Ether-Only Private Funds
Ether-Only Private Funds (often referred to as “Ethereum funds”) offer exposure to ether (ETH), the native token of the Ethereum blockchain.
By investing in an ether-only private fund, investors gain exposure to ether (and the Ethereum blockchain network) while avoiding the hassles (and reducing the cost) of buying, storing and safekeeping ether itself.
Ether-Only Private Funds are typically structured as Limited Partnerships or LLCs and are offered only to Accredited Investors through an Offering Memorandum or Private Placement Memorandum. In some cases, the funds may be structured as trust vehicles allowing investors to directly purchase shares of the trust from the trust. These shares may be eligible for sale in the public market (with an accompanying premium or discount) after a six- or 12-month holding period. The minimum investment is typically $25,000 or more. Potential investors should ask about the fund’s subscription frequency, redemption availability/frequency, notice period for redemptions, management fees, placement fees, incentive fees (e.g., profit participation or carried interest), and tax reporting (Schedule K-1).