The Arca U.S. Treasury Fund is a closed-end fund invested primarily in a portfolio of short and medium duration U.S. Treasury bills, bonds and notes. The Fund is registered under the Investment Company Act of 1940 (’40 Act).
The Arca U.S. Treasury Fund's mandate is to invest at least 80% of its assets in U.S. Treasury bills, bonds, and notes.
Currently, most traditional securities have to be purchased and transferred using a brokerage firm. Having the ability to transfer ArCoin directly to another investor using blockchain technology eliminates the need for a financial intermediary. Arca believes this will give ArCoin additional utility.
No, ArCoin is not a stablecoin. Nonetheless, in certain circumstances, we believe ArCoin could be an attractive alternative to a stablecoin. Each ArCoin is a share of the Arca U.S. Treasury Fund, and the net asset value (“NAV”) of ArCoin will vary with the value of the Fund’s portfolio of securities. Although we expect that this will be a relatively low volatility portfolio, it is not risk-free and the NAV can fluctuate.
Because the Arca U.S. Treasury Fund is registered under the Investment Company Act of 1940, the Fund must comply with mandatory fund reporting requirements, including providing audited annual financial reports, semi-annual reports, trade confirmations, monthly statements of account, a daily net asset value (“NAV”) and regulatory filings on all material events.
ArCoin are digital asset securities issued by the Arca U.S. Treasury Fund. By purchasing ArCoin, you are investing in shares of the Arca U.S. Treasury Fund.
We believe the advantages of offering digital shares of the Arca U.S. Treasury Fund in the form of ArCoin include:
ArCoin can be used for multiple purposes. For individuals, ArCoin could potentially be a useful and productive digital asset with the potential to experience limited volatility when compared to other digital assets. For financial institutions and digital-assets enterprises, ArCoin could potentially be used in the following scenarios: clearing and settlement, lending, treasury management, payments, and industries where banking has created friction.
Holders of ArCoin should be aware that the Arca US Treasury Fund has a fundamental policy to make monthly offers to shareholders to repurchase a portion of its common shares. Subject to the review and approval of the Fund’s Board of Trustees, the Fund will offer to repurchase between 5% and 25% of the ArCoin outstanding (not to exceed 25% of the Fund’s outstanding shares over a three-month period). Please see the prospectus for more information regarding the repurchase offers.
ArCoin are digital shares of a portfolio primarily consisting of short-duration U.S. Treasuries (bills, bonds and notes), which are generally considered to be a relatively “lower risk” asset. Therefore, it is anticipated that ArCoin will have lower volatility, but the portfolio’s net asset value may be affected by moves in interest rates or other factors.
Yes, ArCoin is a ERC-20 token
Administrator: Ultimus Fund Solutions
Adviser: Arca Capital Management, LLC
Auditor: RSM US LLP
Custodian: UMB, N.A.
Distributor: UMB Distribution Services
Legal Counsel: Morrison Foerster LLP
Technology Services Provider: Securitize Inc.
Transfer Agent: Securitize, LLC
Arca believes that Ethereum is one of the most stable and secure blockchains. It is also the most widely adopted and supported. Securitize’s DS protocol allows the Fund to enforce transfer restrictions within the ArCoin smart contract while allowing it to live on the Ethereum blockchain.
The Fund intends to distribute its net earnings and realized gains, if any, in the form of dividends from net investment income (“dividends”) and distributions of net realized capital gains (“capital gain distributions” and, together with dividends, “Distributions” and each, a “Distribution”). The Fund intends to accrue dividends daily and distribute them to shareholders of record quarterly. Capital gain distributions, if any, usually will be declared and paid annually in December. The Fund does not have a fixed distribution rate nor does it guarantee that it will pay any distributions in any particular period. Unless a shareholder elects otherwise, their distributions will be reinvested in additional ArCoin under the Fund’s distribution reinvestment plan. See the Fund’s prospectus for more information.
The Fund will report its NAV on a daily basis and will publish the NAV each business day on the ArCoin website. The NAV of an ArCoin is calculated by taking the total value of all the cash, U.S. Treasury Securities, and any other assets in the Fund’s portfolio, minus any liabilities, and dividing it by the number of ArCoin outstanding to get a per share NAV. The Fund will publish and deliver financial statements on a semi-annual basis that show a complete list of all assets held by the Fund. The Fund’s annual report will be audited by an independent registered public accounting firm, RSM US LLP. Although the Investment Company Act of 1940 requires a minimum set of requirements to which the Fund will fulfill, we will make best efforts to report as frequently as possible in order to ensure the highest level of transparency.
