Legal
Disclosures
The following describes investor eligibility, how Wesvel verifies it, and the risks of investing in privately offered digital asset funds. It is a summary and is qualified in its entirety by each fund’s definitive offering documents.
1. Accredited investor definition
An “accredited investor” is defined in Rule 501(a) of Regulation D under the Securities Act of 1933. In plain language, you may qualify if any of the following applies:
- Individual income above $200,000 in each of the two most recent years, with a reasonable expectation of the same this year.
- Joint income with a spouse or spousal equivalent above $300,000 on the same basis.
- Individual or joint net worth above $1,000,000, excluding the value of your primary residence.
- You hold a Series 7, Series 65, or Series 82 license in good standing.
- An entity with total assets above $5,000,000 that was not formed for the specific purpose of making this investment.
- An entity in which all of the equity owners are themselves accredited investors.
- You are a “knowledgeable employee” of the fund or its adviser, as that term is defined under the Investment Company Act.
This summary is not a substitute for the rule itself. Certain investments are additionally limited to “qualified purchasers,” a higher standard.
2. US person definition
“US person” is defined in Rule 902(k) of Regulation S. It includes, among others: any natural person resident in the United States; any partnership or corporation organized under US law; any estate of which a US person is executor or administrator; any trust of which a US person is trustee; any agency or branch of a foreign entity located in the United States; and any non-discretionary account held by a dealer or other fiduciary for the benefit of a US person.
Certain instruments referenced on this website are available only to persons who are not US persons within this definition. If you are uncertain whether you fall within it, you should assume that you do and seek advice.
3. Verification process
Because Wesvel funds are offered under Rule 506(c), Wesvel is required to take reasonable steps to verify that each investor is an accredited investor. Self-certification alone is not sufficient.
Verification is performed through one or more of the following:
- Review of tax filings, W-2s, or equivalent income documentation for the two most recent years.
- Review of bank, brokerage, and other asset statements dated within the prior three months, together with a credit report, to establish net worth.
- Written confirmation from a licensed attorney, certified public accountant, registered investment adviser, or registered broker-dealer that they have taken reasonable steps to verify your status within the prior three months.
- Verification of professional license status where you qualify on that basis.
For non-US investors, Wesvel instead verifies status under Regulation S and applies its anti-money-laundering, know-your- customer, and sanctions screening procedures. All investors are subject to those procedures regardless of jurisdiction.
Verification is time-limited and must be refreshed periodically to maintain access to fund documents and to participate in subsequent subscriptions.
4. Full risk disclosures
An investment in a Wesvel fund involves substantial risk, including the risk of total loss of capital. The following is not exhaustive.
Digital asset volatility. Digital asset prices are volatile and can decline rapidly and without warning. Losses may be sudden, substantial, and permanent.
Regulatory uncertainty. The legal and regulatory treatment of digital assets, digital asset intermediaries, and tokenized instruments is unsettled and evolving in every major jurisdiction. Changes may restrict, reprice, or eliminate the legality or economics of a strategy.
Custody and key management. Digital assets are controlled by cryptographic keys. Compromise, loss, or mismanagement of key material, or failure of a custodian's controls, can result in the irreversible loss of assets.
Counterparty and exchange insolvency. Assets held at, or positions held with, a trading venue or counterparty are exposed to that party's failure, including withdrawal suspension, socialized loss, insurance fund shortfall, and insolvency. Loss can occur independently of position performance.
Smart contract and protocol risk. Decentralized protocols depend on smart contracts that may contain vulnerabilities. Audits reduce but do not eliminate this risk. Protocols may be exploited, may be changed by governance, or may fail.
Tokenized instrument issuer credit risk. A tokenized instrument is a claim on an issuer. If that issuer fails, holders are creditors and not owners of the underlying asset. Bankruptcy-remoteness varies by structure and should not be assumed.
Tokenized instrument redemption and transfer restriction risk. Redemption of a tokenized instrument is at the discretion of its issuer under the issuer's own terms, and may be gated, delayed, or suspended. Many tokenized securities are permissioned and enforce eligibility at the contract level; a whitelisting failure can render a position temporarily untransferable.
Liquidity, lock-up, and gate risk. Fund interests are illiquid. Redemption is available only at stated intervals, on notice, and may be suspended or gated. Underlying positions may be illiquid or subject to multi-year lock-up and vesting schedules.
Valuation risk for illiquid positions. Illiquid and locked positions are valued under a written policy rather than by reference to an active market. Valuations are estimates and may differ materially from amounts ultimately realized.
Leverage and liquidation risk. Leveraged and margined positions can be liquidated during sharp adverse moves, including short squeezes, and including where the overall position is economically hedged.
Funding, basis, and de-peg risk. Funding rates can turn negative and become a cost. Basis can widen before it converges. Stablecoins and liquid staking derivatives can de-peg. Oracles can be manipulated.
Tax uncertainty. The tax treatment of digital assets, tokenized instruments, and the funds themselves is uncertain and subject to change, potentially with retroactive effect. Investors should consult their own advisers.
Concentration. A strategy may at times hold significant exposure to a single asset, protocol, chain, venue, or issuer.
Operational and key person risk. The funds depend on the continued involvement of a small number of individuals and on the correct functioning of proprietary systems, third-party infrastructure, and service providers.
Conflicts of interest. The adviser and its personnel may have interests that conflict with those of the funds, including the allocation of investment opportunities across vehicles and the valuation of illiquid positions.
Cybersecurity. The adviser, its service providers, and the venues and protocols it interacts with are exposed to cyber attack, which may result in loss of assets, loss of data, or interruption of operations.
5. Eligibility restrictions by vehicle
Wesvel operates two vehicles: a Delaware limited partnership for US investors, and a Cayman Islands exempted company for eligible non-US investors. They pursue the same strategy but they do not hold identical instruments.
The reason is regulatory rather than strategic. Certain tokenized instruments, tokenized equity exposure in particular, are issued by regulated non-US entities and are not available to US persons. Those positions are therefore held exclusively within the non-US vehicle. Certain other instruments are restricted to qualified purchasers and are held in both vehicles only where each investor meets that standard.
Wesvel enforces this at the data layer as well as in its subscription process: an investor in the US vehicle is not served holdings data for instruments that are ineligible for that vehicle.
Specific eligibility for each instrument type is described in the relevant fund’s offering documents, which control in the event of any inconsistency with this page.
Form ADV
Wesvel Management LLC operates as an Exempt Reporting Adviser under Section 203(m) of the Investment Advisers Act of 1940. It is not registered as an investment adviser with the Securities and Exchange Commission or any state regulatory authority.
An Exempt Reporting Adviser files an abbreviated Form ADV Part 1A rather than a complete Form ADV, and is not required to prepare or deliver a Part 2A brochure. Wesvel does not publish one. The Part 1A filing is available through the SEC’s Investment Adviser Public Disclosure website.