Amid heated speculation over whether the crypto asset (virtual currency) Bitcoin will be approved as an exchange-traded fund (ETF), former Citigroup executives will begin selling securities backed by Bitcoin. The deal does not require approval from the Securities and Exchange Commission (SEC).
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The new security, called a Bitcoin Depository Receipt (BTC DR), is a type of depositary receipt, like an American Depositary Receipt (ADR), which represents the right to own stocks outside the United States. Startup company Receipts Depositary Corporation (RDC) plans to issue this to international institutional investors who meet certain criteria. The transaction is not subject to registration requirements under the Securities Act of 1933.
According to a release from RDC, institutional investors can purchase Bitcoin depositary receipts through a U.S.-regulated market infrastructure, with transactions settled in DTC.
“For high-net-worth individuals such as hedge funds, family offices, corporations, and large institutional investors who wish to convert their Bitcoin into DTC-eligible securities and obtain direct ownership in a U.S. clearinghouse, we provide the tools to do so.” Ankit Mehta, CEO and co-founder of RDC, said in an interview. He was a former Citigroup executive.
Broadridge Corporate Issuer Solutions will act as the transfer agent, and Anchorage Digital Bank National Association will be responsible for custodianship of the underlying Bitcoin. According to a press release, RDC is backed by investors including Franklin Templeton, BTIG and Broadhaven Ventures.
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Original title:Citi Alumni Plan Bitcoin Securities That Don’t Need SEC Approval(excerpt)
2024-01-04 14:23:46
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