ASIC Gives Green Light to BTC and ETH Spot ETFs, First Expected Next Week

November 02, 2021, 10:15 AM AEST - 1 month ago

The Australian Securities and Investments Commission (ASIC) has finally given the green light to Bitcoin and Ethereum exchange-traded funds (ETF), allowing investment funds to launch their crypto ETFs by next week.

After a long period of industry consultation, ASIC released a set of guidelines for institutions keen to launch crypto exchange-traded products (ETPs). The paper also published guidelines that allow fund managers to launch ETFs under certain regulatory requirements.

Australian fund manager BetaShares will be the first to list an ETF on the Australian Securities Exchange on November 4. The fund will have the ticker “CRYP” and will allow investors to access a mixed set of crypto ventures, most of them focused on companies whose revenue is derived mainly from the cryptocurrency market.

We know there are millions of people around the world [invested in crypto], and close to 2 million Australians that have actually invested in cryptocurrency directly.

Alex Vynokur , CEO and co-founder, BetaShares

Among the regulatory requirements are that fund managers must appoint a custodian with expertise on cryptocurrencies and blockchain technology, and hold at least A$10 million in net tangible assets. They are also responsible and must compensate for any custodial assets lost.

As Crypto News Australia reported in August, one of the reasons crypto ETFs in Australia have been delayed so long is that ASIC was trying to solve how arrangements with custodians would work.

ASIC Recognises Institutional Interest in Australia But Leaves Altcoins Out

ASIC has signalled its intention to “recognise the interest in, and demand for, ETPs and other investment products that hold crypto-assets in Australia”. The new fund is expected to give the Australian crypto space a big boost as institutional adoption expands rapidly across the globe. The first US Bitcoin ETF debuted in mid-October, breaking record trading volumes of US$1 billion in just 24 hours, turning it into the country’s second-largest traded ETF fund.

However, altcoins were left out, with only Bitcoin and Ethereum ETFs permitted. These funds will allow investors to purchase contracts that track the price of both currencies without having direct exposure to either asset.

Talking about the benefits and risks of cryptocurrencies, ASIC commissioner Cathie Armour said:

Crypto-assets have unique characteristics and risks that must be considered by product issuers and market operators in meeting their existing regulatory obligations. The good practices we published provide practical examples of how these obligations may be met, in a way that maintains investor protections and Australia’s fair, orderly and transparent markets.

Cathie Armour, commissioner, ASIC

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