Redemption Procedures for Eligible WT Securities: Exchange for Digital Assets
WisdomTree is pleased to announce that it is able to expand its range of physical delivery options to allow investors in eligible Physically-Backed WT Securities (the “Eligible WT Securities”), issued by WisdomTree Issuer X Limited (the “Issuer”), to redeem their investment in exchange for digital assets.
The list of WT Securities eligible for physical redemption:
+ WisdomTree Physical Stellar Lumens
+ WisdomTree Physical Ethereum
+ WisdomTree Physical Polkadot
+ WisdomTree Physical Lido Staked Ether
The list of eligible WT Securities may be updated from time to time by notice issued by the Issuer. Each Eligible WT Security represents a right to receive the relevant coin entitlement in the relevant digital assets (less any applicable deductions).
Investors can redeem Eligible WT Securities directly, and request a physical redemption, with delivery of the relevant digital assets to a custodian of the Issuer or to an entity affiliated with the Issuer’s custodian (such as a local branch or subsidiary). In respect of German investors, this applies without limitation to Coinbase Germany GmbH. In addition to being a custodian of the Issuer (or an affiliated entity), the custodian must support the relevant coin at the time of delivery and hold a custodial account for the investor.
Redemption instructions for different investor types
Select the investor type that best applies to you:
Step 1: Please take time to read the FAQs, Condition 8 (Optional Redemption) of Schedule 6 (Terms and Conditions of the WT Securities) and Condition 3 (Redemption of Digital Securities) of Annex A (Digital Securities Annex) contained in the Prospectus of WisdomTree Issuer X Limited and the redemption form.
Step 2: Confirm who the Registered Holder is. Given that most individual investors hold their Eligible WT Securities through a brokerage account, very few individual investors will be the registered holder. It is best to speak directly to your broker to discuss how your securities are held. If you believe you are a registered holder, you can contact WisdomTree directly at [email protected] to confirm.
Step 3: VERY IMPORTANT: You will need to provide the relevant customer due diligence/anti-money laundering ("CDD/AML" documentation). We cannot begin the process until we have received the required CDD/AML information and performed the necessary review. For the detailed requirements, please refer to the CDD/AML documentation.
Once we complete the CDD/AML process, you will be able to submit the exchange form.
Step 4: Ask the Registered Holder in CREST to complete the redemption form. Your broker will need to provide certain details including:
- The Registered Holder’s CREST account details (Part A of the redemption form). This will allow us to match the broker’s trade in CREST when they redeem the relevant Eligible WT Security;
- The name of the registered holder; this will most likely be the name of a broker’s nominee or depositary account (Part B);
- Your name as beneficial owner (Part C)
- The number of Eligible WT Securities you wish to redeem. You will need to give this information to your broker and/or the Registered Holder (Part D);
- You will need to make clear which custodial account with the Issuer’s custodian (or an affiliated entity) you wish to have your digital assets delivered, along with relevant account details and a contact name at that custodian.
- The Broker and/or the Registered Holder will need to provide a contact number and sign (Part G).
You can send the redemption form by email or post:
Email: [email protected]
Post:
WisdomTree UK Limited
1 King William St
London EC4N 7BJ
United Kingdom
Step 1: WisdomTree is offering a service whereby Eligible WT Securities can be redeemed directly for digital assets. Your client is requesting the direct redemption of Eligible WT Securities in exchange for digital assets by delivery of the digital assets to a custodian of the Issuer or to an entity affiliated with the Issuer’s custodian (such as a local branch or subsidiary) who at the time of delivery, supports the relevant coin. Please take time to read the FAQs, Condition 8 (Optional Redemption) of Schedule 6 (Terms and Conditions of the WT Securities) and Condition 3 (Redemption of Digital Securities) of Annex A (Digital Securities Annex) contained in the Prospectus of WisdomTree Issuer X Limited and the redemption form.
