Overview of USCC
Legal and economic review of Superstate Crypto Carry Fund
We recently reviewed the Superstate Crypto Carry Fund, as part of an evaluation process to include the collateral in our Morpho vaults.
The full report is available on our website. PDF available.
Executive Summary
Product Name
Superstate Crypto Carry Fund
Issuing Entity
A Separate Series of the Superstate Asset Trust, a Delaware Statutory Trust
Underlying Assets
Crypto assets, futures and forward contracts on crypto assets, and US T-Bills
Tokens
USCC, ERC-20 Tokens on Ethereum
Minimum Investment
$100,000
Permissions
Primary and Secondary trading limited to whitelisted investors passing a KYC/AML onboarding process
Yield Distribution
Yield accrues to Fund NAV, determined as of the close of regular trading (17h ET) on each day that both the New York Stock Exchange and the Federal Reserve Bank of Philadelphia are open
Fees
0.75% of the value of the Fund’s average daily NAV, as well as qualifying Fund Expenses
Investment Program
The Fund’s investment objective is to generate yield from digital asset basis trading, primarily by executing a “cash and carry” trade investing in the differential between the spot and future price of certain digital asset commodities. The Fund will trade only those digital assets for which the U.S. Commodity Futures Trading Commission (“CFTC”) has permitted the trading of an exchange-listed futures contract. The Fund expects to invest substantially all of its net assets in the spot digital asset commodities underlying these futures contracts as well as in futures and derivative products based on, and/or derived from the digital asset commodities. The assets of the Fund will be both exchange-listed and/or traded over-the -counter globally.
Funds not otherwise invested, including reserves for collateral and redemptions, are expected to be held in USD or USD-like products, including stablecoins like USDC and U.S. Treasury securities.
Tokenized Fund Shares
Shares will be issued in uncertificated form recorded either as non-tokenized Book Entry Shares or as Tokenized Shares. Book Entry Share ownership and transfer will be recorded on the books and records of the issuer. Tokenized Share ownership and transfer will be authenticated and recorded as a token, initially, on the Ethereum blockchain. Other open source, public, blockchain-based distributed computing platforms and operating systems featuring smart contract functionality may become available over time.
USCC is offered under the exemption provided by Section 4(a)(2) of the Securities Act and Rule 506(c) of Regulation D. Shareholders record their position in the NAV either through Book Entry or through holding USCC tokens on an identified crypto address. The Investment Manager retains the discretion to allow or stop the transfer of Book Entry Shares to a third party and similarly relies on allowlists in USCC’s smart contract functionality to restrict the transferability of the Shares to a list of pre-approved Qualified Investors. Consequently, the supply of USCC tokens will always be equivalent to the outstanding Shares of the Fund, outside of positions held on Book Entry.
Crypto Basis Strategy
The Fund primarily invests in crypto basis strategies (differential between the spot and future price). These strategies are executed through holding, at various times, underlying crypto asset collateral, futures or forward contracts on the same assets or US T-Bills.
Income Accrual
Income generated by the Fund will be accumulated and reinvested by the Fund. There are not expected to be any distributions or dividends to the shareholders other than redemptions of Fund Shares.
KYC/AML Compliance and Whitelist
The Fund and USCC tokens are available to "whitelisted" (aka Allowlist) investors who have passed checks for suitability, AML/KYC verification and register their corresponding addresses. Only the whitelisted users can subscribe for or acquire tokens on the secondary market. The Allowlist address check is part of the USCC token’s code and occurs each time a transaction is attempted. If the receiving or sending address is not present on the Allowlist, the transaction will fail.