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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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.