Correspondence 0000894189-24-002477 from KINETICS MUTUAL FUNDS INC (CIK 0001083387)
KINETICS MUTUAL FUNDS INC (CIK 0001083387)
Date: April 23, 2024 · CIK: 0001083387 · Accession: 0000894189-24-002477
AI Filing Summary & Sentiment
File numbers found in text: 333-78275, 811-09303
Letter
Division of Investment Management Washington, DC 20549 Re: Kinetics Mutual Funds, Inc. (the “Company”) Kinetics Spin-Off and Corporate Restructuring Fund (the “Fund”) File Nos. 333-78275 and 811-09303
Dear Ms. Im-Tang:
This correspondence responds to comments that the Company received from the staff (the “Staff”) of the U.S. Securities and Exchange Commission with respect to Post-Effective Amendment No. 80 to the Company’s Registration Statement on Form N-1A filed February 28, 2024 (the “Amendment”) with respect to the Fund, a series of the Company. For your convenience, the comments have been reproduced with a response following each comment. Capitalized terms not otherwise defined have the same meaning as in the Amendment. We are filing this CORRESP at least five calendar days prior to the effectiveness of this Amendment.
Prospectus
Comment 1.In the Summary Section (Principal Investment Strategy), please disclose that the wholly owned subsidiary’s (the “Subsidiary”) management fee, including any performance fee, if any, is included in the management fees, and the Subsidiary’s expenses are included in other expenses in the Fund’s expense table. Please provide a complete fee table in your response letter filed as correspondence.
Response: The requested change has been made and the Fund’s completed fee table is attached hereto as Exhibit A.
Comment 2.Please disclose that the Fund either does not, or does not currently, intend to create or acquire primary control of any entity which primarily engages in investment activities in securities or other assets other than entities wholly owned by the Fund.
Response: The requested change has been made by adding the following as the last sentence of the sixth paragraph of the "Principal Investment Strategy" section, "The Fund does not intend to create or acquire primary control of any entity which primarily engages in investment activities in securities or other assets other than entities wholly-owned by the Fund."
Comment 3.Please disclose that the Subsidiary includes entities that engage in investment activities in securities or other assets that are primarily controlled by the Fund.
Response: The requested change has been made by adding the following as the sixth sentence of the sixth paragraph of the "Principal Investment Strategy" section, "The Subsidiary includes entities that engage in investment activities in securities or other assets that are primarily controlled by the Fund."
Comment 4.Please disclose that any investment adviser to the Subsidiary complies with the provisions of the Investment Company Act of 1940, as amended (the “1940 Act”) related to investment advisory contracts (Section 15) as if it were an investment adviser to the Fund under Section 2(a)(20) of the 1940 Act. Any investment advisory agreement between the Subsidiary and its investment advisor is a material contract that should be included as an exhibit to the registration statement. If the same person is investment adviser to the both the Fund and the Subsidiary, then for purposes of complying with Section 15c, the reviews of the Fund’s and Subsidiary’s investment advisory agreements may be combined.
Response: The requested change has been made by revising the fourth sentence of the sixth paragraph in the "Principal Investment Strategy" section to read, "The Subsidiary also complies with Section 17 of the 1940 Act, relating to affiliated transactions and custody, and the Investment Adviser complies with Section 15 of the 1940 Act, relating to investment advisory contracts with respect to the Subsidiary." The Fund acknowledges the Staff’s comment regarding its investment advisory agreements.
Comment 5.Please explain in correspondence whether the financial statements of the Subsidiary will be consolidated with those of the Fund, and if not, why not?
Response: The Fund acknowledges the Staff's comment and confirms that it will consolidate the financial statements of the Subsidiary with the financial statements of the Fund.
Comment 6.Please confirm in correspondence that the Subsidiary and its board of directors will agree to inspection by the Staff of the Subsidiary’s books and records, which will be maintained in accordance with Section 31 of the 1940 Act and rules thereunder.
Response: The Fund confirms that the Subsidiary and its board of directors will agree to inspection by the Staff of the Subsidiary’s books and records, which will be maintained in accordance with Section 31 of the 1940 Act and the rules thereunder.
Comment 7.On page 21 of the Prospectus in the section titled, Principal Investment Risks -- Tax Risks with respect to a controlled foreign corporation (a “CFC”), please confirm in correspondence that the CFC and its board of directors will agree to designate an agent for service of process in the United States.
Response: The Fund confirms that the Subsidiary and its board will agree to designate an agent for service of process in the US.
