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3iQ Corp has filed preliminary prospectus to float its Bitcoin Fund through an initial public offering, which is expected to expand its investor base.
Canadian investment fund manager 3iQ announced on Thursday it has filed and been noted on its preliminary prospectus for Bitcoin Fund in relation to an initial public offering of Class A units and Class F units at a price of $10.00 USD per unit. This step is believed to widen its investor base.
As per the announcement, this fund is a closed-end investment fund created as a trust under the laws of the Province of Ontario and the units will be an “eligible qualified investment for registered investment accounts.”
The fund is focusing its investment objectives on providing its holders with the exposure to Bitcoin and the daily price movements of the U.S. dollar price versus Bitcoin, and the opportunity for long-term capital appreciation.
This fund is a non-redeemable investment fund (NRIF) and that’s the reason why it enables 3IQ Corp to invest in assets that are not permitted for mutual funds. As an NRIF, this Bitcoin Fund limits the redemption rights of its investors. Fund investors are given the right to redeem their investments at net asset value annually or redeem them monthly at a discount.
3iQ Corp., will act as the investment manager and portfolio manager of the fund and the offering is being led by Canaccord Genuity Corp. As per the announcement, Bitcoin in the fund will be kept by New York-based cryptocurrency exchange Gemini Trust Company LLC.
The firm received initial approval from the Ontario Securities Commission back on October 30 and it enables it to launch the fund on two possible exchanges. One is the Toronto Stock Exchange and the other one is the TSX Venture Exchange. The fund will be ready to be launched later this year.
Fred Pye, President & CEO of 3iQ then said:
“Over the past three years, we have worked actively with the OSC’s Investment Funds and Structured Products Branch to create an investment fund that we hope will allow retail investors the benefits of investing in Bitcoin through a regulated, listed fund. We have addressed the questions of pricing, custody, audit, and public interest issues in a regulated investment fund. We intend to refile the prospectus as soon as possible as the next step in bringing this ground breaking fund to investors.”
Source familiar with the situation said that the company would probably choose to be listed on the Toronto Stock Exchange and it could begin trading already in late December or early January. The source added that this deal had been planned for three years and 3iQ was in constant talks with the regulator.
“We knew we could challenge this and we could fight and win, but we had to get it right. After the disaster of QuadrigaCX and, obviously now, Einstein Exchange, Canadians deserve a regulated, registered, and licenced product. Now they’ve got one, which is amazing.”
The company also said this IPO would be the “world’s first regulated closed-end Bitcoin exchange-traded product.” However, they might be wrong since such product launches happened before. For example, Swiss Amun AG has launched several ETPs for Bitcoin and other cryptocurrencies, including XRP, Ether and BNB.