First Block Capital Inc., the first regulated Bitcoin fund in Canada, has now been awarded with a mutual fund trust status.
The First Block Capital Bitcoin Trust will allow accredited investors in Canada to store their holdings in Tax-Free Savings Accounts (TFSAs) and Registered Retirement Savings Plans (RRSP) as well. This translates into more tax benefits for investors who meet the accreditation criteria.
Canada has several different types of accredited investors. Two of the most common are investors who own assets exceeding $1 million before tax or have earned a net income equal to or more than $200,000 in the last two calendar years, and dealers and investment advisers that have been registered by the securities regulators.
According to a press release, First Block Capital Bitcoin Trust will be accessible for purchase on NEO Connect, a self-regulated decentralized crypto payment system.
Furthermore, investment advisers will be permitted to redeem and purchase FBC Bitcoin Trust units on behalf of their clients provided they meet the accreditation limits. First Block Capital is expecting to see significant movement of funds within the first month from the majority of the investors using the platform.
First Block Capital Chief Investment Officer and Co-Founder Marc van der Chijs says that the company aims to open up digital currency investments even further by making it more accessible.
Allowing unit holders to take full advantage of tax-efficient vehicles such as the ones provided by the Canadian government brings them a step closer to their goal.
He believes that NEO Connect provides the perfect fund distribution platform, and that unit holders stand to benefit from daily liquidity and a network of dealers that is growing at a fast pace.
How First Block Obtained Mutual Fund Trust Status
The Tax Act states that any trust units that exceed 150 unit holders the same year as their launch become classified as a mutual trust fund.
FBC’s Bitcoin Trust is the first of its kind to receive endorsements, not just from the Ontario Securities Commission, but from the British Columbia Securities Commission as well.
FBC is also the first to offer accredited investors a chance to use Bitcoin units in their Tax-Free Savings Accounts and Registered Retirement Savings Plans as well.
Van der Chijs believes that the move has propelled Canada forward as a global leader in regulated cryptocurrency and blockchain investment vehicles.
The company is confident that a lot of transactions will take place this month as their investors look to capitalize on the opportunity.