The yield comes directly from tokenized USA T-Bills, in other terms, from US debt. Your funds are invested in a combination of US Dollars held in US Demand Deposit Accounts (i.e. Bank Accounts) and short-term US Treasuries.
The US Treasuries will be in a “cash custody” accounts at Morgan Stanley and StoneX. The US Treasuries will not be rehypothecated.
Funds are hold at third-party qualified custodians, receive daily accounting from NAV Consulting, and will receive annual audits.
Colateral Agent is Ankura Trust Company. As Collateral Agent, Ankura will be prepared to seize the assets that secure the tokenized T-Bills and repay holders if the tokenization company was to cease operations or breach certain covenants of the debt.
These agreements give Ankura the legal right and obligation in its role as Collateral Agent, to take control of assets and repay Tokenholders upon the occurrence of certain events of default and upon acceleration of the loans.
Events that trigger such an action include a failure to repay redemptions, a failure to keep the tokenized T-Bills adequately capitalized, or the tokenization company filing for bankruptcy. Investors in the tokenized T-Bills have what’s known as a “first security interest” in the tokenization company underlying bank deposits and Treasuries, with Ankura Trust acting as the collateral agent the tokenization company is a bankruptcy-remote.