• Item 5 – Fees and Compensation
Fund Governing Documents set forth the fees and expense structures associated with each Fund,
and investors should consult the Governing Documents of the respective Fund for further
information on fees and expenses and ask any follow up questions before investing.
Overall, Off the Chain receives compensation from management fees, carried interest allocations
and potential expense reimbursements. Fees can be subject to negotiation, resulting in investors
and/or strategic partners having different fee terms, and employees and general partner members
generally do not pay management or incentive allocations, all at the discretion of Off the Chain,
generally with terms established by Fund closing and subscription. (Please see Item 6 below for
information on performance based fees.)
Management Fees: Management fees are generally paid monthly, in arrears, one-twelfth of the
management fee percentage of the net asset value of the capital account, charged against the capital
account’s net asset value as of the last business day of the calendar month. The Funds’ net asset
values are calculated by Off the Chain based on values that are reviewed and approved by Off the
Chain’s Valuation Committee. Off the Chain provides the Funds’ third-party administrator with the
net asset value. The Funds’ administrator uses the investment values and the monthly expenses to
create a monthly performance report to distribute across investors based on their percentage
ownership. Currently, the Funds are not employing the use of margin in their core strategy,
although Off the Chain has authority to do so per the Funds documentation and specific
investments can include a leveraged amount.
Other Expenses: In addition to the above, the Funds and therefore investors are charged, or must
reimburse Off the Chain for, additional expenses, which Off the Chain deems necessary or
advisable.
Off the Chain is responsible for and shall pay, or cause to be paid, all of its own ordinary
administrative and overhead expenses, including, without limitation, all costs and expenses related
to rent, furniture, fixtures, equipment, office supplies, clerical expenses, and all salaries, bonuses
and benefits paid to, or on behalf of, Off the Chain personnel.
Although currently, the Funds are charged third party direct expenses, such as administrator, legal,
compliance, audit, and tax, as well as some research and accounting software, the Funds per the
respective Governing Documents are responsible for additional expenses and in the future could
be additionally charged. For example, the Funds are also responsible for Off the Chain’s due
diligence costs and expenses incurred in connection with investigating investment opportunities
and ongoing due diligence in certain circumstances for the Fund, including related travel, lodging,
and entertainment. While in current practice not all such expenses have occurred or exist,
additional charges can include for example and without limitation fees and expenses of and relating
to investment banking and private placements, brokerage, commissions, dealer mark-ups, mark-
downs and spreads, clearing and settlements, custody, taxes, legal, audits, accounting,
administrators, other professional fees, insurance, research and market data including associated
hardware and connectivity hardware including Bloomberg terminals and telephone and optic
lines, borrowing, short sales, interest amounts, loan commitments, margin, other debt, obligations
under repurchase agreements, compliance and consulting, personal security services, investor
communication services and products, custom software development, related hardware, third
party administrators, systems to facilitate accounting, record-keeping, data management, and data
recovery, software licensing and implementation, investor communications, mailings, printings,
filings, registrations, indemnification obligations, and extraordinary expenses.
In addition to paying the fees and expenses discussed above, the Funds are responsible for fees and
expenses charged by third-parties in connection with the Funds’ investment in certain private trust
vehicles managed by such third-parties. These fees and expenses could include brokerage and
other transaction costs, custodial fees, and any other fees and taxes, related to the purchase and
sale of digital assets managed by these third parties.
In general, each investor will bear its proportionate share of the Funds’ expenses on a pro rata
basis with respect to the size of such investor’s capital account(s) or with respect to the relative
net asset value of the shares held by such investor, as applicable.
The Funds are subject to, and responsible for, costs and other expenses, regardless of whether it
realizes any profits. As a result, the Funds will have to earn substantial profits to avoid depletion
of their assets due to such costs and expenses.
Please see Item 12 – Brokerage Practices of this Brochure for more information on brokerage.
Off the Chain Consulting fees are pursuant to a written agreement with the consulting client and
generally begin at $250,000.00. Upon expiration of the first twenty-five hours of consulting
services, consulting clients are charged at a rate of $5,000.00 per hour.
Neither Off the Chain nor employees accept compensation, including sales charges or service fees,
from any person for the sale of securities or other investment products.