Link Network CEO describes tokenized money‑market shares, urges careful state partnerships

JD, the CEO of Link Network, told the Commission to Study that he and his team began work in 2018 to create a pooled investment vehicle that would be registered under the Investment Company Act of 1940 and whose shares could be delivered on a blockchain.

He said the resulting Arca US Treasury Fund issued shares known as RCOIN, and that the fund went effective on 07/06/2020. "We set out to create the first of a kind — a 40 Act fund delivered on chain," JD said, describing two years of iterative discussions with the U.S. Securities and Exchange Commission and its FinHub office before the fund became effective.

Why it matters: JD framed tokenized fund shares as a way to reduce settlement times, increase transparency and enable new institutional uses — for example, immediate collateral movement and treasury management — while operating within existing securities regulation. That positioning matters to state policymakers because it separates the product from unregistered stablecoin issuances and points to options that could be administered by regulated entities.

Details: JD said Link (also referred to in the presentation as LINC for the settlement layer) combines three parts: an SEC‑registered advisor and a fund wrapper under the Investment Company Act of 1940; a carrying/special‑purpose broker‑dealer for onboarding, AML/KYC and custody; and a technology partner (Tacit) that runs the permissioned settlement infrastructure. He described a feature the firm calls "yield in transit," in which interest on the underlying assets accrues to users on a sub‑daily basis and is distributed according to how long positions are held.

On technology and custody, JD said the public issuance layer uses Avalanche's C‑chain for on‑chain shares while settlement and counterparty transactions run on a permissioned L1 that the technology provider operates on Link's behalf. On regulatory posture, he said Link is structured as a Delaware LLC and that voluntarily registering products and operating within the 1940 Act framework has positioned the firm to continue offering securities‑based products even as federal rulemaking on stablecoins evolves.

Exchanges with commissioners: Commissioners and industry representatives asked whether a state should "go first" with legislative changes to accommodate these products. JD cautioned that states should not act alone without experienced partners and recommended leveraging consortia and existing regulated entities to reduce implementation risk. In response to questions about federal rule changes (one panelist referenced a "Clarity Act" development), JD said that the product's registered status makes it less vulnerable to rules that would restrict primary stablecoin issuers from offering yield.

What commissioners asked next: Panelists pressed on validator governance, privacy of institutional flows and how AML/KYC is enforced. JD said validators for the permissioned layer are operated by the technology provider and that the public on‑chain issuance is intentionally limited to issuance and proof of reserves while private settlement preserves proprietary trading and client privacy.

Next steps: JD offered to follow up with the commission and to provide documentation and contacts; commissioners indicated they would continue to weigh presentations and schedule additional witnesses.

Ending: The commission opened the meeting to further questions and then moved to the next presentation on bank‑operated token networks.