Developments Regarding XRP Relevant To 21Shares’ ETPs

Zurich - December 29, 2020 – In the U.S., the U.S. Securities and Exchange Commission (SEC) alleged that XRP had been illegally marketed to retail customers. As a result of this, XRP is affected by severe price developments and illiquidity.

On December 23, 2020, the Bitwise Select 10 Large Cap Crypto Index (BITS10), the Index serving as the Underlying for the 21Shares’ KEYS ETP, was reconstituted in accordance with the applicable Index Methodology. XRP was removed as an Underlying Component from the Index and the respective XRP were reallocated to the remaining Underlying Components as per the respective announcement.

On December 24, 2020, MV Index Solutions GmbH as the index administrator of the 21Shares Crypto Basket Index (HODL5), the Index serving as the Underlying for HODL, decided and announced in line with the applicable Index Guide that XRP be removed from the 21Shares Crypto Basket Index (HODL5) and, therefore, as an Underlying Component for HODL. The replacement Underlying Component will likely only be communicated on the Monthly Rebalance Date. Based on Condition 9.3 and Condition 18, the Issuer has exercised its discretion and, to protect Investors' interests, decided to sell the XRP and to invest the proceeds in Bitcoin (BTC) and Ethereum (ETH) currently serving as an Underlying Component (proportional to current allocations). Such proceeds will be invested in the replacement Underlying Component as soon as known in line with ordinary rebalancing procedures. time period, to remove XRP from the basket following the announcement of the Index Provider.

“As part of our quick intervention, the board was able to remove XRP using its broad network of liquidity providers in order to liquidate its XRP position with the ultimate aim of reducing market impact and protecting investors to which it was able to achieve”, said Hany Rashwan CEO and Chairman of the board of directors of 21Shares, "thanks to our trusted partners, our main objective remains to replicate accurately our index and we were able to successfully conduct this ad hoc task despite the difficult trading conditions”.

The board of directors of 21Shares wishes to inform the market that it is also monitoring the situation in regard to AXRP, the single asset ETP tracking the underlying component XRP.

Affected ETPs:
HODL - 21Shares Crypto Basket ETP (CH0445689208)
KEYS - 21Shares Bitwise Select 10 ETP (CH0475986318)
AXRP - Single asset ETP in relation to price developments:21Shares XRP ETP (CH0454664043)