A new type of SEC-regulated crypto fund has just launched

A Los Angeles cryptocurrency investment fund announced today that its SEC-registered fund is open for business.

Arca US Treasury Fund is the first SEC-registered product to offer shares in the form of digital securities under the Investment Company Act of 1940. The shares take the form of the fund’s Ethereum-based token, ArCoin.

“It is really exciting to be a pioneer in new digital investment products,” said Rayne Steinberg, chief executive of Arca.

The token takes the form of an ERC-1404, an Ethereum token specifically designed to comply with regulators. Unlike the common ERC-20 standard, ERC-1404s can be frozen and transactions can be rejected or approved only for certain addresses.

Arca’s SEC approval should give investors peace of mind. The fund provides shareholders with daily updates, bankruptcy protections and audited financial statements. All assets are held in a trust, guarded by an “independent board of directors”.

Say hello to anyone with $ 1,000 or more.

Arca will invest 80% of the digital cash in “short-term, interest-bearing United States Treasury securities. “Each ArCoin represents a single share in the fund, paying interest each quarter.

From investors, Arca requests 3.22% in commissions; As a special welcome offer, it has reduced them to 0.75% during the first year.

Jerald David, president of Arca Capital Management, the company that oversees Arca Lab, said interest in crypto funds has peaked amid the coronavirus pandemic, a push for “our world to shift from physical to digital during the last years”.

SEC-registered crypto investment products are nothing new. Grayscale, for example, runs one of Bitcoin’s largest mutual funds. Regularly checks in with the SEC. The difference is that Arca is investing its own cryptocurrency, rather than Bitcoin.

Hopeful hodlers It could take the news that the SEC could soon move ahead with the long-awaited Bitcoin exchange-traded fund.