Comment 8.On page 3 of the Prospectus in the section titled, Principal Investment Strategy, please disclose in bold face type that the Fund will not invest directly in Bitcoin or other cryptocurrency assets. We note that you generally use the term “cryptocurrency” to describe Bitcoin and similar crypto assets. Please generally use the term “crypto asset” or “digital asset” and clarify that although Bitcoin and similar crypto assets may be referred to as cryptocurrencies, virtual currencies, or digital currencies, they currently are not widely accepted as a medium of exchange.
Response: The requested changes have been made (see proposed revision in response to the Staff's Comment 9 below.)
Comment 9.Please specify the crypto assets in which the Fund may invest indirectly as well as other investment vehicles that may be considered for this purpose. With regard to other investment vehicles, please describe their investment objective and strategies, as well as related risks and challenges, and disclose whether they are registered as investment companies under the 1940 Act. Insofar as they are not so registered (e.g., for instance spot bitcoin or exchange-traded products (ETPs)), please disclose that investors in these products do not receive protections under the 1940 Act.
Response: The Fund will remove the fourth paragraph under the “Principal Investment Strategy” and replace it with the following:
“The Fund may invest in crypto assets, including bitcoin or BTC, bitcoin cash or BCH, Litecoin or LTC, indirectly through other investment vehicles. The Fund will not invest directly in Bitcoin or other crypto assets. Certain of these vehicles may not be registered under the 1940 Act and do not receive the protections of the 1940 Act. The Fund may contribute a portion of its indirect holdings in crypto assets to a wholly-owned and controlled subsidiary organized under the laws of the Cayman Islands (a “Subsidiary”).
The Fund may invest indirectly in bitcoin through a Delaware statutory trust, Grayscale Bitcoin Trust ETF (“GBTC”) and through other pooled investment vehicles that provide exposure to digital commodities. Grayscale Bitcoin Trust ETF is one of the first spot Bitcoin ETFs in the U.S. It enables investors to gain exposure to bitcoin in the form of a security while avoiding the challenges of buying, storing, and safekeeping bitcoin, directly.
The Fund may invest indirectly in bitcoin cash through a Delaware statutory trust, Grayscale Bitcoin Cash Trust and through other pooled investment vehicles that provide exposure to digital commodities. Grayscale Bitcoin Cash Trust offers shares on a periodic basis through private placements pursuant to the exemption from registration provided by Rule 506(c) under Regulation D of the Securities Act, and its shares are also available over-the-counter. The shares of the Grayscale Bitcoin Cash Trust may trade at a premium or discount.
The Fund may invest indirectly in Litecoin through a Delaware statutory trust, Grayscale Litecoin Trust and through other pooled investment vehicles that provide exposure to digital commodities. Grayscale Litecoin Trust offers shares on a periodic basis through private placements pursuant to the exemption from registration provided by Rule 506 (c) under Regulation D of the Securities Act, and its shares are also available over-the-counter. The shares of the Grayscale Litecoin Trust may trade at a premium or discount."
In addition, the Fund will replace the disclosure under “Cryptocurrency Exposure Risk” under the “Principal Risks of Investing” section with the following:
Crypto Asset Exposure Risk
Crypto assets (also referred to as “virtual currencies” and “digital currencies”) are digital assets designed to act as a medium of exchange. Although crypto assets are an emerging asset class, they are not presently widely accepted as a medium of exchange. There are thousands of crypto assets, the most well-known of which is bitcoin.
Bitcoin or BTC was the first decentralized crypto asset. Bitcoin is a digital commodity that is not issued by a government, bank or central organization. Bitcoin exists on an online, peer-to-peer computer network that hosts a public transaction ledger where crypto assets transfers are recorded (the “Blockchain”). Bitcoin has no physical existence beyond the record of transactions on the Blockchain. The bitcoin network allows people to exchange tokens of value, bitcoins, which are recorded on a public transaction ledger known as a blockchain. The Fund may invest indirectly in
bitcoin through a Delaware statutory trust, Grayscale Bitcoin Trust ETF (“GBTC”) and through other pooled investment vehicles that provide exposure to digital commodities. Grayscale Bitcoin Trust ETF is one of the first spot Bitcoin ETFs in the U.S. It enables investors to gain exposure to bitcoin in the form of a security while avoiding the challenges of buying, storing, and safekeeping bitcoin, directly.
