According to The Block: Bitwise recently announced that all assets, including small bitcoin amounts and other tokens sent to its recently published bitcoin wallet for its spot bitcoin Exchange-Traded Fund (ETF), will benefit the fund's shareholders. Bitwise became the first issuer of a spot bitcoin ETF to reveal the wallet for its fund and started receiving unexpected inputs shortly after.
These inputs ranged from small bitcoin amounts to BRC-20 tokens, Bitcoin domain names, and an array of Bitcoin NFTs. The value of these contributions has already exceeded $5,000.
Bitwise CIO Matt Hougan, in response to a comment, reiterated, "All assets accrue to the benefits of shareholders of BITB."
The fund's S-1 filing reveals that even if Bitwise involuntarily receives assets, it has the ability to sell them for cash and distribute the cash proportionally to shareholders.
One potential regulatory issue arises from the fact that the U.S. Treasury has sanctioned some Bitcoin wallet addresses. Any wallets receiving funds from these sanctioned addresses are mandated to block the inbound Bitcoin and report about the transaction to the Office of Foreign Assets Control (OFAC).
Addressing this issue, Hougan stated that it is the responsibility of the custodian, in this case, Coinbase, to ensure compliance. Coinbase confirmed they block OFAC-sanctioned addresses and work with clients to ensure the funds are blocked and reported as required by law, moving them to a Coinbase internal holding account.
In conclusion, even amid regulatory complexities, Bitwise's initiation to capitalize on the Ethereum network's capabilities to facilitate benefits for shareholders ushers new possibilities within the crypto space.
