10-K: Franklin XRP ETF Files Annual Report

Franklin XRP Trust, offering the Franklin XRP ETF, has filed its annual report detailing its operations and financial condition for the fiscal year ended March 31, 2026.

Summary

• The Franklin XRP Trust, through its sole series, the Franklin XRP ETF (XRPZ), has filed its annual report on Form 10-K for the fiscal year ended March 31, 2026.
• The Fund commenced operations on November 24, 2025, and its primary investment objective is to reflect the performance of the price of XRP before expenses.
• The Fund's Net Asset Value (NAV) per Share decreased by 40.04% from $24.40 at the start of operations to $14.63 by March 31, 2026, mirroring the decline in XRP's price.
• The Sponsor, Franklin Holdings, LLC, has agreed to waive its entire fee on the first $5.0 billion of the Fund's assets through May 31, 2026.
• The filing extensively details various risks associated with digital assets, XRP specifically, market volatility, regulatory uncertainty, and operational risks related to custodians and prime brokers.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this filing as having a negative sentiment due to the substantial decline in the Fund's NAV and the extensive list of risks highlighted, despite the Sponsor's fee waiver.

Positives

• The Sponsor has waived its fee on the first $5.0 billion of the Fund's assets through May 31, 2026, reducing costs for investors during this period.
• The Fund's operations commenced, providing investors with an exchange-traded product offering exposure to XRP.
• The Fund utilizes Coinbase Custody Trust Company, LLC as its XRP Custodian and Coinbase Inc. as its Prime Broker, leveraging established entities in the digital asset space.

Negatives

• The Fund experienced a significant decline in NAV per Share of 40.04% from its inception on November 24, 2025, to March 31, 2026, directly correlating with the decrease in XRP's price.
• The Fund's investment is concentrated solely in XRP, meaning any decline in XRP's value directly impacts the Fund's performance without diversification benefits.
• The filing highlights numerous risks, including extreme volatility in XRP prices, potential regulatory changes, and operational risks associated with digital asset custodians and prime brokers, which could lead to substantial losses.

Risks

• Extreme volatility in XRP prices could lead to a material adverse effect on the value of the Shares, potentially resulting in a total loss of investment.
• Regulatory uncertainty surrounding digital assets in the U.S. could lead to adverse legislative or regulatory developments that harm the value of XRP or the Shares.
• Security threats to the Fund's account at the XRP Custodian could disrupt operations and result in the loss of Fund assets.
• The Fund's reliance on third-party service providers, such as Coinbase Custody and Coinbase Inc., introduces operational and counterparty risks.
• The potential for forks or other disruptions to the XRP Ledger could adversely affect the value of the Shares.
• The fixed supply of XRP and the burning of XRP for transaction fees could create deflationary pressure, potentially impacting its utility as a medium of exchange and increasing price volatility.
• Concentration of XRP holdings by Ripple Labs and early stakeholders could influence market dynamics and potentially affect XRP's market price.
• The lack of a clear regulatory framework for digital assets in the U.S. poses risks, including potential manipulation and fraud on digital asset platforms.
• The Sponsor's limited history in operating crypto-asset investment vehicles may present challenges in navigating the complexities of the digital asset market.
• The Fund's structure as a grantor trust and its reliance on XRP as the sole asset could lead to tax liabilities for shareholders without a corresponding distribution.

Future Outlook

The Fund's future performance is directly tied to the price of XRP. The Sponsor does not actively manage the XRP holdings, meaning the Fund will not attempt to profit from market volatility. The Sponsor has agreed to waive its fee on the first $5.0 billion of assets until May 31, 2026.

Management Comments

• The Fund seeks to reflect generally the performance of the price of XRP before payment of the Funds 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.
• 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.

Industry Context

StockSavvy.ai notes that the Franklin XRP ETF's filing reflects the ongoing trend of traditional asset managers launching cryptocurrency-focused exchange-traded products, aiming to provide regulated access to digital assets for a broader investor base. However, the significant decline in XRP's price during the reporting period underscores the inherent volatility and risks associated with direct cryptocurrency investments.

Legal Proceedings

• As of June 29, 2026, the Trust and the Fund are not subject to any material legal proceedings, nor, to our knowledge, are any material legal proceedings threatened against the Trust or Fund.

Related Party Transactions

• Franklin Resources Inc. (Seed Capital Investor), an affiliate of the Sponsor, purchased initial seed shares and seed creation units.
• Franklin Distributors, LLC serves as the Marketing Agent for the Fund and is an affiliate of the Sponsor.
• Franklin Resources Inc. held 70,000 outstanding shares of the Fund as of March 31, 2026.

Stakeholder Impact

• Shareholders have experienced a significant decrease in the value of their investment due to the decline in XRP's price.
• The concentration of the Fund's assets in XRP exposes shareholders to substantial market risk.
• The extensive risk disclosures indicate potential for significant losses for investors.
• The Sponsor and its affiliates are indemnified by the Trust for certain liabilities, potentially limiting recourse for shareholders in case of losses not covered by gross negligence or willful misconduct.

Next Steps

• The Sponsor will continue to oversee the Fund's operations and service providers.
• Investors will monitor the price of XRP and its impact on the Fund's NAV.
• The Sponsor's fee waiver is in effect until May 31, 2026, after which the fee structure will be re-evaluated.

Key Dates

Recommendation

The Fund's performance is entirely dependent on the price of XRP, which has shown extreme volatility. While the Sponsor's fee waiver is a positive, the significant NAV decline and extensive risk factors suggest a cautious approach. Investors should only consider this product if they have a high risk tolerance and a strong conviction in XRP's future performance, making a 'hold' recommendation appropriate for existing investors who understand these risks, while new investors should exercise extreme caution.

Keywords

Franklin XRP ETF, XRPZ, Form 10-K, Annual Report, Digital Assets, Cryptocurrency, XRP, Franklin Holdings, Coinbase, SEC Filing