Bitcoin cash or BCH, an alternative software implementation of bitcoin, is very similar to bitcoin, but operates on a separate Blockchain and has the ability to process transactions more quickly than the bitcoin network. The Fund may invest indirectly in bitcoin cash through a Delaware statutory trust, Grayscale Bitcoin Cash Trust and through other pooled investment vehicles that provide exposure to digital commodities. Grayscale Bitcoin Cash Trust offers shares on a periodic basis through private placements pursuant to the exemption from registration provided by Rule 506(c) under Regulation D of the Securities Act, and its shares are also available over-the-counter. The shares of the Grayscale Bitcoin Cash Trust may trade at a premium or discount.
Litecoin or LTC, is a decentralized peer-to-peer crypto asset and open-source software project that was inspired by bitcoin and enables instant payments to anyone in the world. The Fund may invest indirectly in Litecoin through a Delaware statutory trust, Grayscale Litecoin Trust and through other pooled investment vehicles that provide exposure to digital commodities. Grayscale Litecoin Trust offers shares on a periodic basis through private placements pursuant to the exemption from registration provided by Rule 506(c) under Regulation D of the Securities Act, and its shares are also available over-the-counter. The shares of the Grayscale Litecoin Trust may trade at a premium or discount.
In addition to the general risks of investing in other investment vehicles, the value of the Fund’s indirect investments in crypto assets are subject to fluctuations in the value of the crypto asset, which can be highly volatile. The value of cryptocurrencies is determined by the supply and demand for crypto assets in the global market for the trading of crypto assets, which consists primarily of transactions on crypto asset trading platforms. The value of crypto assets has been, and may continue to be, substantially dependent on speculation, such that trading and investing in crypto assets generally may not be based on fundamental analysis. The Fund’s exposure to crypto assets can result in substantial losses to the Fund.
Crypto assets facilitate decentralized, peer-to-peer financial exchange and value storage that is used like money, without the oversight of a central authority or banks. The value of crypto assets are not backed by any government, corporation, or other identified body. Similar to fiat currencies (i.e., a currency that is backed by a central bank or a national, supra-national or quasi-national organization), cryptocurrencies are susceptible to theft, loss and destruction.
Crypto assets trade on crypto asset trading platforms, which are largely unregulated and may therefore be more exposed to fraud and failure than established, regulated exchanges for securities, derivatives and other currencies. These crypto asset trading platforms can cease operating temporarily or even permanently, resulting in the potential loss of users’ crypto assets or other market disruptions. Crypto asset trading platforms may be more exposed to the risk of market manipulation than exchanges for more traditional assets. Individuals or organizations holding a large amount of crypto assets in which the Fund may invest indirectly (also known as “whales”) may have the ability to manipulate the prices of those crypto assets. Crypto asset trading platforms on which crypto assets are traded are or may become subject to enforcement actions by regulatory authorities. Crypto asset trading platforms that are regulated typically must comply with minimum net worth, cybersecurity, and anti-money laundering requirements, but are not typically required to protect customers or their markets to the same extent that regulated securities exchanges or futures exchanges are required to do so. Furthermore, many crypto asset
trading platforms lack certain safeguards established by more traditional exchanges to enhance the stability of trading on the exchange, such as measures designed to prevent sudden drops in value of items traded on the exchange (i.e., “flash crashes”). As a result, the prices of crypto assets on crypto asset trading platforms may be subject to larger and more frequent sudden declines than assets traded on more traditional exchanges.
