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Bitwise’s Unexpected Donations and Collaboration with Coinbase

Bitwise’s View on Donations Received by the Fund’s Portfolio:

  1. Bitwise recently disclosed the portfolio of its fund, unexpectedly receiving donations in Bitcoin.
  2. The received assets, including Bitcoin NFTs, will benefit BITB shareholders, according to Bitwise’s CIO.
  3. In the event of unintentional receipt of assets, Bitwise can sell them to distribute cash to shareholders.

Donations That Will Benefit BITB Shareholders

Bitwise recently unveiled the on-chain portfolio of its Bitcoin ETF cash fund, a first in the industry.

Shortly after, the portfolio began to receive unexpected donations from crypto users. These donations included small amounts of Bitcoin, BRC-20 tokens, Bitcoin domain names, and a variety of Bitcoin NFTs.

The total assets received exceeded $6,000. Matt Hougan, Bitwise’s CIO, confirmed that all received assets would benefit the BITB fund shareholders.

Bitwise and Coinbase Collaborate to Block OFAC Sanctioned Addresses

According to the fund’s S-1 filing, if Bitwise unintentionally receives cryptocurrencies or other assets, the company may sell them. The profits from this sale are then distributed to the fund shareholders.

Now, a question arises regarding OFAC-sanctioned addresses: Bitcoin wallets simply cannot prevent the receipt of funds. Indeed, once an address is publicly revealed, anyone has the power to send digital assets to it, even from OFAC-sanctioned addresses.

However, Bitwise addresses this issue at the asset custodian level by using Coinbase as the custodian. Coinbase takes care of blocking (after receiving the funds) OFAC-sanctioned addresses and works with clients to ensure that funds are blocked and reported in compliance with the law.

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