A group of former Citigroup executives plan to offer bitcoin-backed securities that do not require approval from the US Securities and Exchange Commission (SEC).
Former Citigroup Inc. executives have established a startup offering securities backed by Bitcoin that they say do not need SEC approval.
No SEC Blessing Needed
A group of former Citigroup executives plan to offer Bitcoin-backed securities that do not require SEC approval. In a press release, the startup, named “Receipts Depository Corporation (RDC),” said it aims to address the institutional desire for bitcoin investments that they may not receive from spot BTC exchange-traded funds (ETFs).
Bloomberg explained that RDC will offer institutional clients Bitcoin depository receipts similar to American depositary receipts (ADRs) that represent foreign stocks.
RDC’s press release states, “…BTC DRs operate within US-regulated market infrastructure and are cleared through The Depository Trust Company (DTC).”
The startup explained it will “issue the first BTC DRs in transactions exempt from registration under the Securities Act of 1933 to Qualified Institutional Buyers (QIBs) in the coming weeks.” According to RDC, it is backed by Franklin Templeton, BTIG, and Broadhaven Ventures, and the offering will start in the coming weeks. Anchorage Digital Bank National Association will be the custodian of the underlying BTC.
Addressing the Institutional Desire for Bitcoin Investments
Ankit Mehta, co-founder and CEO of RDC, said in the press release:
“We are excited to provide qualified institutional buyers with the secure, regulated access to digital assets they have been waiting for via BTC DRs.”
Adding;
“There are many benefits to using depositary receipts, such as their tried and true structure, providing direct ownership of the underlying asset and easy inclusion in institutional products. BTC DRs are universally fungible as QIBs can convert their Bitcoin holdings into DRs and vice versa.”
RDC established itself to address the institutional need for bitcoin investments that a spot ETF may not necessarily meet if the SEC approves the listing of a spot BTC ETF in the US.
Mehta also told Bloomberg that shares in bitcoin ETFs may be redeemed for cash, but depository receipts would offer direct ownership of BTC.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
