RIADeFiPublished by Ketju Research
Not approved · Tokenized real-world assets

Ketju memo: USDM1 (Republic of the Marshall Islands)

Not approvedPublished by Ketju Research

This memo sets out what the holder owns, who controls it, how holders could lose money, and whether a position can be sold. The advisor decides any client action and amount. Not investment, legal, tax, or compliance advice.

Summary

Ketju does not approve USDM1: the Republic of the Marshall Islands sells it only under Regulation S, so a US client cannot buy it, and the Republic has not published the indenture or any report on the collateral. USDM1 is a bond of the Republic. Its law firm, Cleary Gottlieb, describes a program of continuous Reg S offerings of "tokenized perpetual adjustable-rate secured bonds," up to an initial $100 million, first issued on 23 September 2025. The bonds exist only as book entries taken from token holdings, so the token is the bond. A holder may redeem each unit at any time for one dollar. The Republic invests the sale proceeds in short US Treasuries and pledges them to a US trust company as collateral agent. It keeps part of their yield, and the rest accrues to holders as new units. A holder therefore has two claims: one on the Republic, under a New York law indenture with a waiver of sovereign immunity, and a perfected security interest in the Treasuries. We cannot check the coupon formula, the Republic’s share of the yield, the redemption mechanics or the collateral balance, because the Republic has not published the indenture, the offering memorandum or any collateral report. On Ethereum one private key can upgrade the contract, freeze any address and grant itself the power to burn from any holder. Ketju will review USDM1 again if the Republic offers it to US investors and publishes the indenture and collateral reports.

Review triggers

  • The Republic offers USDM1 to US investors under a registration or a named exemption
  • The Republic publishes the indenture or offering memorandum, showing the rate formula, the Republic’s share of the yield and the redemption terms
  • A collateral report or attestation shows pledged Treasuries at or above the supply on every chain
  • The Ethereum owner key moves to a multisig or timelock, or the Republic publishes its contract addresses
  • The Republic or Surus refuses or delays a par redemption

Facts

Verdict
Not approved
Type
Tokenized real-world assets
Chains examined
Ethereum, Stellar, Solana
Instruments
USDM1
Reviewed
Last confirmed

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