Crypto Asset Industry Risk
The crypto asset industry is a newer, speculative, and still-developing industry that faces many risks. The crypto asset industry may still be experiencing a bubble or may experience a bubble again in the future. For example, in the first half of 2022, each of Celsius Network, Voyager Digital Ltd., and Three Arrows Capital declared bankruptcy, resulting in a loss of confidence in participants of the digital asset ecosystem and negative publicity surrounding digital assets more broadly. In November 2022, FTX Trading Ltd. (“FTX”), one of the largest digital asset platforms by volume at the time, halted customer withdrawals amid rumors of the company’s liquidity issues and likely insolvency, which were subsequently corroborated by its CEO. Shortly thereafter, FTX’s CEO resigned and FTX and many of its affiliates filed for bankruptcy in the United States, while other affiliates have entered insolvency, liquidation, or similar proceedings around the globe, following which the U.S. Department of Justice brought criminal fraud and other charges, and the SEC and CFTC brought civil securities and commodities fraud charges, against certain of FTX’s and its affiliates’ senior executives, including its former CEO. In addition, several other entities in the crypto asset industry filed for bankruptcy following FTX’s bankruptcy filing, such as BlockFi Inc. and Genesis Global Capital, LLC. In response to these events, the
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CORRESP 1 filename1.htm Document Kinetics Mutual Funds, Inc. 615 East Michigan Street | Milwaukee, Wisconsin 53202 April 23, 2024 Soo Im-Tang U.S. Securities and Exchange Commission Division of Investment Management 100 F Street NE Washington, DC 20549 Re: Kinetics Mutual Funds, Inc. (the “Company”) Kinetics Spin-Off and Corporate Restructuring Fund (the “Fund”) File Nos. 333-78275 and 811-09303 Dear Ms. Im-Tang: This correspondence responds to comments that the Company received from the staff (the “Staff”) of the U.S. Securities and Exchange Commission with respect to Post-Effective Amendment No. 80 to the Company’s Registration Statement on Form N-1A filed February 28, 2024 (the “Amendment”) with respect to the Fund, a series of the Company. For your convenience, the comments have been reproduced with a response following each comment. Capitalized terms not otherwise defined have the same meaning as in the Amendment. We are filing this CORRESP at least five calendar days prior to the effectiveness of this Amendment. Prospectus Comment 1.In the Summary Section (Principal Investment Strategy), please disclose that the wholly owned subsidiary’s (the “Subsidiary”) management fee, including any performance fee, if any, is included in the management fees, and the Subsidiary’s expenses are included in other expenses in the Fund’s expense table. Please provide a complete fee table in your response letter filed as correspondence. Response: The requested change has been made and the Fund’s completed fee table is attached hereto as Exhibit A. Comment 2.Please disclose that the Fund either does not, or does not currently, intend to create or acquire primary control of any entity which primarily engages in investment activities in securities or other assets other than entities wholly owned by the Fund. Response: The requested change has been made by adding the following as the last sentence of the sixth paragraph of the "Principal Investment Strategy" section, "The Fund does not intend to create or acquire primary control of any entity which primarily engages in investment activities in securities or other assets other than entities wholly-owned by the Fund." Comment 3.Please disclose that the Subsidiary includes entities that engage in investment activities in securities or other assets that are primarily controlled by the Fund. Response: The requested change has been made by adding the following as the sixth sentence of the sixth paragraph of the "Principal Investment Strategy" section, "The Subsidiary includes entities that engage in investment activities in securities or other assets that are primarily controlled by the Fund." 1 Comment 4.Please disclose that any investment adviser to the Subsidiary complies with the provisions of the Investment Company Act of 1940, as amended (the “1940 Act”) related to investment advisory contracts (Section 15) as if it were an investment adviser to the Fund under Section 2(a)(20) of the 1940 Act. Any investment advisory agreement between the Subsidiary and its investment advisor is a material contract that should be included as an exhibit to the registration statement. If the same person is investment adviser to the both the Fund and the Subsidiary, then for purposes of complying with Section 15c, the reviews of the Fund’s and Subsidiary’s investment advisory agreements may be combined. Response: The requested change has been made by revising the fourth sentence of the sixth paragraph in the "Principal Investment Strategy" section to read, "The Subsidiary also complies with Section 17 of the 1940 Act, relating to affiliated transactions and custody, and the Investment Adviser complies with Section 15 of the 1940 Act, relating to investment advisory contracts with respect to the Subsidiary." The Fund acknowledges the Staff’s comment regarding its investment advisory agreements. Comment 5.Please explain in correspondence whether the financial statements of the Subsidiary will be consolidated with those of the Fund, and if not, why not? Response: The Fund acknowledges the Staff's comment and confirms that it will consolidate the financial statements of the Subsidiary with the financial statements of the Fund. Comment 6.Please confirm in correspondence that the Subsidiary and its board of directors