Franklin XRP Trust

The Franklin XRP Trust operates within the digital asset industry, specifically focused on providing investment exposure to XRP, a digital asset. The filing does not disclose the overall market size or growth rate of the digital asset industry. Key structural forces shaping competition include the extreme volatility of digital asset prices, the evolving regulatory landscape, and the technological risks associated with blockchain networks such as the XRP Ledger. The Trust is a passive investment vehicle that seeks to reflect the performance of the price of XRP before expenses, and it is not a leveraged product nor does it utilize derivatives.

The filing does not name any primary competitors or provide any market share data. The Trust's competitive positioning is implied through its design to remove obstacles associated with direct investment in XRP, such as the complexities of managing wallets and private keys, by offering Shares that trade on a national securities exchange. The Sponsor, Franklin Holdings, LLC, is an affiliate of Franklin Resources, Inc., and the Marketing Agent is Franklin Distributors, LLC, both of which are affiliates of the Sponsor.

The Trust generates revenue solely through the Sponsor's Fee, which is an annual rate of 0.19% ¹ of the daily net asset value of the Fund. This is a recurring fee, accrued daily and paid at least quarterly in arrears in U.S. dollars. The Fund does not have any transactional income from active management, as it is a passive vehicle. The primary customer segments are institutional investors who act as Authorized Participants, purchasing and redeeming Creation Units of 50,000 ² Shares. Individual investors can then buy and sell Shares on the NYSE Arca exchange under the ticker symbol XRPZ ³.

The Fund's sole product is the Franklin XRP ETF, which issues Shares representing fractional undivided beneficial interests in the net assets of the Fund. The Fund's assets consist primarily of XRP held by the XRP Custodian, Coinbase Custody Trust Company, LLC, and cash. The XRP is held in two types of accounts: a Vault Balance in cold storage (offline) for security, and a Trading Balance with the Prime Broker, Coinbase Inc., for operational purposes related to creations, redemptions, and paying expenses. The Fund's investment objective is to reflect generally the performance of the price of XRP before payment of the Fund's expenses and liabilities.

The Fund's only ordinary recurring expense is the Sponsor's Fee at an annual rate of 0.19% ⁴ of daily net asset value. The Sponsor has agreed to assume ordinary fees and expenses, including those of the Administrator, Marketing Agent, Custodians, and Trustee, as well as up to $500,000 ⁵ per annum in ordinary legal fees and expenses. For a period through May 31, 2026 ⁶, the Sponsor has agreed to waive the entire Sponsor's Fee on the first $5.0 billion ⁷ of the Fund's assets. For the period from November 24, 2025 (commencement of operations) to March 31, 2026, the Fund recognized a Sponsor's Fee of $142,056 ⁸, which was fully offset by a waiver and reimbursement of $142,056 ⁹, resulting in a net Sponsor's Fee payable of $0 ¹⁰.

The Trust was formed as a Delaware statutory trust on February 28, 2025 ¹¹. The Fund's Shares began trading on the NYSE Arca, Inc. on November 24, 2025 ¹². As of June 9, 2026, the Fund had 19,600,000 ¹³ outstanding shares. The Fund has entered into a Master Purchase and Sale Agreement for Digital Assets with Jane Street and a Liquidity Provider Agreement with Virtu Financial Singapore Pte., Ltd. to serve as XRP Trading Counterparties. As of March 31, 2026, Virtu Americas LLC and Jane Street Capital, LLC have each executed an Authorized Participant Agreement and serve as Authorized Participants of the Fund.

For the period from November 24, 2025 (commencement of operations) to March 31, 2026, the Fund recognized total Sponsor's Fee of $142,056 ¹⁴, which was fully waived, resulting in no net fee expense. The Fund's financial performance is entirely dependent on the price of XRP, which experienced significant volatility during the period. Over the past year ending March 31, 2026, XRP's highest price was $3.65 ¹⁵ on July 18, 2025, and its lowest price was $1.21 ¹⁶ on February 5, 2026. The Fund's net asset value per Share is calculated daily based on the CF Benchmarks Index, which aggregates trade flow from constituent platforms including Bitstamp, Coinbase, Kraken, LMAX Digital, and Crypto.com.

The Fund's primary growth vector is the continued adoption of XRP as a digital asset and the use of the Shares as a convenient, cost-effective alternative to direct investment in XRP. The filing discusses the potential for the Fund to benefit from the removal of obstacles associated with direct XRP investment, such as managing wallets and private keys. The Sponsor may, in its sole discretion, add or terminate XRP Custodians, prime brokers, or Authorized Participants at any time, which could support operational growth. The Fund may also add additional XRP Trading Counterparties in the future, subject to the discretion of the Sponsor.

