Arca, an investment firm focused on digital assets, has registered with the Securities and Exchange Commission a fund company that invests in U.S. Treasury bonds, which is paid in digital equities to protect shareholders from the loss of their private keys,media reported. After more than two years of nine submissions, Arca U.S. Treasury Fund can now invest as a closed-end fund registered with the SEC, which will issue shares in the form of ArCoin, an ERC-1404 token that can be traded in the Ethereum blockchain.
Arca U.S. Treasury Fund is registered under the Investment Companies Act 1940, which requires investment companies and funds to register with the SEC and to provide adequate disclosure and requirements for investment products.
Registration with the SEC through the Investment Companies Act of 1940 means that investors in arca U.S. Treasury Fund can get their money back if they have problems with the use of bonds, thanks to the Act’s bankruptcy protection and other guarantees.
The fund itself operates in the same way as any other treasury-bond-based fund, only adding a blockchain layer to stock delivery. Instead of putting their money into digital securities, investors get their shares through digital tokens issued by Ethereum.
The company said 80 per cent of the fund would invest in short-term ustreasury. Each share held by the investor will receive an ArCoin, which will be subject to accrued interest on the ArCoin holders on a quarterly basis.
While ArCoin has the utility and leverage of Tokensoft technology — according to Arca, they can be used by financial institutions for clearing, clearing, borrowing, trading and payments – they are referred to as “digital stocks” rather than tokens or digital assets because they represent a portion of the fund. In essence, Arca has combined the ability to encrypt tokens with paper sharing to form so-called digital stocks.
Jerald David, president of Arca Capital Management LLC, said that while Arca’s records were stored in the outer chain, digital stocks made the fund’s record-keeping more accurate. “ArCoin provides businesses with opportunities to manage their businesses, manage funds, reduce costs, reduce settling times, and track all transactions directly.”
Such a record of holdings also protects investors’ holdings — even if they make their own mistakes. Contrary to the popular ERC-20 protocol, the ERC-1404 framework only supports holders of whitelist addresses. Investors can access their ArCoin through a user portal with Know-Your-Customer and anti-money laundering protection, but they can also put ArCoin in their wallet and access it through the private key. This means that the holder has a say over who owns their shares.
Typically, losing a key means losing a password. However, Arca has added a legal structure to its fund that allows shareholders to apply to replace ArCoin, which represents its shares. If the private key is lost, they can request a replacement from the transfer agent DTAC. Blockchain records show that those ArCoins are put in an inaccessible wallet and the shares will be invalidated and reissued.