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

Chunk 59 of 66
Word Count: 1436
Character Count: 9109

Document Content:

is a factual determination. Under certain safe harbors in the Code, an investment trust whose activities consist of trading in stocks, securities, or commodities for its own account generally will not be considered to be engaged in a U.S. trade or business unless it is a dealer in such stocks, securities, or commodities. This safe harbor applies to investments in commodities only if the commodities are of a kind customarily dealt in on an organized commodity exchange and if the transaction is of a kind customarily consummated at such place. As noted above, there is limited authority on the U.S. federal income tax treatment of the crypto assets. Moreover, currently there is no guidance regarding whether and when engaging in staking might constitute a U.S. trade or business. Accordingly, there can be no assurance that the Fund will not be considered to be engaged in a U.S. trade or business.

In the event that the Fund’s
activities were considered to constitute a U.S. trade or business, the Fund would be required to withhold at the highest rate specified
in Code section 1 (currently 37%) on allocations of its income to non-corporate Non-U.S. Shareholders and the highest rate specified in
Code section 11(b) (currently 21%) on allocations of its income to corporate Non-U.S. Shareholders, when such income is distributed. Non-U.S.
Shareholders would also be subject to a 10% withholding tax on the consideration payable upon a sale or exchange of such Non-U.S. Shareholder’s
Shares unless an exception to withholding applies. In the case of a transfer made through a broker, the obligation to withhold will generally
be imposed on the transferor’s broker. A Non-U.S. Shareholder with ECI will generally be required to file a U.S. federal income
tax return, and the return will provide the Non-U.S. Shareholder with the mechanism to seek a refund of any withholding in excess of such
Shareholder’s actual U.S. federal income tax liability. Any amount withheld by the Fund will be treated as a distribution to the
Non-U.S. Shareholder to the extent possible. In some cases, the Fund may not be able to match the economic cost of satisfying its withholding
obligations to a particular Non-U.S. Shareholder, which may result in said cost being borne by the Fund, generally, and accordingly, by
all Shareholders.

If the Fund is not treated as engaged
in a U.S. trade or business, a Non-U.S. Shareholder may nevertheless be treated as having FDAP income, which would be subject to a 30%
withholding tax (possibly subject to reduction by treaty), with respect to some or all of its distributions from the Fund or its allocable
share of Fund U.S. source income. Amounts withheld on behalf of a Non-U.S. Shareholder will be treated as being distributed to such Shareholder.
If the Fund is not able to match the economic cost of satisfying its withholding obligation to a particular Non-U.S. Shareholder, said
cost may have to be borne by the Fund and accordingly by all Shareholders.

Gain from Sale of Shares

Gain from the sale or exchange of
Shares may be taxable to a Non-U.S. Shareholder if the Non-U.S. Shareholder is a nonresident alien individual who is present in the U.S.
for 183 days or more during the taxable year. In such case, the nonresident alien individual may be subject to a 30% withholding tax on
the amount of such individual’s gain. As discussed above, Non-U.S. Shareholders would also be subject to a 10% withholding tax on
the consideration payable upon a sale or exchange of such Non-U.S. Shareholder’s Shares unless an exception to withholding applies.

Branch Profits Tax on Corporate
Non-U.S. Shareholders

In addition to the taxes noted above,
any Non-U.S. Shareholders that are corporations may also be subject to an additional tax, the branch profits tax, at a rate of 30%. The
branch profits tax is imposed on a non-U.S. corporation’s dividend equivalent amount, which generally consists of the corporation’s
after-tax earnings and profits that are effectively connected with the corporation’s U.S. trade or business but are not reinvested
in a U.S. business. This tax may be reduced or eliminated by an income tax treaty between the United States and the country in which the
Non-U.S. Shareholder is a “qualified resident.”

