Global Advisors acquired XBT Provider after KnC Miner filed for bankruptcy - Brave New Coin (2024)

Global Advisors (Jersey) Limited(GAJL) announcedon Tuesday that it has acquired Swedish financial company XBT Provider,issuer of Bitcoin Tracker One (Ticker: COINXBT)and Bitcoin Tracker EUR (Ticker: COINXBE),listed on Nasdaq Nordic. GAJL also became XBT Provider’s new guarantor, ensuring its loans are paid if they have any financial difficulty in the future.

COINXBT-**COINXBEOverview, 17th June, 2016 | 06:54:00 UTC

The Stockholm-based XBT Provider was the first companyto offer a bitcoin Exchange Traded Note (ETN). Trading of the company’s two instruments was halted by Nasdaq Nordic on May 27, following the bankruptcy filing of its former guarantor, KnC Group. Nasdaq approved GAJL as the new guarantor allowing trading of both instruments to resume on Tuesday at Nasdaq Nordic in Stockholm.

“Nasdaq has approved Global Advisors (Jersey) Limited as the new guarantor of the ETCs (Exchange Traded Certificates). The XBT Group has also, effective today, become a subsidiary of Global Advisors (Jersey) Limited (GAJL).”

• Global Advisors

The two ETNs, Bitcoin Tracker One and Bitcoin Tracker EUR, are “designed to provide investors with convenient and liquid access to the returns of the underlying asset, bitcoin,” according to the company. During the time which trading of XBT Provider instruments was halted, bitcoin prices have risen almost US$200 during the two-week absence.

Bitcoin price over the last 30 days – 17th June 2016

When trading resumed,the price of Bitcoin Tracker One jumped from 18.42 to 27.77, up 42.72 percent, while Bitcoin Tracker EUR climbed from 19.98 to close at 30.36, up 43.89 percent. The two instruments became Nasdaq Nordic’s second and third best advancers on Tuesday.

The two ETNs began tradingin May of last year, offering anyone from anywhere in the world the ability to invest in bitcoin as an Exchange Traded Note. (ETN) "It can be hard for some investors to access the bitcoin market," GAJL CIO Daniel Masters told Reuterson Tuesday. "This gives one-click access to bitcoin by anyone on an electronic trading platform that can access Nasdaq’s global marketplace." Masters is best known for his work at JP Morgan in the 1990s running the energy trading desk for the investment bank.

The opportunity with XBT Trading proved too good for Masters to pass by. "I was on holiday with my family when we heard about XBT, I flew to Stockholm the next day and stayed there for seven days," Masters told Reuters.

Masters’ GAJL is a fully regulated, registered private company based in St Helier, Jersey, in the Channel Islands between England and France. The geography of Jersey gives it certain special economic advantages which are ideal for offering bitcoin investments, ever since the beginning of the year when Jersey’s regulator, the Financial Services Commission, passed legislation to explicitly permit and promote bitcoin and blockchain businesses on the island.

GAJL was already present and decided to focus on bitcoin investment products and blockchain technology companies at that time, and XBT Provider is their first acquisition in the space.

“We believe bitcoin will change the world. Acquiring control of XBT Group is a unique opportunity to increment our strategy of creating access to bitcoin as an asset class. XBT’s products offer one-click, delta-one exposure to bitcoin via a wide range of electronic trading platforms. We look forward to sharing with XBT the benefits our best-practices and experience managing the Global Advisors Bitcoin Investment Fund.”

• Daniel Masters, GAJL Co-Founder and Director

The troubles for XBT Provider began when its former guarantor, KnC Group filedfor bankruptcy at the District Court of Stockholm on May 27th. KnC Group is the guarantor of both Bitcoin Tracker One and Bitcoin Tracker EUR as well as XBT Provider’s majority shareholder. KnC Group is well known for its subsidiary, KnCMiner.The mining rig maker is one of the largest bitcoin mining hardware manufacturers, and is also based in Stockholm.

According to XBT Provider, “the decision for KnC Group to file for bankruptcy is due to the impending halving of rewards for bitcoin mining”, the company added, “given current market conditions, would result in an eroding and likely irreversible financial performance.”

Without a guarantor, Nasdaq halted trading of the two ETNs pending approval of a new guarantor. However, XBT Provider maintained that their assets were not affected in any way by the KnC Group’s bankruptcy filing. “XBT Provider is at all times fully hedged, and always holds bitcoins equivalent to the value of ETCs issued,” the company reiterated throughout the trading halt period.

"Since we are fully hedged at all times, investors should not be alarmed by developments in KnC Group. Our instruments have been set up from the start to handle these types of contingencies. Additionally, we have recently published our annualfinancial results, audited by PwC. These further underline our financial health”.
— – Johan Wattenström, XBT Group CEO and co-founder

XBT Provider will remain in Stockholm but now be subject to the laws of Jersey for trading purposes. Now under the control of GAJL, it must adhere to the same “compliance, reporting, risk management and corporate governance” per Jersey regulations as GAJL does. “The full prospectus,” Wattenström explained, “as well as the audited annual report, is available on xbtprovider.com – a new prospectus incorporating these changes will be issued as soon as possible.”

“We would like to thank Nasdaq and Global Advisors for their hard work and commitment to achieving a fast resolution. We have been very satisfied cooperating with all involved parties and are looking forward to a long-term partnership. As part of Global Advisors, we now have the capabilities and means to accelerate the expansion of our business and provide investors with a broad range of products and services for safe and easy exposure to bitcoin markets.”

• Wattenström