Citi Pitches a Cleanup for Murky SPV Market

2026-06-25 · Source: The Information · Field: Finance & Economics — Capital Markets & Investment Management, FinTech & Digital Financial Services · Depth: Intermediate, short

Summary

Citigroup has launched a new service designed to address the complex and often unclear ownership structures prevalent in the private tech firm market, particularly those involving special purpose vehicles (SPVs). The bank's initiative allows investors to trade private company shares on a blockchain, initially targeting foreign investors with a future expansion to the U.S. This system uses depository receipts, each with a serial number, to ensure clear ownership tracking and transfer on both blockchain and existing market infrastructures. Kaleido, a blockchain technology provider, is the first firm to adopt this service. Citi aims to provide "legal, verifiable certainty" of share ownership, directly on the company's cap table, contrasting with the multi-layered SPV approach. A key hurdle is securing explicit permission from private companies, though Citi highlights benefits like cap table cleanup and the ability for founders to use receipts as collateral.

Key takeaway

For private company executives considering secondary share sales, Citi's new blockchain-based depository receipts offer a path to expand investor access while maintaining cap table control. You should evaluate this service as an alternative to complex SPV structures, which can obscure ownership and lead to unauthorized trading risks. Opting in could streamline your cap table and provide founders with collateralizable assets, but requires explicit company approval.

Key insights

Citi's new blockchain-based depository receipts aim to bring transparency and verifiable ownership to private company share trading, circumventing opaque SPVs.

Principles

• Private companies prioritize cap table control.
• Blockchain enables verifiable asset ownership.
• Multi-layered SPVs obscure share ownership.

Method

Citi issues serial-numbered depository receipts for private company shares, tracked on blockchain and existing market infrastructures. This requires explicit company permission to ensure direct cap table representation.

In practice

• Use depository receipts as collateral.
• Streamline private company cap tables.
• Expand investor access to private shares.

Topics

• Special Purpose Vehicles
• Blockchain Technology
• Depository Receipts
• Private Company Shares
• Cap Table Management
• Secondary Markets

Best for: Investor, Legal Professional, Entrepreneur

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Editorial summary, takeaway, and curation by AIssential. Original article published by The Information.