Posted on August 2nd, 2017 by Fitch
STOCKHOLM, August 2, 2017 — On August 1st at 12:20 UTC, at blockchain block: 478558 , the bitcoin blockchain ‘forked’ resulting in the creation of a new coin, which is referred to as Bitcoin Cash (BCH).
As indicated within the release issued on July 29th at 18:30 CET by XBT Provider AB (Publ) (the “Issuer”) prior to the fork, the Issuer’s Certificates continue to track the coin which is identified by the bitcoin community as being ‘bitcoin’ (also known as the ‘Segwit2x chain’) and not BCH (BCH).
As was indicated in such earlier release, the Issuer is currently evaluating how best to maximize the value which may be created from the bitcoin fork that resulted in BCH for those who held its Certificates at the opening of trading on August 1st.
(The Issuer wishes to clarify that Certificates purchased after the beginning of trading hours on August 1st, are not eligible to participate in any value-creation generated from the bitcoin fork which resulted in BCH. This limitation on the ability to participate in any such aforementioned value-creation is consistent with the mechanics and operation of the underlying bitcoin protocol in the context of a fork: a person must hold the relevant private key to the associated bitcoin at the time of a fork in order to be entitled to any value-creation generated by such fork).
In accordance with the proposals outlined in its earlier release, the Issuer has initiated a 3 month “observation period” during which the Issuer and Guarantor will assess the best course of action to take in order to maximize value for investors in the Issuer’s Certificates. Considerations which are material in this context include the fact that the BCH markets are currently illiquid, with certain exchanges and custodians not distributing holdings of BCH to their users. During the 3 month “observation period” the Issuer will additionally be taking into account the following considerations (which are not exhaustive):
1. the liquidity and order books of BCH markets;
2. the hash rates and mining-difficulty adjustments on both resulting coins’ (ie: bitcoin and BCH) chains;
3. the degree of economic activity taking place on both coins’ chains;
4. the relative momentum of each network; and
5. options to distribute any value creation which may be facilitated by Euroclear, broker-dealers and exchanges.
The Issuer reiterates that it will do all that can practicably be done in the circumstances to maximize value for investors in its Certificates. Whilst there is no legal capacity for the Issuer to add the fair value of BCH to those who held its Certificates at the start of trading on August 1st, the Issuer intends to pass any such value to those Certificate holders by means of a suitable and appropriate mechanism, to be determined in the discretion of the Issuer, at (or shortly after) the end of the 3 month “observation period”.