Benjamin Lawsky, then-superintendent of the New York State Department of Financial Services, speaks … [+]
New York Digital Investment Group (NYDIG) today disclosed, in an SEC filing that it closed a $190 million bitcoin fund. The NYDIG Institutional Bitcoin Fund LP, reports that it has 24 unnamed investors and is exempt under Rule 506(b) of the Regulation D safe harbor protections established in 2013.
Notably, another NYDIG investment called the Bitcoin Strategy Fund was advised by Stone Ridge Asset Management LLC, a $15 billion advisor whose regulatory affairs boss Ben Lawsky, created the BitLicense granted to NYDIG in November 2018, less than a year after he left his regulatory post. Stone Ridge co-founder Robert Gutmann is listed as the CEO of NYDIG Execution LLC in a 2018 statement from the New York Department of financial services.
While details of the new fund are a mystery, it is notable for another reason. Last month, NYDIG announced it had closed another, similarly named fund for $140 million. If the fund, called the NYDIG Bitcoin Yield Enhancement Fund LP is in fact a different financial instrument, NYDIG has quietly become one of the largest institutional investors in bitcoin in the United States, with a total of $330 million in bitcoin between the two funds. A representative of NYDIG declined to comment.
The matter is further complicated by a name change to the NYDIG Institutional Bitcoin Fund LP, updated today, which was previously called the NYDIG Institutional Digital Asset Fund LP. While we’ve been unable to confirm the $190 million NYDIG Institutional Bitcoin Fund LP updated today and the $140 million NYDIG Bitcoin Yield Enhancement Fund LP closed last month are in fact different, other evidence supports they are.
Namely, the Institutional Bitcoin Fund made its first sale on October 26, 2018, according to today’s documents, and the Bitcoin Yield Enhancement Fund started selling just a week before it closed. A third fund for bitcoin futures, called the Bitcoin Strategy Fund, is currently listed on Stone Ridge’s site under the ticker symbol, BTCNX.
Either way, the presence of a new major player in the institutional investing in bitcoin space is notable. To date, institutional investing in cryptocurrency has been largely dominated by Barry Silbert’s Grayscale, which has $4.0 billion in assets under management, with another new player, 3iQ announcing a smaller, but still significant $48 million exchange-traded product listed on the Toronto Stock Exchange.