Winklevoss Brothers Win Patent Claim Which Aims To Settle Exchange Traded Products

by | May 14, 2018 | Cryptocurrency, Cryptocurrency News

Winklevoss Brothers | Patent | ETP | Exchange Traded Products | ETF's

Winklevoss IP, the company owned by Gemini authors Cameron and Tyler Winklevoss, has been granted with a patent claim that intends to settle exchange-traded products (ETPs) holding cryptocurrencies.

The company sketched out a framework that can execute transactions for ETPs holding cryptocurrencies, “for example, bitcoins … ripple, dogecoins … ether” and also BBQCoin, among others, as indicated by patent distributed by the U.S. Patent and Trademark Office on Tuesday. The company initially recorded the application in December of a year ago.

ETPs, which incorporate exchange-traded funds (ETF), is a sort of security whose costs get from other investment instruments they are tied to, which in the Winklevoss case, would be cryptocurrencies. The product explained in the patent application as ETP is similar to an ETF.

An Exchange Traded Fund (ETF) is a tradable security that tracks the price movement of a particular index or industry. ETF is commonly used by investors to reduce risk and improve probable returns. The ETP as described by the patent will track the price movements of constituent cryptocurrencies.

Since cryptocurrencies are price volatile, an ETP can become an ideal investment tool for reducing price risk. The application states:

“Shares based on digital math-based assets may be redeemed using one or more computers by determining share price information based upon quantities of digital math-based assets held by a trust, electronically receiving a request from an authorized participant user device to redeem a quantity of shares, electronically transmitting a quantity of digital math-based assets from one or more origin digital asset accounts to one or more destination digital asset accounts associated with the authorized participant, and canceling the quantity of shares from the authorized participant.”

The patent reward is remarkable as it gives a look into the Winklevoss siblings’ proceeding with endeavors to push forward the exchanging of cryptocurrency-related ETF subsequent to having met obstacles from U.S. regulators.

 The patent defines a digital math based asset as “a kind of digital asset based upon a computer generated mathematical and/or cryptographic protocol that may, among other things, be exchanged for value and/or be used to buy and sell goods or pay for services,” which could be intangible asset not based on any governmental rule.
The U.S. Securities and Exchange Commission (SEC) has not been supportive of trading in cryptocurrency or its derived products and has therefore rejected the siblings last offered in March 2017 that looked to list a bitcoin-tied ETF on the Bats BZX Exchange, referring to chance related with the exchanging and regulatory vulnerability.
Dalia Blass, Director of Division of Investment Management at U.S. Securities and Exchange Commission, said
“Would funds have the information necessary to adequately value cryptocurrencies or cryptocurrency-related products, given their volatility, the fragmentation and general lack of regulation of underlying cryptocurrency markets, and the nascent state and current trading volume in the cryptocurrency futures markets?”
Winklevi or Winklevii are American born rowers and internet entrepreneurs namely Cameron and Tyler Winklevoss. They both participated at the 2008 Beijing Olympics where they both competed in the men’s pair rowing event.
In 2004 they sued the Facebook founder Mark Zuckerberg claiming he stole their ConnectU idea to create the popular social networking site and ultimately settled for $65million.

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