On February 26, 2016, Logos Capital Fund, LLP (“Logos”) filed with the Securities and Exchange Commission (“SEC”) a Form D Notice of Exempt Offering of Securities. As its Form D indicates, Logos is soliciting investments of at least $25,000 for its pooled investment fund. Logos claims an exemption from publicly offering security interests in Logos pursuant to SEC Rule 506(c), which means that Logos is seeking investments only from accredited investors.
The Fund was founded by Marco Streng, the co-founder of Genesis Mining, and the Fund’s managing partner is Björn Tilmann Arzt, global head of structured capital markets at UniCredit. CoinDesk has reported that the Fund is in the process of registering with the German financial regulator, BaFin, so that the Fund may solicit investments in the EU.
Genesis Mining will act as one of the Fund’s initial partners, and reportedly will invest $1 million of its own capital into the Fund. The Fund’s stated investment strategy is to invest in mining and bitcoins. According to Bitcoin Magazine, Mr. Streng has explained that the Fund’s “initial strategy will be to generate bitcoins for . . . investors for the lowest price possible, giving them access to . . . the most exciting investment class that has existed in decades,” and that “[a]ll capital will be invested in mining infrastructure and further developing its operability and production capacity in advance of outside investors joining the fund.” Because Genesis Mining already boasts significant experience in selling its own hosted (i.e., cloud) bitcoin mining services – whereby customers purchase certain agreed-upon amounts of hashpower through Genesis Mining’s machines – and because Genesis Mining thus has the “ability to get the lowest priced electricity and hardware,” Mr. Streng has stated that “most of the [Fund’s initial] investments will be in Genesis Mining operations.”
The launch of Logos presents an interesting development for bitcoin investors. Whereas other bitcoin investment opportunities have been met with skepticism, indeed, some even prosecuted for being Ponzi schemes, Logos appears to be trying to avoid this skepticism by filing with securities regulators. Investors and miners will be watching Logos closely, and its success may spur further investment in the bitcoin mining space.