will agree to inspection by the Staff of the Subsidiary’s books and records, which will be maintained in accordance with Section 31 of the 1940 Act and rules thereunder. Response: The Fund confirms that the Subsidiary and its board of directors will agree to inspection by the Staff of the Subsidiary’s books and records, which will be maintained in accordance with Section 31 of the 1940 Act and the rules thereunder. Comment 7.On page 21 of the Prospectus in the section titled, Principal Investment Risks -- Tax Risks with respect to a controlled foreign corporation (a “CFC”), please confirm in correspondence that the CFC and its board of directors will agree to designate an agent for service of process in the United States. Response: The Fund confirms that the Subsidiary and its board will agree to designate an agent for service of process in the US. Comment 8.On page 3 of the Prospectus in the section titled, Principal Investment Strategy, please disclose in bold face type that the Fund will not invest directly in Bitcoin or other cryptocurrency assets. We note that you generally use the term “cryptocurrency” to describe Bitcoin and similar crypto assets. Please generally use the term “crypto asset” or “digital asset” and clarify that although Bitcoin and similar crypto assets may be referred to as cryptocurrencies, virtual currencies, or digital currencies, they currently are not widely accepted as a medium of exchange. Response: The requested changes have been made (see proposed revision in response to the Staff's Comment 9 below.) 2 Comment 9.Please specify the crypto assets in which the Fund may invest indirectly as well as other investment vehicles that may be considered for this purpose. With regard to other investment vehicles, please describe their investment objective and strategies, as well as related risks and challenges, and disclose whether they are registered as investment companies under the 1940 Act. Insofar as they are not so registered (e.g., for instance spot bitcoin or exchange-traded products (ETPs)), please disclose that investors in these products do not receive protections under the 1940 Act. Response: The Fund will remove the fourth paragraph under the “Principal Investment Strategy” and replace it with the following: “The Fund may invest in crypto assets, including bitcoin or BTC, bitcoin cash or BCH, Litecoin or LTC, indirectly through other investment vehicles. The Fund will not invest directly in Bitcoin or other crypto assets. Certain of these vehicles may not be registered under the 1940 Act and do not receive the protections of the 1940 Act. The Fund may contribute a portion of its indirect holdings in crypto assets to a wholly-owned and controlled subsidiary organized under the laws of the Cayman Islands (a “Subsidiary”). The Fund may invest indirectly in bitcoin through a Delaware statutory trust, Grayscale Bitcoin Trust ETF (“GBTC”) and through other pooled investment vehicles that provide exposure to digital commodities. Grayscale Bitcoin Trust ETF is one of the first spot Bitcoin ETFs in the U.S. It enables investors to gain exposure to bitcoin in the form of a security while avoiding the challenges of buying, storing, and safekeeping bitcoin, directly. The Fund may invest indirectly in bitcoin cash through a Delaware statutory trust, Grayscale Bitcoin Cash Trust and through other pooled investment vehicles that provide exposure to digital commodities. Grayscale Bitcoin Cash Trust offers shares on a periodic basis through private placements pursuant to the exemption from registration provided by Rule 506(c) under Regulation D of the Securities Act, and its shares are also available over-the-counter. The shares of the Grayscale Bitcoin Cash Trust may trade at a premium or discount. The Fund may invest indirectly in Litecoin through a Delaware statutory trust, Grayscale Litecoin Trust and through other pooled investment vehicles that provide exposure to digital commodities. Grayscale Litecoin Trust offers shares on a periodic basis through private placements pursuant to the exemption from registration provided by Rule 506 (c) under Regulation D of the Securities Act, and its shares are also available over-the-counter. The shares of the Grayscale Litecoin Trust may trade at a premium or discount." In addition, the Fund will replace the disclosure under “Cryptocurrency Exposure Risk” under the “Principal Risks of Investing” section with the following: Crypto Asset Exposure Risk Crypto assets (also referred to as “virtual currencies” and “digital currencies”) are digital assets designed to act as a medium of exchange. Although crypto assets are an emerging asset class, they are not presently widely accepted as a medium of exchange. There are thousands of crypto assets, the most well-known of which is bitcoin. Bitcoin or BTC was the first decentralized crypto asset. Bitcoin is a digital commodity that is not issued by a government, bank or central organization. Bitcoin exists on an online, peer-to-peer computer network that hosts a public transaction ledger where crypto assets transfers are recorded (the “Blockchain”). Bitcoin has no physical existence beyond the record of transactions on the Blockchain. The bitcoin network allows people to exchange tokens of value, bitcoins, which are recorded on a public transaction ledger known as a blockchain. The Fund may invest indirectly in 3 bitcoin through a Delaware statutory trust, Grayscale Bitcoin Trust ETF (“GBTC”) and through other pooled investment vehicles that provide exposure to digital commodities. Grayscale Bitcoin Trust ETF is one of the first spot Bitcoin ETFs in the U.S. It enables investors to gain exposure to bitcoin in the form of a security while avoiding the challenges of buying, storing, and safekeeping