Monochrome’s IETH offers in-kind Ethereum transfers without triggering capital gains tax, providing tax efficiency for investors.
Monochrome’s Ethereum ETF allows investors to maintain direct ownership of Ethereum, preventing changes in legal ownership during transfers.
IETH is supported by BitGo and Gemini custody services, ensuring secure storage and administration by State Street Australia.
Monochrome Asset Management is set to launch Australia’s first spot Ethereum exchange-traded fund (ETF) on Cboe, with trading beginning on Monday. The fund, known as IETH, aims to provide direct Ethereum investment options for institutional and retail investors. This follows the successful launch of Monochrome’s Bitcoin ETF (IBTC) in August, which has attracted $15 million so far.
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Innovative Dual-Access Structure for Tax Efficiency
Monochrome’s Ethereum ETF introduces a unique feature: in-kind subscriptions and redemptions. Unlike U.S. crypto ETFs, which don't offer this, IETH’s structure allows investors to transfer Ethereum without triggering immediate capital gains tax.
This is due to the dual-access bare trust structure, which prevents changes in legal or beneficial ownership during transfers. According to Monochrome CEO Jeff Yew, this feature may offer long-term crypto holders a significant tax advantage by allowing them to avoid capital gains tax liabilities.
Ethereum Holdings and Access to Multiple Platforms
Monochrome has positioned the ETF to appeal to a broad range of investors, notably those looking for direct ownership options. Investors will be treated as if they directly own Ethereum, ensuring that no capital gains tax is triggered upon redemption or transfer as long as ownership remains unchanged.
This makes it distinct from the U.S.-listed Ether ETFs, which don’t offer such flexibility. The fund also offers access through various Australian brokerage platforms, supporting transfers from crypto platforms, decentralized wallets, and cold wallets.
Support from Key Partners and Competitive Fees
The IETH ETF will track the CME CF Ether-Dollar Reference Rate – Asia Pacific Variant, offering a competitive management fee of 0.50%, reduced to 0.21% for accredited advisers. These fees are within the range of similar U.S. products.
Custody services for the fund will be provided by BitGo and Gemini, while State Street Australia will act as the fund administrator. Monochrome hopes that the tax efficiency and its direct ownership structure will differentiate its Ethereum ETF from competitors in the global market.
