The patent which was awarded on June 19, details a method “for providing an exchange-traded product holding digital math-based assets” as well as the issuance of shares tied to that ETP. It adds to the body of intellectual property the Winklevosses have sought to obtain, though it’s not entirely clear when or how the concepts will be applied to real-world products.
Exchange Traded Fund is similar to a stock market where the assets [in this case, cryptocurrency tokens] can be listed and collectively bought. This ensures security for the funds as the asset is a combination of all the tokens available in ETF. Hence, even if the value of one token drops, the effect on the value of your asset would be negligible as the value of other tokens will be up.
A patent detailing Bitcoin-based Exchange Traded Fund was submitted by the brothers in mid-2013. However, SEC turned their bid down keeping high concern on the national security regulations and cited two reasons for spurning their bid. They said:
“First, the exchange must have surveillance-sharing agreements with significant markets for trading the underlying commodity or derivatives on that commodity. And second, those markets must be regulated.”
Although the patent was awarded to the Winklevoss-backed company, its inventors are the brothers themselves, along with Evan Louis Greebel, Kathleen Hill Moriarty, and Gregory Elias Xethalis.
Notably, the Winklevoss brothers won a patent last month for a system that settles transactions for ETPs tied to cryptocurrencies. Like the other patent, this week’s award names a variety of cryptocurrencies, from major ones like bitcoin and monero to more obscure ones like BBQcoin. Last week’s patent marks the seventh crypto-related patent the Winklevoss brothers have received, all in a matter of fewer than 7 months.
The Winklevoss brothers are actively working on crypto trading instruments, and according to publically available data, they have acquired seven crypto-related patents since last December.
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