Citigroup alumni can issue BTC securities without SEC approval
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Former Citigroup executive will offer Bitcoin (BTC)-backed securities.
according to a Bloomberg A report published on January 4 claimed that former Citigroup executives would offer BTC-backed securities that they said would not require approval from U.S. regulators. This brazen move would see issuers set up so-called Receipt Depository Companies (RDCs).
The securities will be Bitcoin depositary receipts, which function similarly to American depositary receipts representing foreign stocks. According to the company, the BTC DR offering will provide institutions with access to securities through U.S.-regulated market infrastructure and will be cleared through the Depository Trust Co.
The main difference with Bitcoin ETFs is that depository receipts provide qualified institutions with direct ownership of BTC, and RDC said it would be the first of its kind to do so.
The issuer stated that some regulated institutions are not inclined to purchase Bitcoin as the cryptocurrency market faces challenges such as security risks and regulatory uncertainty. The RDC proposal would provide a product that would “complement” a Bitcoin ETF.
Ankit Mehta, co-founder and CEO of RDC and a former Citigroup executive, said:
“We are the conversion vehicle for today’s asset owners, whether they are hedge funds, family offices, corporations or large institutional investors looking to convert their Bitcoin into DTC-eligible securities.”
Ankit Mehta, Co-Founder and CEO, RDC
Amid the hype surrounding investing in Bitcoin, the new product is likely to be popular with investors. The issuer stated that the most significant difference with BTC DR is that it does not require approval from the U.S. Securities and Exchange Commission (SEC).
Given the challenges and numerous considerations currently facing the U.S. Securities and Exchange Commission regarding spot Bitcoin ETFs, regulatory uncertainty and risk aversion in traditional financial markets, the group’s latest issuance may bring capital entry to some institutional investors Opportunities in the Cryptocurrency Market.
