DigitalX is an Australian crypto firm that was the first among its kind to be listed on a major stock exchange. The crypto fund has been around for a while under a different name DigitalBTC dating back to 2015 but its beginnings go even further than that. DigitalX has been a holder of bitcoin since 2013 currently owning 431 bitcoin. The firm first participated in bitcoin mining operations prior to expanding those services into bitcoin trading and a deeper understanding and development of blockchain technology.
Introducing the new fund
Now the company has introduced a new fund worth almost $2 million. In this new fund, the company will seed 215 of its bitcoin, swapping its interest in that bitcoin for an equivalent interest in the fund. In Australia, cryptocurrencies and firms are very common with multiple places accepting crypto pay along with one of the Australian bitcoin casinos operating pretty successfully. The company announced the new fund at the beginning of November, it will be available through a standard unlisted fund structure to allow sophisticated investors including family offices and high net worth individuals a low-cost and familiar vehicle to gain exposure to this growing asset class. So the Fund aims to offer its clients all the benefits of owning cryptocurrency without the hassle of navigating it, which can be extremely confusing if you’re new to the scene.
DigitalX will be following through with Australia’s wholesale unit trust structure and will provide institutional-grade custody standards, securing clients and company holdings in a high-security wallet system provided by Bitcoin custodian BitGo. This wallet system offers insurance on assets up to $100 million hence the client should feel secure working with the fund.
As of right now, the fund is valued at US$1.9 million. The firm has plans to grow the investment vehicle and its funds, expecting growth via fees receivable from the fund. The Management fees are said to be set at 1.65% annually, but there will be no performance fees. This will probably attract more investors and help the fund grow much quicker. At least that’s what the firm is hoping for.
So far the company’s plans sound legit enough but that’s not all there is to DigitalX. The firm also provides its clients with bitcoin consulting and development services and asset management. Having been in the game for almost 5 years now, it’s safe to assume that the Australian fund knows how to deliver good services.
As listed on their website, there are multiple reasons why investors would want to invest. It will offer its client knowledge of the various exchanges available to purchase bitcoin, offering them the services of transferring cash to the exchange and complying with various transfer limits. DigitalX offers the chance to execute orders at the best price, selecting and storing the bitcoin back into an exchange account and selling the bitcoin. The fund will make it easier for investors to navigate these items while getting full benefits from wholesale rates.
Now that the fund is set up, the firm has plans to tour around Australia, visiting cities like Sydney, Melbourne, and Perth to meet qualifying potential investors and promote the product.
It would seem like an easy sell at this point but DigitalX has seen its share of controversies.
The former executive chairman of DigitalX had to resign and was indicted by the US Government due to his alleged involvement in a fraudulent message exchange. Allegedly he was at the center of an auto-subscribing phone scam that allegedly earned him $20 million dollars. Zhenya Tsvetnenko’s trial isn’t scheduled until February of next year.
He has already been denied bail three times but the former executive chairman still hasn’t given up, having applied for permission to argue for his release in front of Australia’s highest court. Later on, DigitalX Ltd. was served with an Originating Application and Statement of Claim in August 2018. The claim which pertained to an ICO investment for which DigitalX served as an advisor was filed by a group of clients in Australia’s Federal Court for $1.8 million-plus damages.
DigitalX denied all the claims, finally entering the settlement with the applicant without any admission of liability. The firm ended up paying roughly $300 000 in cash and $240 000 in company shares. This did temper with the company’s reputation and now DigitalX might have to work harder to try to convince investors to put their trust into this company, so their fund can actually grow like DigitalX is hoping it to.
The high rate of crypto crimes can be attributed to the fact that cryptocurrencies are so popular. Actually, cryptocurrency crimes are quite common in Australia. As of right now, 200 police officers and legal professionals are gathering in Australia this week to work together to find a way to decrease the number of Cryptocurrency based crimes at the National Proceeds of Crime Conference.
The last event of this sort took place in 2009 so their policies could use an upgrade. The attendees will hear from the Australian Federal Police, United States Department of Justice, Singapore Police Force, New Zealand Police, Australian Taxation Office as well as the Australian Securities and Investment Commission so the conference is sure to be fruitful, hopefully brining the solutions that will prevent scam like one DigitalX was allegedly involved in. It’s about time that authorities understand the true impact of cryptocurrencies.