Foreign Account Tax Compliance
Act

Legislation commonly referred to as
the Foreign Account Tax Compliance Act or “FATCA,” generally imposes a 30% U.S. withholding tax on payments of certain types
of income to foreign financial institutions that fail to enter into an agreement with the United States Treasury to report certain required
information with respect to accounts held by U.S. persons (or held by foreign entities that have U.S. persons as substantial owners).
The types of income subject to the withholding tax include U.S.-source interest and dividends and the gross proceeds from the sale of
any property that could produce U.S.-source interest or dividends. Proposed Treasury Regulations, however, generally eliminate withholding
under FATCA on gross proceeds. Taxpayers generally may rely on these proposed Treasury Regulations until final Treasury Regulations are
issued. The information required to be reported includes the identity and taxpayer identification number of each account holder that is
a U.S. person and transaction activity within the holder’s account. In addition, subject to certain exceptions, this legislation
also imposes a 30% U.S. withholding tax on payments to foreign entities that are not financial institutions unless the foreign entity
certifies that it does not have a greater than 10% U.S. owner or provides the withholding agent with identifying information on each greater
than 10% U.S. owner. Depending on the status of a Non-U.S. Shareholder and the status of the intermediaries through which it holds Shares,
a Non-U.S. Shareholder could be subject to this 30% U.S. withholding tax with respect to distributions on its Shares. Under certain circumstances,
a Non-U.S. Shareholder may be eligible for a refund or credit of such taxes.

Prospective Non-U.S. Shareholders
should consult their own tax advisor regarding these and other tax issues unique to Non-U.S. Shareholders.

Backup Withholding

The Fund may be required to withhold
U.S. federal income tax (backup withholding) from payments to: (1) any Shareholder who fails to furnish the Fund with his, her or its
correct taxpayer identification number or a certificate that the Shareholder is exempt from backup withholding, and (2) any Shareholder
with respect to whom the IRS notifies the Fund that the Shareholder is subject to backup withholding. Backup withholding is not an additional
tax and may be returned or credited against a taxpayer’s regular U.S. federal income tax liability if appropriate information is
provided to the IRS. The backup withholding rate is the fourth lowest rate applicable to individuals under Code section 1(c) (currently
24%) and may increase in future tax years.

Other Tax Considerations

In addition to U.S. federal income
taxes, a Shareholder may be subject to other taxes, such as state, local and foreign income taxes, unincorporated business taxes, business
franchise taxes, and estate, gift, inheritance or intangible taxes that may be imposed by the various jurisdictions in which the Fund
does business or owns property or where the Shareholder resides. Although an analysis of those various taxes is not presented here, each
prospective Shareholder should consider their potential impact on its investment in the Fund. It is each Shareholder’s responsibility
to file the appropriate U.S. federal, state, local, and foreign tax returns.

ERISA
AND RELATED CONSIDERATIONS

The Employee Retirement Income Security
Act of 1974, as amended and/or Section 4975 of the Internal Revenue Code of 1986, as amended (the “Code”) impose certain requirements
on: (i) employee benefit plans and certain other plans and arrangements, including individual retirement accounts and annuities,
Keogh plans and certain collective investment funds or insurance company general or separate accounts in which such plans or arrangements
are invested, that are subject to Title I of ERISA and/or Section 4975 of the Code (collectively, “Plans”); and (ii) persons
who are fiduciaries with respect to the investment of assets treated as “plan assets” within the meaning of U.S. Department
of Labor (the “DOL”) regulation 29 C.F.R. § 2510.3-101, as modified by Section 3(42) of ERISA (the “Plan Assets
Regulation”), of a Plan. Investments by Plans are subject to the fiduciary requirements and the applicability of prohibited transaction
restrictions under ERISA and the Code. It is anticipated that the Shares will constitute “publicly-held offered securities”
as defined in the Department of Labor Regulations § 2510.3-101(b)(2). Accordingly, Shares purchased by a Plan, and not the Plan’s
interest in the underlying DOT held in the Fund represented by the Shares, should be treated as assets of the Plan, for purposes of applying
the “fiduciary responsibility” and “prohibited transaction” rules of ERISA and the Code.