1. ORGANIZATION

 

The Franklin XRP Trust (the “Trust”) was formed as a Delaware statutory trust on February 28, 2025 and is governed by the provisions of an Amended and Restated Agreement and Declaration of Trust executed as of October 1, 2025 (the “Declaration of Trust”). The Trust, as registrant, is not registered as an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”) and is not a commodity pool for purposes of the Commodity Exchange Act (“CEA”). The accompanying combined financial statements relate to the Trust, as registrant, and the one series that it currently offers, the Franklin XRP ETF (the “Fund”), presented on a combined basis. Separate, series-level financial statements are provided for the Fund in another section of this report. The Trust had no operations prior to the commencement of operations of the Fund on November 24, 2025, other than matters relating to its organization and the registration of the Fund under the Securities Act of 1933, as amended (the “Securities Act”). The Sponsor of the Trust and the Fund (the “Sponsor”) is Franklin Holdings, LLC. The Sponsor is a Delaware limited liability company formed on July 21, 2021. The Sponsor is not subject to regulation by the U.S. Commodity Futures Trading Commission (“CFTC”) as a commodity pool operator or a commodity trading advisor with respect to the Fund. The Fund issues shares (the “Shares”), which represent units of fractional undivided beneficial interest in and ownership of the Fund. The Shares of the Fund are listed on the NYSE Arca, Inc. (the “Exchange”). The Shares were first listed for trading and the Fund commenced operations on November 24, 2025.

 

The Fund seeks to reflect generally the performance of the price of XRP before payment of the Fund's expenses and liabilities. The Shares are intended to offer a convenient means of making an investment similar to an investment in XRP relative to acquiring, holding and trading XRP directly on a peer-to-peer or other basis or via a digital asset platform. The Shares have been designed to remove obstacles associated with the complexities and operational burdens involved in a direct investment in XRP by providing an investment with a value that reflects the price of the XRP owned by the Fund at such time, less the Fund's expenses and liabilities. The Fund is not a proxy for a direct investment in XRP. Rather, the Shares are intended to provide a cost-effective alternative means of obtaining investment exposure through the securities markets that is similar to an investment in XRP. The Fund is a passive investment vehicle and is not a leveraged product. The Sponsor does not actively manage the XRP held by the Fund.

 

BNY Mellon Asset Servicing, a division of The Bank of New York Mellon, or “BNYM,” is the Fund’s Administrator (the “Administrator”) and Transfer Agent (the “Transfer Agent”). BNYM also serves as the custodian of the Fund’s cash (the “Cash Custodian”). The Administrator is generally responsible for the day-to-day administration of the Fund, including the calculation of the Fund’s net asset value (“NAV”) per Share. The XRP Custodian is responsible for safekeeping the XRP owned by the Fund. The XRP Custodian is Coinbase Custody Trust Company, LLC (“Coinbase Custody”). Coinbase Inc., an affiliate of the XRP Custodian, is the Fund’s Prime Broker. CSC Delaware Trust Company, a subsidiary of the Corporation Service Company (the “Trustee”), is the sole trustee of the Trust. Franklin Distributors, LLC is the marketing agent of the Fund (the “Marketing Agent”).

 

The Fund issues and redeems Shares only to certain eligible financial institutions called Authorized Participants and only in one or more blocks of 50,000 Shares (“Creation Units”). Creation Units are directly redeemable only by Authorized Participants. Creation Units are issued and redeemed in exchange for XRP and/or cash. The Shares are listed and traded on the Exchange under the ticker symbol “XRPZ.” The market price of the Shares may be different than the Fund’s NAV per Share. The Fund issues and redeems Shares in Creation Units on a continuous basis at the applicable NAV per Share on the transaction order date. Except when aggregated in Creation Units, the Shares are not redeemable securities.

 

The Trust is an “emerging growth company” as that term is defined in the Jumpstart Our Business Startups Act ("JOBS Act"), subject to reduced public company reporting requirements under U.S. federal securities laws.

 

On October 15, 2025, Franklin Resources Inc. (the “Seed Capital Investor”), an affiliate of the Sponsor, subject to conditions, purchased 4,000 Shares at a per-Share price equal to $25.00 (the “Initial Seed Shares”). Delivery of the Initial Seed Shares was made on October 15, 2025. Total proceeds to the Fund from the sale of the Initial Seed Shares was $100,000. On November 18, 2025, the Initial Seed Shares were redeemed for $100,000 and the Seed Capital Investor purchased two creation units in a cash transaction comprised of a total of 100,000 Shares at a per-Share price based on 543,060.34 XRP per Creation Unit (or 10.86 XRP per Share), for a total of 1,086,120.68 XRP (the "Seed Creation Units"). The cash proceeds to the Fund from the sale of the Seed Creation Units were used by the Fund to purchase 1,086,120.68 XRP at the price of $2.0458 per XRP on November 19, 2025 (exclusive of transaction and other costs incurred in connection with the conversion of the cash proceeds to XRP, which were paid by the Seed Capital Investor). Thus, the ultimate total proceeds to the Fund from the sale of the Seed Creation Units were $2,221,985.69 (an amount representing 1,086,120.68 XRP). Further, the transaction and other costs incurred in connection with the Seed Creation Units were paid by the Seed Capital Investor and not borne by the Fund. The Seed Capital Investor acted as a statutory underwriter with respect to the Seed Creation Units. Shares of the Fund were first listed and began trading on November 24, 2025.

 

The accompanying combined financial statements have been prepared on behalf of the Trust, as registrant, combined with its one currently offered series, the Fund, and for the Fund separately (included below in a separate section of this report).

 

The fiscal year of the Trust and the Fund is March 31st.