How root64 holds Korean loan assets: the bankruptcy-remote Korean SPC

How does root64 hold its Korean loan assets today?

The assets are held by a Korean special-purpose company (SPC) — a separate legal entity whose only job is to hold them. They do not sit on 8percent’s balance sheet. Two asset types are held this way today (as of June 2026): real-estate-secured consumer loans and securities-account-collateralized loans.

This separation is the structural foundation everything else stands on. Before any transparency record or future token, the first question for an investor is simple: if the operating company runs into trouble, what happens to the assets? root64’s answer starts with where the assets legally sit.

What is a special-purpose company, and why use one?

A special-purpose company is an entity created to do one narrow thing — here, to hold the loan assets and nothing else. Because it has a single purpose and no other business, the assets inside it are insulated from the risks of the company that originates and services the loans.

The benefit of that insulation is specific. Once assets are genuinely isolated in such an entity, an investor “can rely primarily on the credit risk of the underlying assets and their obligors, rather than the originator’s creditworthiness” — a recognized investor protection in structured finance, as the law firm Lucosky Brookman summarizes it (Understanding Structured Finance Opinions: True Sale and Non-Consolidation, published 16 Apr 2024). That is why a single-purpose entity matters: it lets investors price the loans, not the company behind them.

In root64’s case the SPC is a standalone Korean entity, legally distinct from 8percent. That distinction is what makes the next property — bankruptcy remoteness — possible.

What does “bankruptcy remoteness” actually mean here?

It means that if 8percent were to fail, the assets in the SPC would not be affected. Because the SPC is a separate legal entity, its assets are not part of 8percent’s estate, so 8percent’s creditors cannot reach them.

This is the same test banking regulators use to decide whether assets are truly isolated. Under the Basel Committee’s securitisation framework — the global standard for bank capital rules — assets count as legally isolated only when they are “put beyond the reach of the transferor and its creditors, even in bankruptcy or receivership,” and the framework expects a legal opinion confirming that true sale (Basel securitisation framework, operational requirements for traditional securitisations, published Dec 2014, rev. Jul 2016). root64’s SPC is not bank-regulated, but that “beyond the reach of the originator’s creditors” standard is the recognized benchmark for what real isolation looks like, and it is the bar this structure is built to clear.

The whole point of that isolation is narrow: it lets an investor take on the credit risk of the underlying loans only — not the credit risk of the company that originated them. As the offshore law firm Appleby puts it, bankruptcy remoteness is the “ring-fencing of assets and removing them from the bankruptcy risks of the originator/seller,” so that investors “can simply take on the credit risks of the underlying asset” (Bankruptcy Remoteness in Structured Finance, Fiona Chan, published 18 Jun 2025).

There is a concrete operational consequence: 8percent’s own staff cannot directly access the SPC’s bank accounts. The company that originates and services the loans is deliberately kept away from the cash. This is not a promise to behave well — it is a structural constraint on what 8percent is able to do. In structured finance, that constraint is recognized practice, not improvisation: isolation is held in place by what are called separateness covenants, requiring an entity to “maintain separate books, records and accounts,” not commingle assets, and conduct business in its own name (Lucosky Brookman, published 16 Apr 2024). Operational separation — not just a separate name on a registry — is what makes the isolation real.

If 8percent doesn’t hold the money, what does it do?

8percent’s role is limited by design to originating and servicing the loans — it never holds investor funds. The other functions are carried out by separate parties, so that no single entity both controls the assets and controls the cash.

Party	Role
Korean SPC	Holds the loan assets (bankruptcy-remote, separate from 8percent)
8percent	Originates and services the loans; does not hold investor funds
Fund administrator	Handles the SPC’s administration and recording (a third-party accounting firm in the current phase)

Source: root64 business structure, entity roles, as of June 2026.

Splitting these roles is what lets root64 say that no single party — including 8percent — is the sole point of control.

How does the SPC come to hold the assets?

The SPC participates as a qualified transferee in the market for loan receivables — the right to receive principal and interest on the underlying loans. Rather than 8percent simply selling assets onto its own affiliate, the SPC takes a position in those receivables as an eligible institutional transferee, in the same market other qualified investors trade in. In plain terms: 8percent originates the loan to the borrower, and the economic right to that loan’s repayments is what the SPC comes to hold.

The precise legal nature of that right — the right to receive principal and interest (원리금수취권) — is worth its own explanation, and we cover it in a separate post.

What about the Hong Kong unit trust?

A Hong Kong vehicle is the planned tokenization tier that would sit above the SPC and serve global professional investors — but it is not yet formed, and any token issuance through it is contingent on regulatory clearance. It is not live today.

The shape of that plan follows a standard cross-border pattern rather than a novel one: assets are held in a local asset-holding vehicle, while a separate vehicle is used to connect international capital. Private-credit managers routinely “put in place parallel or subsidiary fund vehicles in different jurisdictions to meet conflicting investor and investee country requirements,” keeping the asset-holding layer distinct from the capital-raising layer (Structuring Private Credit Funds and their Asset Holding Vehicles, The Hedge Fund Journal, Issue 118, published Nov/Dec 2016). That is exactly the separation root64 is designed around: keep the assets onshore in Korea, and connect outside capital through a separate vehicle.

For now, the structure that matters is the one that already exists: a Korean SPC holding the assets, separate from the company that originates and services them. Tokenization is designed to be added on top of that foundation, not to replace it.