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Investment group acquires green light from the SEC for Bitcoin Futures fund

The Securities and Exchange Commission has approved the New York Digital Investment Group (NYDIG) to offer shares of its NYDIG Bitcoin Strategy Fund, which will invest in cash-settled bitcoin futures contracts, to institutional investors.

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Sun, 08 Dec 2019, 10:30 am UTC

The New York Digital Investment Group (NYDIG) has acquired the green light from the Securities and Exchange Commission (SEC) to offer the shares of its new bitcoin fund to institutional investors.

The NYDIG Bitcoin Strategy Fund will be investing in cash-settled bitcoin futures contracts with crypto exchanges that are registered to the Commodity Futures Trading Commission (CFTC).

In a filing released by the SEC, the NYDIG said that the fund will only be investing in cash-settled Bitcoin futures and will not be directly investing in Bitcoin or other digital assets. The price of each share is being offered at $10, with its net assets initially cap at $25 million. When the cap is reached, the fund “will close to new investors and only the reinvestment of dividends by existing investors will be permitted.”

The SEC’s approval is a significant step for the crypto industry as the regulatory body has been quite restrictive when it comes to this nascent market. Indeed, the NYDIG and CME are the only two entities that were permitted by the agency to date.

Bakkt creating waves

Meanwhile, the Intercontinental Exchange (ICE)’s Bakkt Bitcoin (USD) Cash Settled Monthly Futures contract is set to launch tomorrow, Dec. 9, in Singapore. This new offering will allow interested investors to mitigate risks if they’re planning to enter the bitcoin industry.

“Our new cash-settled futures contract will offer investors in Asia and around the world a convenient, capital-efficient way to gain or hedge exposure in bitcoin markets,” said Lucas Schmeddes, President & COO of ICE Futures and Clear Singapore. “Building off the success of our deliverable futures contract, the cash-settled futures will leverage ICE’s regulated, globally-accessible market to offer a safe, secure and compliant environment for the trading of bitcoin.”

SEC slowly easing up on the crypto market

This development is the SEC’s maneuver to cultivate the growth of the crypto industry, while simultaneously keeping vigilance to illicit activities that may arise from this emerging market. Money laundering and terrorist financing are just some of the issues that have been identified by authorities that are closely tied with the crypto ecosystem.

Dalia Blass, director of the SEC's Division of Investment Management, has been asking industry players to provide assistance on how to decrease risks for investors. Blass said that she’s been pleased with how the industry has responded and it appears that NYDIG’s new license is a reflection of that positivity.

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