Truth Social Funds Seeks SEC Approval for Two Digital‑Asset ETFs
July 30, 2024 – New York – Truth Social Funds has lodged a registration statement with the U.S. Securities and Exchange Commission (SEC) to launch a pair of exchange‑traded funds that would give traditional investors direct exposure to leading cryptocurrencies. The proposals, tentatively named the Truth Social Cronos Yield Maximizer ETF and the Truth Social Bitcoin & Ether ETF, are being prepared in partnership with Crypto.com and will be overseen by the boutique investment firm Yorkville America Equities.
Fund structure and fees
- Cronos Yield Maximizer ETF – Designed to track the native token of the Cronos blockchain, CRO, and to generate income through on‑chain staking yields.
- Bitcoin & Ether ETF – Holds allocations to Bitcoin (BTC) and Ethereum (ETH), the two largest digital assets by market capitalization, and also incorporates staking rewards where feasible.
Both vehicles will charge an annual management expense ratio of 0.95% and will be managed under Yorkville’s guidance. Yorkville’s President, Steve Neamtz, said the offerings are intended to “provide an investment platform that captures both price appreciation and income opportunities across the crypto spectrum.”
Market context
The filing arrives amid a growing wave of interest from conventional financial institutions in incorporating digital assets into regulated products. By routing crypto exposure through a SEC‑registered ETF, Truth Social Funds hopes to address two persistent barriers for many investors:
- Regulatory clarity – An ETF structure subjects the underlying assets to the same reporting, disclosure, and fiduciary standards that govern traditional securities.
- Liquidity and custody – Institutional‑grade custodial arrangements and the ability to trade shares on standard exchanges could improve market depth for CRO, BTC, and ETH.
Analysts note that while the SEC has historically been cautious about approving crypto‑linked ETFs, recent approvals for futures‑based Bitcoin products and a handful of spot‑based proposals suggest a slowly evolving stance.
Potential impact
- Broader investor base – A regulated ETF could attract capital from retirement accounts, wealth‑management desks, and other investors who have avoided direct crypto purchases due to compliance concerns.
- Staking income – By embedding staking rewards, the funds aim to differentiate themselves from pure price‑trackers and may appeal to yield‑seeking investors in a low‑interest‑rate environment.
- Cronos exposure – Including CRO, a less‑well‑known token, signals confidence in the growth of layer‑1 ecosystems beyond the Bitcoin‑Ethereum duopoly.
Risks to watch
- Regulatory risk – The SEC could request additional disclosures or impose restrictions that delay or alter the fund structures.
- Staking volatility – Income from staking is subject to protocol changes, network participation rates, and market price swings, which could affect fund performance.
- Management fee – At 0.95%, the expense ratio sits above the low‑cost index funds traditionally offered by large asset managers, potentially weighing on net returns.
Key takeaways
- Truth Social Funds is pursuing SEC approval for two crypto‑focused ETFs, one centered on CRO and the other on Bitcoin and Ethereum, both with staking components.
- The funds will be managed by Yorkville America Equities and charge a 0.95% annual fee.
- By offering a regulated, exchange‑traded gateway to digital assets, the products aim to capture institutional capital and enhance market liquidity.
- Success hinges on regulatory clearance, the stability of staking revenues, and the ability to attract investors accustomed to traditional mutual‑fund or ETF structures.
If approved, the Truth Social ETFs could become a notable addition to the growing roster of regulated crypto investment vehicles, potentially widening the bridge between decentralized finance and mainstream capital markets.
Source: https://thedefiant.io/news/tradfi-and-fintech/truth-social-files-for-digital-asset-etfs