bitcoin, directly. Bitcoin cash or BCH, an alternative software implementation of bitcoin, is very similar to bitcoin, but operates on a separate Blockchain and has the ability to process transactions more quickly than the bitcoin network. The Fund may invest indirectly in bitcoin cash through a Delaware statutory trust, Grayscale Bitcoin Cash Trust and through other pooled investment vehicles that provide exposure to digital commodities. Grayscale Bitcoin Cash Trust offers shares on a periodic basis through private placements pursuant to the exemption from registration provided by Rule 506(c) under Regulation D of the Securities Act, and its shares are also available over-the-counter. The shares of the Grayscale Bitcoin Cash Trust may trade at a premium or discount. Litecoin or LTC, is a decentralized peer-to-peer crypto asset and open-source software project that was inspired by bitcoin and enables instant payments to anyone in the world. The Fund may invest indirectly in Litecoin through a Delaware statutory trust, Grayscale Litecoin Trust and through other pooled investment vehicles that provide exposure to digital commodities. Grayscale Litecoin Trust offers shares on a periodic basis through private placements pursuant to the exemption from registration provided by Rule 506(c) under Regulation D of the Securities Act, and its shares are also available over-the-counter. The shares of the Grayscale Litecoin Trust may trade at a premium or discount. In addition to the general risks of investing in other investment vehicles, the value of the Fund’s indirect investments in crypto assets are subject to fluctuations in the value of the crypto asset, which can be highly volatile. The value of cryptocurrencies is determined by the supply and demand for crypto assets in the global market for the trading of crypto assets, which consists primarily of transactions on crypto asset trading platforms. The value of crypto assets has been, and may continue to be, substantially dependent on speculation, such that trading and investing in crypto assets generally may not be based on fundamental analysis. The Fund’s exposure to crypto assets can result in substantial losses to the Fund. Crypto assets facilitate decentralized, peer-to-peer financial exchange and value storage that is used like money, without the oversight of a central authority or banks. The value of crypto assets are not backed by any government, corporation, or other identified body. Similar to fiat currencies (i.e., a currency that is backed by a central bank or a national, supra-national or quasi-national organization), cryptocurrencies are susceptible to theft, loss and destruction. Crypto assets trade on crypto asset trading platforms, which are largely unregulated and may therefore be more exposed to fraud and failure than established, regulated exchanges for securities, derivatives and other currencies. These crypto asset trading platforms can cease operating temporarily or even permanently, resulting in the potential loss of users’ crypto assets or other market disruptions. Crypto asset trading platforms may be more exposed to the risk of market manipulation than exchanges for more traditional assets. Individuals or organizations holding a large amount of crypto assets in which the Fund may invest indirectly (also known as “whales”) may have the ability to manipulate the prices of those crypto assets. Crypto asset trading platforms on which crypto assets are traded are or may become subject to enforcement actions by regulatory authorities. Crypto asset trading platforms that are regulated typically must comply with minimum net worth, cybersecurity, and anti-money laundering requirements, but are not typically required to protect customers or their markets to the same extent that regulated securities exchanges or futures exchanges are required to do so. Furthermore, many crypto asset 4 trading platforms lack certain safeguards established by more traditional exchanges to enhance the stability of trading on the exchange, such as measures designed to prevent sudden drops in value of items traded on the exchange (i.e., “flash crashes”). As a result, the prices of crypto assets on crypto asset trading platforms may be subject to larger and more frequent sudden declines than assets traded on more traditional exchanges. Crypto Asset Industry Risk The crypto asset industry is a newer, speculative, and still-developing industry that faces many risks. The crypto asset industry may still be experiencing a bubble or may experience a bubble again in the future. For example, in the first half of 2022, each of Celsius Network, Voyager Digital Ltd., and Three Arrows Capital declared bankruptcy, resulting in a loss of confidence in participants of the digital asset ecosystem and negative publicity surrounding digital assets more broadly. In November 2022, FTX Trading Ltd. (“FTX”), one of the largest digital asset platforms by volume at the time, halted customer withdrawals amid rumors of the company’s liquidity issues and likely insolvency, which were subsequently corroborated by its CEO. Shortly thereafter, FTX’s CEO resigned and FTX and many of its affiliates filed for bankruptcy in the United States, while other affiliates have entered insolvency, liquidation, or similar proceedings around the globe, following which the U.S. Department of Justice brought criminal fraud and other charges, and the SEC and CFTC brought civil securities and commodities fraud charges, against certain of FTX’s and its affiliates’ senior executives, including its former CEO. In addition, several other entities in the crypto asset industry filed for bankruptcy following FTX’s bankruptcy filing, such as BlockFi Inc. and Genesis Global Capital, LLC. In response to these events, the