BTCS Calls On Shareholders to Protect their Investment by Not Lending their Shares
February 06 2023 - 8:36AM
BTCS Inc. (Nasdaq: BTCS) (“BTCS” or the “Company”), a blockchain
technology-focused company, is calling on its shareholders to take
action to protect their investment.
The Company’s public float is comprised of over
35,000 shareholders holding approximately 8.7 million shares, of
which it estimates over 80% are held at 4 brokerage firms. In
addition to this concentration of shares, the Company believes many
of these shares may be held in margin accounts, potentially making
it very easy for short sellers to borrow those shares.
“I want to alert our shareholders that they can
take simple actions to protect their investment,” said Charles
Allen, CEO of BTCS. “Over the past few decades, the financial
industry has undergone a profound transformation with the shift
towards zero-commission trading. This evolution has led to an
increased reliance on alternative sources of revenue for brokerage
firms, such as paying for order flow and lending out shares to
facilitate short selling. This dynamic is both veiled and
detrimental to Main Street, creating an unfair playing field for
retail investors who make up the majority of BTCS's shareholders.
At BTCS, we believe in fair and transparent markets and the
innovative technology behind blockchains which can help restore
fairness and transparency to our financial systems.”
For long-term shareholders that believe in the
Company’s future, the Company implores you to consider taking one
of the following actions:
1) hold your BTCS
shares in a cash account at your brokerage firm instead of a margin
account, or
2) opt-out of any
securities lending programs which should stop your broker from
lending your shares, or
3) move your shares
to Equity Stock Transfer, the Company’s transfer agent. The Company
will pay all transfer agent costs associated with moving your
shares both to and from your brokerage account provided they are
DRS transfers. Please note that once your shares are moved to our
transfer agent, your ability to timely transfer your shares back to
a brokerage firm and sell may be a longer process.
“Any long term investor holding shares in a
company implies an inherent belief in that company’s success.
Therefore, it’s counterintuitive to support actions that make it
easier for institutions to bet against you and your investment,”
continued Allen. “The SEC in its June 10, 2021 Investor Bulletin
specficaly warned investors about securities lending.”
Relevant excerpt from SEC bulletin below:
Securities Lending
“Some margin accounts allow the brokerage firm
to lend out securities in the account to a third-party, at any time
without notice or compensation to the account holder, if the
investor has any outstanding margin loan in the account. While
shares are lent out, you may lose the voting
rights associated with those shares. You will still
receive a payment for any dividends related to lent out shares.
However, since you are not the official holder of the shares,
the payment you receive may be taxed differently.
Ask your brokerage firm if its margin accounts allow for securities
lending, and if so, to explain how it works and may impact the
securities in the account.”
Lastly, this strategy and philosophy should
extend beyond just your BTCS holdings and may help protect your
other investments.
Investor Notice
The Company encourages you to speak with your
financial advisor about any transactions and strategies such as
using cash accounts to hold your securities instead of margin
accounts and the lack of liquidity resulting from holding your
shares at our transfer agent to ensure they are appropriate for
your individual circumstances. While the Company will cover the
cost of any transfer agent fees for DRS transfers it will not cover
the cost of any fees charged by brokerage firms or DWAC
transfers.
About BTCS:
BTCS Inc. is a Nasdaq listed company operating
in the blockchain technology space since 2014 and is one of the
first U.S. publicly traded companies with a primary focus on
blockchain infrastructure and staking. BTCS secures and operates
validator nodes on disruptive next-generation blockchain networks
that power Web 3, earning native token rewards by staking our
proof-of-stake digital assets.
“StakeSeeker” is BTCS’ newly introduced
proprietary Cryptocurrency Dashboard and Staking-as-a-Service
platform, developed to empower users to better understand and grow
their crypto holdings with innovative portfolio analytics and a
non-custodial process to earn staking rewards on digital asset
holdings. Users can easily link and monitor their cryptocurrency
portfolios across exchanges, wallets, validator nodes, and other
sources; and have access to a suite of data analytic tools such as
performance and reward tracking.
StakeSeeker’s Staking Hub allows users to earn
rewards by participating in network consensus mechanisms by staking
and delegating their cryptocurrencies to company-operated validator
nodes for a growing number of supported blockchains.
As a non-custodial validator operator, BTCS will
receive a percentage of token holders staking rewards generated as
a validator node fee, creating the potential opportunity for a
highly scalable business with limited additional costs. For more
information visit: www.btcs.com.
Investor Relations:ir@btcs.com
Public Relations:Mercy
Chikoworem.chikowore@btcs.com
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