Arca Labs has begun trading for its new digitized security, the ArCoin that runs on the Ethereum blockchain and represents shares in Arca’s U.S. Treasury Fund.
On July 6 an announcement was made by the firm stating that ArCoin is registered with the Securities and Exchange Commission and is composed of 80% U.S. Treasury securities.
EXCLUSIVE: Investment manager Arca uses ethereum in first SEC-registered fund for digital shares: https://t.co/O18ei98iiE by @CharlesLBovaird — Forbes Crypto (@ForbesCrypto) July 6, 2020
Arca’s successful filing dates past April, although the firm has been working on the product for two years alongside law firm Morrison & Foerster.
The fund is tradeable through a specific portal, facilitating peer-to-peer transactions. However, for the time being, ArCoin is unavailable on any major securities exchanges.
In a prospectus filed with the SEC in April 2019 for the then-developing ArCoin, Arca explained:
“In the future, Arca UST Coins may be tradeable on a public decentralized or centralized electronic exchange platform that is registered with the SEC as an alternative trading system (“ATS”), although there is no guarantee any such systems or platforms will be available.”
Jerald David, president of Arca Capital Management, which oversees Arca Labs said:
“We wanted to create an instrument that invests in traditionally lower-volatility assets and the U.S. Treasury’s were an ideal choice from that perspective.”
Security tokens usually face a tricky landscape in the United States, where regulators are skeptical of cryptocurrencies in general, while applying intensive scrutiny blockchain securities trading.
The use of Treasury assets may have caused the SEC to look on Arca’s offering more favorably.
The Treasury Funds are not the end of the line, however, “The Arca U.S. Treasury Fund is the first of a suite of products that Arca Labs seeks to develop.”
David further adds:
“Portfolio of ArCoin and a portfolio of other investment products running on a blockchain that are SEC-registered and offer investors transparency and the ability to use peer-to-peer transactions to transfer the value of ArCoin.”