Jan. 17, 2024
While I realize that this effort has been underway since 2021, it is fraught with self-dealing, conflict of interest, and lack of clarity how land rights can be separated from ownership. The SEC has taken years, YEARS, to review and approve a spot Bitcoin ETF, but wants to take a few months to cram through an entirely new investment vehicle? That is entirely irresponsible. Allow me to articulate some of the more egregious reasons that NACS should not be approved: 1) We already have real estate investment trusts and publicly traded farmland trusts that are available to investors. If an entity wants to control the rights of use on land, it should acquire the land at fair market value and manage it, within the investment trust, according to its charter. 2) Public Lands in the United States, whether managed by the Bureau of Land Management or the Department of the Interior or Department of Agriculture are mandated by their enabling legislation to be managed for multiple use. It appears that these investment vehicles are being designed to sell land rights of public lands to private entities to remove multiple use or even public access. This is contrary to the rights of Americans to access and use of public lands and to the enabling legislation of the underlying duties of the agencies. You cannot create a legal entity to violate these duties. 3) The NYSE makes money off of listings. The NYSE is also a minority shareholder of IEG, which it has specifically identified as the enabling partner to “seek to identify and develop NACs for listing on the Exchange, in addition to marketing the listing and trading of NACs on the Exchange and providing training with respect to the NAC structure.” The NYSE is the fox in the hen house, creating an entity that it will profit directly from the creation of. This looks very Sam Bankman Fried fraudulent. That the SEC has let this application get to the public comment point of its review, without demanding separation of these entities is really inappropriate and bad policy. To summarize, the NYSE does not need a new investment entity. The market is served by entities with direct land ownership. The land and rights should not be split apart. The NYSE and its minority-owned partner IEG will be directly involved in the creation of NACs to their own financial benefit, which is a conflict of interest. Irrespective of the current trends in the Biden Administration regarding ESG investing, many professional money managers have found their performance in these investments lacking and are starting to abandon these platforms. If you have to take years and years of litigation, S-1 re-writes and all sorts of hoop jumping for the Bitcoin Spot ETFs, you do your agency a disservice without greater scrutiny of this entity application and its right up front conflicts of interest, potential likelihood of violation of federal law if these entities acquire rights to federal land meant to be actively managed, and the lack of need for such a product, given the already approved existence of land and real estate investment trusts.