The filing does not discuss any specific new products, new markets, or geographic expansion plans beyond the current structure of the Fund.

The Fund's margin and cost outlook is defined by its fee structure. The Sponsor's Fee is fixed at an annual rate of 0.19% ¹⁷ of daily net asset value. The Sponsor has agreed to assume ordinary fees and expenses, including up to $500,000 ¹⁸ per annum in ordinary legal fees and expenses. The Sponsor may, at its sole discretion, waive all or a portion of the Sponsor's Fee for stated periods, as it did for the period through May 31, 2026 ¹⁹ on the first $5.0 billion ²⁰ of assets. The Fund is responsible for extraordinary expenses, including legal fees in excess of $500,000 ²¹ per year, which the Sponsor may choose to assume in its sole discretion.

The Fund's operational outlook is centered on its reliance on key service providers: the XRP Custodian (Coinbase Custody Trust Company, LLC), the Prime Broker (Coinbase Inc.), the Cash Custodian and Administrator (The Bank of New York Mellon), and the Trustee (CSC Delaware Trust Company). The Fund's ability to create and redeem Shares depends on the continuous operation of these providers and the XRP Ledger. The Fund uses a regular end-of-day sweep process to move XRP from the Trading Balance to the Vault Balance for cold storage. The Fund may also utilize Trade Credits from a Trade Credit Lender to facilitate same-day settlement of XRP transactions.

The filing does not specify any R&D spending levels, capital expenditure plans, or share repurchase authorization amounts. The Fund's capital allocation is limited to holding XRP and cash to meet its investment objective and paying expenses. The Fund does not pay dividends. The Sponsor paid the costs of the Trust's and the Fund's organization and initial offering costs and may not seek reimbursement.

The filing identifies several headwinds and constraints. The trading prices of XRP have experienced extreme volatility, with a peak of $3.65 ²² and a low of $1.21 ²³ over the past year ending March 31, 2026. The digital asset markets are subject to cybersecurity events, fraud, and manipulation, as evidenced by the 2022 Events involving FTX, Celsius Network, and others, and the October 2025 Flash Crash, which saw XRP lose approximately 41% ²⁴ of its value in mid-October 2025. The regulatory environment for digital assets in the U.S. is uncertain, and adverse legislative or regulatory developments could significantly harm the value of XRP or the Shares.

The filing does not explicitly flag any additional structural headwinds or execution risks beyond those already described in the risk factors.

The value of the Shares is directly tied to the price of XRP, which has experienced extreme volatility, including a peak of $3.65 ²⁵ and a low of $1.21 ²⁶ over the past year ending March 31, 2026, and a drawdown of over 83% ²⁷ from its April 2021 peak to its June 2022 low. The digital asset markets are susceptible to systemic events, such as the October 2025 Flash Crash, during which XRP lost approximately 41% ²⁸ of its value in a single day, and the 2022 Events involving FTX and other entities, which led to a loss of confidence and extreme price volatility. The Fund's XRP held in the Trading Balance with the Prime Broker is not held in segregated accounts and represents an omnibus claim on the Prime Broker's assets, creating a risk of loss if the Prime Broker becomes insolvent. The XRP Custodian's liability is limited to the greater of fees paid in the prior 12 months or the value of assets in the custodial account, with a cap of $100,000,000 ²⁹ per cold storage address, and Coinbase's indemnity obligations under the Prime Broker Agreement are limited to $2,000,000 ³⁰ in the aggregate. The regulatory environment for digital assets in the U.S. remains uncertain, and adverse legislative or regulatory developments could ban or restrict the use of XRP, harming the value of the Shares.

The overall tone of the filing is factual and descriptive, focusing on the structure, operations, and risks of the Trust and the Fund. The Sponsor, Franklin Holdings, LLC, emphasizes that the Fund is a passive investment vehicle designed to provide a cost-effective alternative to direct investment in XRP. Key strategic priorities include maintaining the Fund's passive investment objective, ensuring the safekeeping of XRP through cold storage with the XRP Custodian, and facilitating the creation and redemption process through Authorized Participants. The Sponsor has prioritized waiving its entire fee on the first $5.0 billion ³¹ of the Fund's assets through May 31, 2026 ³² to encourage asset growth.