Step 2: You and your client will need to confirm who the Registered Holder is. Given that most individual investors hold their Eligible WT Securities through a brokerage account, very few individual investors will be the registered holder. Most beneficial owners of exchange traded securities hold those securities in brokerage accounts, and their brokers hold the securities through additional accounts (often called “nominee accounts”). As an issuer, WisdomTree Issuer X Limited can only see the names of these nominee accounts on its register. The registered holder of the Eligible WT Securities may apply for redemption on its own behalf, or as nominee on behalf of the beneficial holder. Additionally, Eligible WT Securities held in settlement systems outside of CREST will need to track the ownership chain through to the ultimate CREST holding. As a result, your client will likely need your help in completing the redemption process.
Step 3: VERY IMPORTANT: Both you and your client will need to provide the relevant customer due diligence/anti-money laundering ("CDD/AML" documentation). We cannot begin the process until we have received the required CDD/AML information and performed the necessary review. For the detailed requirements, please refer to the CDD/AML documentation.
Once we complete the CDD/AML process, we will confirm receipt of the redemption form and commence the redemption.
Step 4: You may need to help your client complete the redemption form and Brokers will generally need to provide the following details:
- Your CREST account details. (Part A) Please note that redemption of the Eligible WT Securities will be free of payment, with the securities delivered to the Issuer and matched in CREST but no cash flowing the other way. The Issuer will provide a confirmation of the transfer of digital assets to the relevant custodian account.
- Please enter the name of the registered holder (your nominee or depositary account name) (Part B);
- Please enter the name of the beneficial owner (Part C);
- The number of Eligible WT Securities your client wishes to redeem (Part D);
- You will need to make clear which custodial account with the Issuer’s custodian (or an affiliated entity) you wish to have your digital assets delivered, along with relevant account details and a contact name at that custodian (Part E);
- Provide contact details for confirmation of redemption and redemption and sign the exchange form (Parts G). It is important the redemption form is signed by the Registered Security Holder.
You or your client can send the redemption form by email or post:
Email: [email protected]
Post:
WisdomTree UK Limited
1 King William St
London EC4N 7BJ
United Kingdom
Frequently asked questions
General
Q1. Can I redeem my Eligible WT Securities for digital assets?
Yes, Eligible WT Securities entitle the registered holder, within CREST, to payment of digital assets subject to the Conditions. The relevant amount of digital currency is referred to as the Coin Entitlement and is published on www.wisdomtree.eu.
Q2. Is there a minimum number of WT Securities that I have to redeem?
In the case of redemption directly with the Issuer, you can redeem for 1 unit of WT Security, but not less, this is subject to any minimum transfer amount which applies to the underlying digital assets.
Q3. What am I entitled to when I redeem my Eligible WT Securities?
You are entitled to receive the relevant coin entitlement in the relevant digital assets (less any applicable deductions) and subject to the delivery precision level set by the relevant custodian.
Q4. How do I receive my coins?
Digital assets in respect of Eligible WT Securities will only be delivered to a custodian of the Issuer or to an entity affiliated with the Issuer’s custodian (such as a local branch or subsidiary)who supports the relevant coin at the time of delivery and with whom you have an open custody account.
Costs
Q5. How much does redemption and exchange into digital assets cost?
For the exchange into digital assets, an upfront redemption fee of USD $1,500 is charged to cover the administrative cost of exchanging the WT Securities into digital assets as well as further transaction fee of 5% of the Coin Entitlement which will be withheld from your redemption proceeds.
Q6. What risks does the exchange for digital assets involve?
Investors should note that the Digital Currencies attributable to the Eligible WT Securities are transferred out of the Custodian's secured custody accounts into the designated wallet of the receiving custodian where it is held for the redeeming registered holder. This means that the digital assets are no longer under the protection of the Security Deed and title and risk in the Digital Currencies will pass to the redeeming investor.
The Issuer has a multi custodial platform. This means that when an investor chooses to redeem Eligible WT Securities directly with the Issuer, the redemption process may involve more than one Custodian. Transfers between Custodians may cause additional transfer costs and security risks. Such transfers between the Custodians may result in a loss of assets and cause a total or partial loss of the WT Securityholder investment.
