The tokens will represent equity in the company, while the coins will be used as a transaction medium in its cannabis payments network.

Ceres Coin LLC, based in Chicago, filed with the SEC on June 30, 2020, requesting permission to issue digital securities comprising tokens of $30 million and Ceres coins worth $20 million. The tokens will capitalize the company for its proposed business to build an end to end transaction network for cannabis on the blockchain. The coins will serve as a mode of transactions in the cannabis payments network. (CoinDesk)

Ceres ecosystem

Ceres is seeking to develop a peer-to-peer methodology for conducting secure, auditable, financial transactions in the legal medical and adult-use cannabis industry.

Veterans Greg Anderson and Charlie Uchill own Ceres. It will offer tokens allowing holders to participate in the revenue streams of CERES two lines of business.

These are its collateralized real estate lending business and the cannabis blockchain network. Token holders, as a group, will receive 80% of the firm’s net revenues from its real estate loan business and 20% of net revenues from the blockchain-enabled payments system.

These tokens will be available to retail investors upon SEC approval for qualification via Reg A+.

Ceres: The cannabis market and cash-filled duffle bags

Cannabis-based businesses have a problem finding banks to serve them. That’s because cannabis has still not been cleared at the federal level though it is legal for medical and recreational purposes in many states.

A blockchain network with a cannabis-specific cryptocurrency, such as the Ceres Coin, would facilitate easier transactability as well as accounting, even though it is outside the banking system.

It may be noted that even legal cannabis businesses have to conduct their transactions in cash.

“The goal of CERES, our proprietary payment and investment ecosystem, is to bring the industry out of cash-filled duffle bags and into a secure digital transaction system,” said Charlie Uchill in 2018, when the company announced the launch of Ceres Coin.

Getting the SEC approval seems to be an uphill task, but Ceres appears to be undeterred.

“We have been working with the SEC for 18 months,” Urchill told Coin Desk. “I tell investors that we lost every battle with the SEC to win the war to have SEC approval.”

However, there may be hope yet.

SEC allows Arca U.S. Treasury Fund to issue digital securities

The Arca U.S. Treasury Fund became the first-ever financial product regulated under the Investment Company Act of 1940 allowed to offer digital securities.

Digital asset investment firm Arca launched the closed-end fund on July 6.

Though the fund will invest 80% of its portfolio assets in U.S. Treasury securities, shareholders investing in the fund will be issued digital securities called “ArCoin.”

ArCoin will entitle the holders to the quarterly interest accrued on the fund’s portfolio assets of interest-bearing, short-duration U.S. Treasury securities.

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