Arca Launches New SEC-Registered Digital Security On Ethereum
- The so-called ArCoin is a new ERC-1404 token, which represents the “Arca U.S. Treasury Fund”.
- The new fund has chosen to invest the majority of its assets in one of the investment world’s least risky asset, Treasurys.
Illustration from Freepik
Digital asset investment firm Arca is now selling shares to its new crypto investment vehicle, a SEC-registered closed-end fund, the firm said in a press release on 6 July.
According to the announcement, the firm’s new ArCoin digitized security represents shares of the “Arca U.S. Treasury Fund”, which can be traded atop the Ethereum blockchain. Registered with the U.S. Securities and Exchange Commission (SEC), the fund has invested the majority of its assets, around 80 percent, in short-term U.S. Treasury bills and notes.
Arca’s CEO, Rayne Steinberg, said in a statement:
“It is truly exciting to be pioneering new digital investment products through our Arca Labs division that marry best practices used in traditional finance with the many potential benefits of digital and blockchain technology – this is the next stage of development for the digital ecosystem.”
Although ArCoin is currently unavailable on major securities exchanges, it is tradable on a specific portal, which facilitates peer-to-peer transactions. The aim of the new investment vehicle is to combine one of the investment world’s least risky asset, Treasurys, with blockchain technology, creating a new hybrid digital asset class. As seen in the regulatory filings, Arca has been pushing its ArCoin proposal for almost 20 months now.
Arca’s development team decided to choose Ethereum as the underlying blockchain for their ArCoin. It was chosen as it is one of the largest public blockchains, which is often the landing site for many novel crypto assets. The new digital security uses the ERC-1404 protocol, which is a more restrictive version of the popular ERC-20 protocol. Specifically, holders of ERC-1404 tokens can only send the asset to a collection of whitelisted addresses, which is probably a critical factor for the SEC.
- The U.S. SEC, CFTC, and FTC have all filed separate lawsuits against bankrupt crypto lender Celsius and its former CEO Alex Mashinsky, charging them with multiple counts of fraud.
- Mashinsky was also arrested in New York on Thursday, and later charged by the Department of Justice with securities fraud, commodities fraud, and wire fraud.
Former Celsius CEO Alex Mashinsky on Centre Stage during day three of Web Summit, Lisbon, Portugal, 4 November 2021.Piaras Ó Mídheach/Web Summit via Sportsfile/Flickr
- The U.S. regulator has alleged that the platforms offered unregistered securities to the general pubic in the form of the BNB token and BUSD stablecoin.
- Binance was also accused of failing to register as an exchange, and that it had comingled funds between its global and U.S. platforms.
- Bankruptcy Judge Michael Wiles gave Voyager the permission to close its $1 billion deal with Binance.US, and issue repayment tokens to affected customers.
- Judge Wiles also rejected the SEC’s arguments that the deal could potentially violate U.S. securities laws, and criticized the regulator for attacking the sale without first concluding if it was illegal.