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

Chunk 34 of 62
Word Count: 1483
Character Count: 9053

Document Content:

in the Securities Act, the Exchange Act, and the Investment Company Act. Crypto assets as such do not appear in any of these lists, although each list includes the terms “investment contract” and “note,” and the SEC has typically analyzed whether a particular crypto asset is a security by reference to whether it meets the tests developed by the federal courts interpreting these terms, known as the Howey and Reves tests, respectively. For many crypto assets, whether or not the Howey or Reves tests are met is difficult to resolve definitively, and substantial legal arguments can often be made both in favor of and against a particular crypto asset qualifying as a security under one or both of the Howey and Reves tests. Adding to the complexity, the SEC staff has indicated that the security status of a particular crypto asset can change over time as the relevant facts evolve.

As part of determining whether
a crypto asset is a security for purposes of the federal securities laws, the Sponsor considers a number of factors, including
the various definitions of “security” under the federal securities laws, as well as SEC guidance and enforcement actions.
The Sponsor may also refer to the inclusion of a crypto asset in the Index since the eligibility rules of the FTSE Crypto US Listed
Index state that Index Constituents must meet the generic listing standards that require that the asset be a commodity. Through
this process the Sponsor believes that it is applying the proper legal standards in determining that the Eligible Assets are not
securities. In light of these uncertainties and the fact-based nature of the analysis, the Sponsor acknowledges that an Eligible
Asset may in the future be found by the SEC or a federal court to be a security notwithstanding the Sponsor’s prior conclusion;
and the Sponsor’s prior conclusion, even if reasonable under the circumstances and made in good faith, would not preclude
legal or regulatory action based on the presence of a security.

Any enforcement action by
the SEC or a state securities regulator asserting that any of the Eligible Assets is a security or is being offered and sold as
a security, or a court decision, to that effect would be expected to have an immediate material adverse impact on the trading value
of such crypto asset, as well as the Shares. The Fund may be required to liquidate or be subject to regulatory action. The value
of such crypto asset may significantly decline because the business models behind most crypto assets are incompatible with regulations
applying to transactions in securities. If a crypto asset is determined or asserted to be a security, it is likely to become difficult
or impossible for the crypto asset to be traded, cleared or custodied in the United States through the same channels used by non-security
crypto assets, which in addition to materially and adversely affecting the trading value of the crypto asset is likely to significantly
impact its liquidity and market participants’ ability to convert the crypto asset into U.S. dollars.

In addition, if crypto assets
are determined to be securities, the Fund could be considered an unregistered “investment company” under SEC rules,
which could necessitate the Fund’s liquidation. In this case, the Fund and the Sponsor may be deemed to have participated
in an illegal offering of securities and there is no guarantee that the Sponsor will be able to register the Fund under the Investment
Company Act at such time or take such other actions as may be necessary to ensure the Fund’s activities comply with applicable
law, which could force the Sponsor to liquidate the Fund.

The Sponsor may terminate
and liquidate the Fund if the Sponsor determines certain crypto assets critical to the performance Fund are securities under the
federal securities laws, whether that determination is initially made by the Sponsor itself, or because the SEC or a federal court
subsequently makes that determination. Moreover, whether or not the Sponsor or the Fund were subject to additional regulatory requirements
as a result of any SEC or federal court determination that its assets include securities, the Sponsor may nevertheless decide to
terminate the Fund, in order, if possible, to liquidate the Fund’s assets while a liquid market still exists.

Because the Fund is actively-managed,
the Sponsor may determine to liquidate the particular asset(s) that may be subject to a change in classification and continue with
other Eligible Assets. If the Sponsor believes there to be good faith grounds to conclude that there are sufficient Eligible Assets
to carry out its objective that are not securities, the Sponsor does not intend to dissolve the Fund on the basis that a particular
crypto asset could at some future point be determined to be a security.

A determination that
the Eligible Assets is not a commodity under the CEA may adversely affect the value of the Shares, and result in potentially extraordinary,
nonrecurring expenses to, or termination of, the Fund

The SEC’s release
on generic listing standards for crypto exchange-traded products specifically notes that the generic listing standards apply to
a trust that holds “one or more commodities or commodity-based assets”, and states that the term “commodity”
means any commodity as defined in Section 1a(9) of the CEA that is not an “excluded commodity” under Section 1a(19)
of the CEA. Accordingly, the Fund requires that any Eligible Asset be a “commodity.”

In determining whether a
crypto asset is a commodity and is not an “excluded commodity,” the Sponsor will begin by referencing the definitions
of commodity and excluded commodity under the CEA, and the definition of a “security” under the federal securities
laws, and considers interpretative materials such as rules, caselaw, guidance, and enforcement actions. The Sponsor may also classify
a crypto asset to be a commodity if it meets the following criteria:

●	it is fungible and

●	it is not presently a security under federal securities laws or it is either presently traded
in futures contracts that are not subject to the jurisdiction of the SEC, or could be traded in such contracts in the future.

In the event a crypto asset
is found to be a commodity under the CEA and to not be an excluded commodity under the CEA, the Fund will then apply the asset
eligibility criteria discussed herein to determine whether the crypto asset is an Eligible Asset.

The Sponsor acknowledges
that one or more crypto assets may in the future be found by the CFTC or a federal court to not be a commodity or to be an excluded
commodity under the CEA notwithstanding the Sponsor’s prior classification. Even if the Sponsor’s prior classification
was reasonable under the circumstances and made in good faith, the Fund and Sponsor may nevertheless be subject to legal or regulatory
action. Because the Fund is actively-managed, the Sponsor may determine to liquidate the particular asset(s) that may be subject
to a change in classification and continue the Fund with other Eligible Assets. The Sponsor may terminate and liquidate the Fund
if the Sponsor determines certain crypto assets critical to the performance Fund do not meet the regulatory requirements.

The lack of regulation
of the crypto asset market causes vulnerabilities to the markets and may impact prices

The Eligible Assets, the
Eligible Asset Networks and the crypto asset trading platforms are relatively new and, in many cases, either unregulated or not
in compliance with some or all of the applicable laws and regulations. As a result of this lack of regulation, individuals, or
groups may engage in insider trading, fraud or market manipulation with respect to the Eligible Assets. Such manipulation could
cause investors in the Eligible Assets to lose money, possibly the entire value of their investments. Over the past several years,
a number of crypto platforms have been closed due to fraud, failure or security breaches. The nature of the assets held at crypto
platforms make them appealing targets for hackers and a number of crypto platforms have been victims of cybercrimes and other fraudulent
activity. These activities have caused significant, in some cases total, losses for crypto asset investors. Investors in crypto
assets may have little or no recourse should such theft, fraud or manipulation occur. There is no central registry showing which
individuals or entities own crypto assets or the quantity of crypto assets that is owned by any particular person or entity. There
are no regulations in place that would prevent a large holder of crypto assets or a group of holders from selling their crypto
assets, which could depress the price of such assets, or otherwise attempting to manipulate the price of such crypto assets or
their networks. Events that reduce user confidence in the Eligible Assets, the Eligible Asset Networks and the fairness of crypto
platforms could have a negative impact on the price of the Eligible Assets and the value of an investment in the Fund.