![]() One common exemption appears under Section 3(c)(1) of the 1940 Act. based cryptocurrency private funds are operating under certain exemptions from registration under the Investment Company Act of 1940 (the “1940 Act”). What these small private investors should understand is that many new U.S. Many private funds and their sponsors are willing to accept these types of investments, provided that the SPEs and their investors comply with certain regulatory requirements under which such funds operate. This presents a fantastic avenue for these smaller scale investors to gain exposure to cryptocurrency in a manner that is normally reserved for larger institutional investors and family offices. Often these smaller private investors are interested in pooling capital creating special purpose entities (“SPEs”), such as a limited liability company (“LLC”) and collectively investing right alongside larger investors in cryptocurrency focused private funds. With many large institutional investors often dissuaded by its volatility, still taking a very “wait and see” approach to the cryptocurrency market, the door may be open for certain smaller private investors. With the expansion of cryptocurrency and the opportunities to capitalize on its growth, there has been a recent flurry of sponsors looking to raise capital in order to launch private funds primarily focused on cryptocurrency positions. ![]() Forming Special Purpose Entities to Gain Exposure to Private Cryptocurrency Funds
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