Neither the Trustee nor the Issuer shall be responsible or liable for any failure by the Custodian to effect a delivery of the relevant Digital Currencies in accordance with the instructions of the Issuer.
For further information on risks more generally please see the section of the Prospectus of WisdomTree Issuer X Limited entitled "Risk Factors" and the terms and conditions in relation to digital asset delivery contained in the Prospectus of WisdomTree Issuer X Limited.
How to redeem
Q7. What does it mean that only the “registered holder” has a right to elect for exchange for digital assets?
For most securities that are traded on exchange, there is a difference between the holder of record who is registered on the records of an issuer and the beneficial owner who ultimately owns the security. Most beneficial owners of exchange traded securities hold those securities in brokerage accounts, and their brokers hold the securities through additional accounts (often called “nominee accounts”). As an issuer, WisdomTree Issuer X Limited can only see the names of these nominee accounts on its register. The registered holder of the Eligible WT Securities may apply for exchange for digital assets on its own behalf, or as nominee on behalf of the beneficial holder.
Q8. How do I know if I am the registered holder?
Given that most individual investors hold their Eligible WT Securities through a brokerage account, very few individual investors will be the registered holder.
Q9. So if I am not the registered holder, how do I apply for exchange for digital assets?
While some holders may hold Eligible WT Securities directly, it is likely that most investors will hold it through a broker or other financial intermediary and even in different settlement systems. In those cases, the WT Security Holder listed on the Register is likely to be the broker’s or financial intermediary’s nominee account. Investors should contact their broker or financial intermediary to ask them to assist in the redemption and exchange process (described in detail below). WisdomTree is happy to speak to the broker to explain the process. For assistance, please direct them to: [email protected].
Q10. What happens if my broker cannot help with the redemption process?
If your broker is unable to help with the exchange process, please contact us at [email protected]
Q11. Do I need to fill out a form?
The registered Security Holder must provide a redemption form specifying the following:
- The name of the Security Holder listed on the Register and appropriate contact details
- The name of the beneficial owner of the Eligible WT Securities
- Whether Eligible WT Securities are being redeemed and the number of securities to be redeemed and exchanged for digital assets
- The name of the custodian of the Issuer or to an entity affiliated with the Issuer’s custodian (such as a local branch or subsidiary)with whom you hold a custodian account and a contact name at said custodian.
The completed form should be sent to the following email address: [email protected].
Alternatively, it can be posted to:
WisdomTree UK Limited
1 King William St
London EC4N 7BJ
United Kingdom
Q12. Is there any Client Due Diligence/Anti Money Laundering ("CDD/AML") documentation required?
Yes, the beneficial owner must provide appropriate CDD/AML documentation. We cannot begin the redemption and exchange process until we have received the required CDD/AML information and performed the necessary review.
Once we complete the CDD/AML process, we will confirm receipt of the exchange form and commence the redemption and exchange.
For more detail, investors should refer to the CDD/AML procedures.
Q13. What is the proposed timeline for exchange?
Before the actual redemption and exchange process may begin, we must receive physical CDD/AML documents, perform the necessary CDD/AML checks, finalise any further security measures and operational actions (such as unstaking, if applicable). Additional time may be required for the investor to open a custodial account with a custodian of the Issuer or to an entity affiliated with the Issuer’s custodian (such as a local branch or subsidiary) who supports the relevant coin at the time of delivery. Those checks and account opening processes can take a few days. Once we have completed those checks, we will confirm receipt of a valid redemption form; from that point, the redemption of Eligible WT Securities against the delivery of digital assets can take a number of days. The Issuer may undertake further security measures prior to the transfer of the digital assets which may delay the delivery of the digital asset to the investor’s custody account. WisdomTree is not responsible for delays, failures, or technical issues at custodians which may delay delivery of the digital assets to investors.