Frequently Asked Questions

General questions

• What is Digital Capital NFT?

  Digital Capital NFT enables investors to access the digital economy through a family of secure, regulated, and future-forward investment products. Founded in 2021, Digital Capital NFT has a proven track record. Investors, advisors, and allocators turn to Digital Capital NFT’s private placements, public quotations, and ETFs for a single asset, diversified, and thematic exposure. For more information or follow-up questions, please contact us directly at mail@digitalсnft.com.

• What are Digital Capital NFT’s Investment Products?

  Each Digital Capital NFT digital asset investment product (a “Product”) is at various stages of this lifecycle, with the ultimate goal being conversion of the product into an ETF.. We understand that for many, the public discourse around ETFs may seem novel, but this is a subject that Digital Capital NFT has been examining closely from both a commercial and regulatory perspective for several years.

• Why should I own shares of the Products over purchasing digital assets outright?

  Buying and holding coins directly means you must set up a digital wallet where you buy and store your digital assets. Our Products offer investors an easy way to gain exposure to digital assets without the time and effort of storing and safekeeping it. Just as with certain other retail investments, investors may quickly and easily buy and sell shares of their investment versus the time it may require to manage coins directly.
  Certain Digital Capital NFT products may be accessed in brokerage accounts and in certain tax-advantaged accounts (e.g. IRAs, Self-Directed IRAs)

• What are the Products' fees?

  Each Product charges an annual management fee, which includes the costs associated with administration and safekeeping. The fee is charged based on the total amount of tokens underlying the trust, and accrues daily. The ratio of digital asset(s) to shares will decay by this management fee over the course of a year. We expect this fee to be the only ordinary recurring expense for each Product. There is no performance fee. For further details on each Product’s fees, please review each Offered Product’s Private Placement Memorandum or each Product’s annual and quarterly reports, as applicable.

• What is the difference between purchasing shares directly from an Offered Product as opposed to purchasing such Product’s shares trading on the OTCQX® Best Market?

  Accredited investors are eligible to directly invest in an Offered Product and purchase shares at such Offered Product’s daily “Holdings per Share” (non-GAAP Net Asset Value based on the Offered Product’s applicable digital asset reference rate). Shares purchased directly from an Offered Product are restricted and subject to significant limitations on resale and transferability.

  Conversely, investors may choose to purchase a Product’s eligible shares on the OTCQX® Best Market at the applicable market price. These securities have been deemed freely tradeable under SEC Rule 144 and are not subject to restrictions on resale or transferability once purchased. The Products listed below are currently publicly quoted on the OTCQX® Best Market and available to all individual and institutional investors.

• How is each Product’s “Holdings” (non-GAAP) calculated?

  Each Product’s Holdings is calculated each business day at 4 p.m., New York time and subsequently published. The Product’s Holdings calculation is based on such Product’s applicable digital asset reference rate, taking into account the volume across the major digital asset exchanges that comprise such digital asset reference rate. For further details on how Holdings is calculated, please review each Offered Product’s Private Placement Memorandum or each Product’s annual and quarterly reports, as applicable. Each Product’s Holdings is calculated using non-GAAP methodology.

• Can I purchase shares of a Product in my retirement account?

  Yes. It is possible that your IRA or retirement account provider may allow you to purchase shares in a Product. For additional information, please speak with your IRA provider . Please note that Digital Capital NFT does not and will not provide any advice or recommendation regarding investment in any Product and that you should consult your own advisers before making any decision to purchase shares in a Product.

• How are the digital assets underlying each Product’s shares safeguarded?

  Each Product’s assets are stored in offline storage, or “cold” storage, with Coinbase Custody Trust Company, LLC, as (the “Custodian”). The Custodian is a fiduciary under § 100 of the New York Banking Law and a qualified custodian for purposes of Rule 206(4)-2(d)(6) under the Investment Advisers Act of 1940, as amended. For more information about the Custodian, please visit their site.

• What are the tax consequences of owning shares in the Products?

  Products that are Delaware Statutory Trusts

  Each single-asset Product intends to take the position that it is a grantor trust for U.S. federal income tax purposes. Assuming that such Product is a grantor trust, shareholders generally will be treated as if they directly owned their pro rata shares of the underlying assets held in such Product. Shareholders also will be treated as if they directly received their respective pro rata shares of such Product’s income, and directly incurred their pro rata shares of such Product’s expenses. Most state and local tax authorities follow U.S. income tax rules in this regard. Prospective investors in such Product should discuss the tax consequences of an investment in such Product with their tax advisors.

