Onramp, a bitcoin financial services firm, has recently launched its first spot bitcoin trust with multi-party custody. This trust gives high net worth investors direct access to bitcoin allowing them to take advantage of the cryptocurrency’s multi-signature capability. The trust is set such that two of the three involved custodians must sign off any transactions involving the invested funds. A unit of the trust would amount to one bitcoin and those investing can perform in-kind redemptions, which allow them to redeem the asset (bitcoin) without having to go through a taxable event.

Comparing this to other investments funds such as Grayscale bitcoin trust, one of the primary differences is that it allows for in-kind redemptions, something which Grayscale stopped providing in 2014-15 with compliance to SEC regulations mentioned as the cause. This has to led to much discontent among institutional investors such as Fir Tree Capital Management which has subsequently sued Grayscale over the matter.

According to Michael Tanguma, CEO and co-founder of Onramp, their new model for bitcoin custody offers what Grayscale Bitcoin Trust should have in the first place. He added that the Onramp trust does not require formal approval from the SEC as bitcoin is classified as a commodity according to the CFTC (Commodity Futures Trading Commission).

Onramp plans of work with security lawyers to reduce the 12 month lock-up period and to ensure they remain compliant in all E.U. jurisdictions in which they offer their services. This trust therefore offers a unique and secure environment for those looking to invest in bitcoin while minimizing their tax liabilities.



Other News from Today