulent blocks as malicious, reversing any changes made to the Ethereum Blockchain
may not be possible.

(iii) “>66% attack”
where, if a malicious actor, validator, botnet or group of validators acting in concert were to gain control of more than 66% of the total
staked ether on the Ethereum Network, a malicious actor could permanently and irreversibly manipulate the blockchain, including censorship,
double-spending and fraudulent block propagation. The attacker could finalize their preferred chain without any consideration for the
votes of other stakers and could also revert finalized blocks.

If a malicious actor or botnet obtains
control of a significant percentage of the validating power, or otherwise obtains control over an Eligible Asset Network through its influence
over core developers or otherwise, such actor or botnet could manipulate the network.

Such concentration of validating
power may also arise from activities such as “liquid staking,” a solution that permits holders of certain crypto assets
to deposit them with a liquid staking application, which stakes the deposited crypto assets while issuing the holder a transferable
token in exchange. Such liquid staking applications pose centralization concerns — for example, a single liquid staking
application has reportedly controlled around or in excess of 33% of the total staked ether on the Ethereum Network. In this regard,
see “Liquid staking applications pose centralization concerns, and a single liquid staking application has reportedly
controlled around or in excess of 33% of the total staked ether on the Ethereum Network.”

The attack of a malicious actor may
have an adverse effect on the Eligible Asset Networks and, therefore, on the value of an investment in the Fund.

Crypto assets are subject to
cybersecurity risk

As crypto assets, the Eligible Assets
are subject to cybersecurity risks, including the risk that malicious actors will exploit flaws in its code or structure that will allow
them to, among other things, steal crypto assets held by others, control the blockchain, steal personally identifying information, or
issue significant amounts of assets in contravention of their protocols. The occurrence of any of these events is likely to have a significant
adverse impact on the price and liquidity of the Eligible Assets and therefore the value of an investment in the Fund. Additionally, the
Eligible Asset Networks’ functionality relies on the Internet. A significant disruption of Internet connectivity affecting large
numbers of users or geographic areas could impede the functionality of the Eligible Assets. Any technical disruptions or regulatory limitations
that affect Internet access may have an adverse effect on the Eligible Asset Networks, the price of the Eligible Assets, and the value
of an investment in the Fund.

If the source code or cryptography
underlying an Eligible Asset held by the Fund proves to be flawed or ineffective, malicious actors may be able to steal the Fund’s
assets. In the past, flaws in the source code for crypto assets have been exposed and exploited, including those that exposed users’
personal information and/or resulted in the theft of users’ crypto assets. Several errors and defects have been publicly found and
corrected, including those that disabled some functionality for users and exposed users’ personal information. Discovery of flaws
in, or exploitations of, the source code that allow malicious actors to take or create money in contravention of known network rules have
occurred. In addition, the cryptography underlying a crypto asset could prove to be flawed or ineffective, or developments in mathematics
and/or technology, including advances in digital computing, algebraic geometry and quantum computing, could result in such cryptography
becoming ineffective. In any of these circumstances, if the crypto asset held by the Fund is affected, a malicious actor may be able to
steal the Fund’s crypto assets, which would adversely affect an investment in the Shares. Even if the Fund did not hold the affected
crypto asset, any reduction in confidence in the source code or cryptography underlying asset generally could negatively affect the demand
for the Eligible Assets and therefore adversely affect an investment in the Shares.

Crypto assets are subject to
potential hacking, risk of theft of private keys, and loss of access risks

Due to the nature of private keys,
the Eligible Assets transactions are irrevocable and incorrectly transferred or stolen crypto assets may be irretrievable, and as a result,
any incorrectly executed transaction could adversely affect the price and liquidity of the Eligible Assets, which may indirectly affect
the price of the Fund’s Shares.