Arca Labs announced the approval of the first crypto investment fund based on the Ethereum blockchain by the United States Securities and Exchange Commission (SEC).
The approval of the crypto investment fund, Arca US Treasury FundWas announced through a press release by the digital asset investment firm and cryptocurrencies, , Ark Labs. This investment fund will allow investors to manage their shares as digital securities and transfer them directly on the blockchain de Ethereum.
Arca US Treasury Fund is the first cryptoasset fund approved by the SEC under the Investment Company Act of 1940. Through this fund, investors will be able to see their shares reflected in the form of digital assets that will be named ArCoins, where 80% of these assets may be invested by the Arca US Treasury Fund in the United States Treasury as short-term bills or notes to bear interest.
This is certainly a hopeful step towards the digitalization of securities and equities that significantly expands the use cases for stocks within digital ecosystems, and may pave the way for the possible consolidation of an exchange-traded fund (ETF) for Bitcoin. It is worth remembering that the SEC has always been a skeptical authority regarding digital assets and cryptocurrencies.
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Ethereum at the forefront of digitalizing stocks
Thanks to the properties offered by this blockchain, investors' shares can be transformed into Tokens ERC-1404 type tokens on Ethereum. This type of token only allows transactions and financial movements to previously authorized addresses, unlike ERC-20 tokens which are not restricted in this way.
With this innovation, Ethereum has become the first blockchain to manage a crypto investment fund approved by the SEC. Now, with the new way of using shares on the blockchain, the fund will be able to make investments safely while the SEC, as a regulatory body, will be able to ensure that these investments are made correctly and under its supervision.
For its part, in the words of the investment firm, the new fund represents the unification of traditional finance with a new form of investment in digital assets that will allow combining the best practices traditionally used in economics with the innovation and potential represented by new digital assets and cryptocurrencies based on blockchain technology. Likewise, the Executive Director of Arca, Rayne Steinberg, pointed out that:
“It is really exciting to be pioneering new digital investment products through our Arca Labs division… This is the next stage of development for the digital ecosystem.”
The new investment fund will also allow investors to see daily reports on the net value of their digital assets, obtain financial statements and have protection against bankruptcy risk, as indicated by the Investment Company Act of 1940. Likewise, investors will be able to have a trust that will be under the supervision of an independent management committee of the investment fund.
How does the new crypto investment fund work and what is its importance?
According to the release, Arca US Treasury Fund will allow investments with a minimum value of $1.000 USD, and will pay the accrued interest on such investments directly to investors every quarter of each year.
The investment fund will also implement KYC/AML policies to know the identity of each investment and prevent fraudulent activities such as money laundering. In addition, investors must register for the fund through the official website and complete the registration procedure through an authorized agent.
For the creators of this investment fund, the digital asset ecosystem is in full development and growth, so innovating in the digital investment industry will bring great benefits for investors. Firstly, Arca believes that investors will be able to have a supervisory entity that guarantees transparency and reliability in all investment processes carried out, as well as enjoying the traditional practices to which investors are accustomed. In the digital field, Arca believes that transforming shares into digital assets will allow investors to enjoy better opportunities by managing more efficient payments, with lower costs and faster settlement times, thereby achieving more effective management and monitoring of investments.
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