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.