  Products that are Cayman Islands LLCs

  For U.S. federal income tax purposes, Digital Capital NFT Digital Large Cap Fund may be a passive foreign investment company (a “PFIC”) and, in certain circumstances, may be a controlled foreign corporation (a “CFC”). Digital Capital NFT Digital Large Cap Fund™ will make available a PFIC Annual Information Statement that will include information required to permit each eligible shareholder to make a “qualified electing fund” election (a “QEF Election”) with respect to Digital Capital NFT Digital Large Cap Fund. Each shareholder that is a taxable U.S. person for U.S. federal income tax purposes is urged to make a QEF Election with respect to Digital Capital NFT Digital Large Cap Fund. Prospective investors in Digital Capital NFT Digital Large Cap Fund should discuss the U.S. federal income tax consequences of an investment in Digital Capital NFT Digital Large Cap Fund with their tax advisors, including the consequences to them of an investment in a PFIC or CFC.

• Can I Purchase shares in the Products with digital assets I already own?

  Yes. Existing and prospective investors may contribute coins in- kind for shares of Digital Capital NFT’s single-asset Products. Assuming that each Product is treated as a grantor trust for U.S. federal income tax purposes, such contributions should be a non-taxable event. All investors should discuss the tax consequences of an investment in Digital Capital NFT’s family of Products with their tax advisors and review the section entitled “Certain U.S. Federal Income Tax Consequences” in each Offered Product’s Private Placement Memorandum or each Product’s annual and quarterly reports, as applicable, before investing in a Digital Capital NFT single-asset Product or considering an in-kind contribution of coins to a Product.

• What are the risks of investing in a Product?

  Investments in the Products are speculative investments that involve high degrees of risk, including loss of invested funds. Digital Capital NFT Products are not suitable for any investor that cannot afford loss of the entire investment. Carefully consider each Product’s investment objectives, risk factors, fees and expenses before investing. This and other information can be found in each Product’s private placement memorandum, which may be obtained from Digital Capital NFT and, for each Product registered with the SEC and/or listed on the OTC Markets, such Product’s annual report or information statement, which may be obtained by visiting the SEC’s website for Products that are SEC reporting or the OTC Markets website for Products that are quoted on OTC Markets. Reports on OTC Markets are not prepared in accordance with SEC requirements and may not contain all information that is useful for an informed investment decision. Read these documents carefully before investing.

• What is an accredited investor?

  Only accredited investors are eligible to invest in the Offered Products. An accredited investor includes:

  • Any natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with that person’s spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year; or
  • Any natural person whose individual net worth, or joint net worth with that person’s spouse, exceeds $1,000,000 (excluding the value of the person’s primary residence and certain indebtedness secured by such person’s primary residence).
  • Individual investors who hold, in good standing, certain professional certifications and designations and other credentials designated by the Commission as qualifying for accredited investor status. The Commission designated three certifications and designations administered by the Financial Industry Regulatory Authority, Inc. as qualifying for accredited investor status:
    • Licensed General Securities Representative (Series 7);
    • Licensed Investment Adviser Representative (Series 65); and
    • Licensed Private Securities Offerings Representative (Series 82)

  In addition, entities such as banks, partnerships, corporations, nonprofits and trusts may be accredited investors. Of the entities that would be considered accredited investors and depending on your circumstances, the following may be relevant to you:

  • Any trust, with total assets in excess of $5 million, not formed for the specific purpose of acquiring shares of an Offered Product, whose purchase is directed by a sophisticated person; or
  • Any entity in which all of the equity owners are accredited investors.

  For this purpose, a sophisticated person means a person who has sufficient knowledge and experience in financial and business matters to evaluate the merits and risks of a prospective investment.

• What are my options if I’m not an accredited investor?

  Digital Capital NFT’s publicly-quoted products can be purchased directly through your brokerage account. To purchase a publicly-quoted product, simply type the ticker symbol into your brokerage account.

• What are the benefits of adding digital currencies to my portfolio?

  Digital currencies possess many unique qualities. Because digital currencies are borderless, fungible, and accessible, they may be a great way to diversify your portfolio. Additionally, because of these unique qualities, digital currencies have historically been uncorrelated with other more traditional asset classes, such as stocks and bonds. In a market environment with geopolitical uncertainty and volatility, investors may benefit from a non-correlated asset class.

• Where can I find more information?

  For more information or follow-up questions, please contact us directly at mail@digitalсnft.com.