http://blogs.wsj.com/moneybeat/2013/07/01/winklevoss-twins-file-to-launch-bitcoin-exchange-traded-product/

Breaking news

The Winklevoss Bitcoin Trust (Trust) will issue Winklevoss Bitcoin Shares (Shares) which represent units of fractional undivided beneficial interest in and ownership of the Trust. Math-Based Asset Services LLC is the sponsor of the Trust (Sponsor) and [TRUSTEE] is the trustee and custodian of the Trust (Trustee) using proprietary and patent-pending technology to administer the Trust. The Trust intends to issue additional Shares on a continuous basis.

The Shares may be purchased from the Trust only in one or more blocks of [50,000] Shares (a block of [50,000] Shares is called a Basket). The Trust will issue Shares in Baskets to certain authorized participants (Authorized Participants) on an ongoing basis as described in “Plan of Distribution.” Baskets will be offered continuously at the net asset value (NAV) for [50,000] Shares on the day that an order to create a Basket is accepted by the Trustee. The Trust will not issue fractions of a Basket.

The Trust holds “Bitcoins,” a digital commodity based on an open source cryptographic protocol existing on the online, end-user-to-end-user network hosting the public transaction ledger, known as the “Blockchain,” and the source code comprising the basis for the cryptographic and algorithmic protocols governing the issuance of and transactions in Bitcoins (the “Bitcoin Network”).

a Basket equals a block of [50,000] Shares

The initial number of Bitcoins required for deposit with the Trust to create Shares is [10,000] per Basket.

The number of Bitcoins required to create a Basket, or to be delivered upon the redemption of a Basket, will gradually decrease over time, due to the accrual of the Trust’s expenses, the transfer of the Trust’s Bitcoins to pay the Sponsor’s Fee and the transfer of the Trust’s Bitcoins to pay any Trust expenses not assumed by the Sponsor.

the Trust is determined to be a “money transmitter” under the regulations promulgated by FinCEN under the authority of the US Bank Secrecy Act and is required to comply with certain FinCEN regulations thereunder, and the Trust receives notice from the Sponsor that, because of that determination, termination of the Trust is advisable;

Trust will be terminated if:


How exactly would they not be considered a money transmitter?  They're acting on behalf of a third party (the investor) to purchase Bitcoin.

Now your 401k can invest in bitcoins,  retirement funds, every wall street trader...  this is opening floodgates.

Because just like they said, they are treating bitcoin as a commodity, and not a currency. To them, and for this security, bitcoin is being treated the same as gold or any other commodity that can be securitized.

Cherry picking from the S-1:

If the IPO is for 1 million shares to raise $20 million and from the S-1:


This puts their estimated fair value of Bitcoin at $100, correct?