The Arca U.S. Treasury Fund will issue a 1099 to any ArCoin holders for the previous year. Please consult your financial advisor on how capital gains are treated.
To see the full list of fees, please refer to the prospectus.
As required by the ’40 Act, Arca U.S. Treasury Fund has entered into a custody agreement with a third-party custodian, UMB, N.A. The Fund’s assets are held in safekeeping at this third-party bank.
The fund's portfolio investments will be managed by Arca's Chief Investment Officer, Jeff Dorman.
Although past performance does not guarantee future results, when interest rates decline, the value of the Fund's portfolio can be expected to rise. Conversely, when interest rates rise, the value of the Fund's existing portfolio of securities can be expected to decline. The Arca U.S. Treasury Fund takes into account capital appreciation and yield when trying to maximize total returns. The Fund’s investment objective is to seek maximum total return consistent with preservation of capital.
Currently, ArCoin are available for purchase by U.S. Persons, including individuals over the age of 18 who are either U.S. citizens or permanent U.S. residents, and any U.S. corporations, partnerships or similar organizations. There is no requirement that purchasers be either accredited investors or qualified purchasers, as those terms are defined under U.S. securities laws. Arca will continue to evaluate whether ArCoin can be used in any additional jurisdictions, in light of local securities laws and other applicable regulations and laws. Please note, if purchasing through the ArCoin website, the minimum investment is $1,000 for an initial subscription.
All ArCoin holders will have to undergo AML/KYC and will have to set up a Fund account with the Fund’s transfer agent. ArCoin holders must provide an Ethereum wallet address that will be whitelisted. If you do not have an Ethereum wallet address, one can be set up in the Arca Labs portal.
ArCoin can be purchased directly from the Fund using Signet, ACH or wire (USD) from our portal. Once AML/KYC is successfully completed, you have provided your Ethereum wallet address and you have established a Fund account with the transfer agent, you will be able to purchase ArCoin in any increment over $1,000. Please note, in order to purchase ArCoin, you will need to meet the following requirements:
In addition, ArCoin can be transferred directly from one holder of ArCoin to another in individually negotiated blockchain transactions if both wallets have been whitelisted as described above.
Note: There is no requirement for peer-to-peer transactions to occur at the Fund’s NAV. Instead, the individual participants in a peer-to-peer transaction on the Ethereum blockchain will negotiate the price at which such transaction will occur.
An investor should carefully consider the investment objectives, risks, charges, and expenses of the Arca US Treasury Fund before investing. This and other important information is available in the Fund’s prospectus, which should be reviewed carefully prior to investing. To obtain a prospectus, please visit https://arcoin.arcalabs.com or call 1-800-445-3148.
The Fund’s Annual Operating Expense Ratio, as reflected in the current prospectus is 3.22%, however, Management has entered into an expense limitation agreement pursuant to which the Fund’s expenses will not exceed 0.75% for the first year after the effective date of the Fund’s prospectus. For more details relating to the fund’s expenses, please review the prospectus.
No assurance can be given that the Fund will achieve its investment objective, and investment results may vary substantially over time and from period to period.
An investment in the Fund involves risk, including loss of principal. An investment in the Fund is suitable only for investors who can bear the risks associated with limited liquidity in the shares and the uncertainty of emerging technologies and should be viewed as a long-term investment.
Other risks specifically associated with the Arca U.S. Treasury Fund are detailed in the prospectus and include no history of operations risk, conflict of interest risk, interval fund risk, no minimum amount of proceeds risk, fund closure risk, liquidity risk, tax related risks, credit and non-payment risk, interest rate risk, portfolio management risk, market risk, repurchase agreement risk, portfolio turnover risk, call risk, valuation risk and issuer risk.
The Arca U.S. Treasury Fund is the first registered funds to offer digital securities and there are additional risks associated with this feature of the Fund, including regulatory risk, liquidity risk, emerging technology risk, operational and technology risk, and risks specifically associated with Ethererum blockchain. There is the risk that management may be unable to successfully use blockchain technology to validate ownership and transfer ArCoin.
For details regarding all of the risks described above, please review the prospectus.
Arca Capital Management, LLC (“Arca Capital”) serves as adviser to the Arca U.S. Treasury Fund, and the Fund is distributed by Ceros Financial Services, Inc., Member FINRA/SIPC (“Ceros”). Arca Capital and Ceros are not affiliated.