Australian ASIC Puts Pressure on Three Funds BTC, ETH and FIL

Due to incompatible target market decisions, Australia’s primary financial markets regulator has issued temporary stop orders on three crypto-related funds that were to be made available to retail investors (TMDs).

Australian Securities and Investments Commission (ASIC) announced in a press release It has issued pause orders against asset manager Holon’s crypto funds, each of which aims to invest in Bitcoin, Ethereum and FileCoin.

Here, target market identification is a document that states who is the right product based on expected needs, goals and financial conditions, as well as how the product will be marketed.

Why did this happen?

According to an ASIC spokesperson, due to the turmoil and speculative nature of the cryptocurrency markets, TMDs have been “very broad.” The regulator’s concern is that Holon “has not adequately assessed the features and risks of the funds to determine their target markets.”

According to the ASIC statement, the funds are not suitable for the broad target market covered by TMD, including funds with medium, high and very high risk and reward. Those who plan to use the fund as an “affiliate component” of their portfolio, up to 25%, and those who plan to use it for 75% to 100% of their investment portfolio.

The Product Disclosure Statement (PDS) provided by Holon warns that investors in crypto funds may face significant negative returns and even a “total loss of value.”

The statement added,

“ASIC has issued temporary orders to protect retail investors from potential participation in funds that may not be appropriate for their financial objectives, situation or needs.”

The order will be valid for 21 days if it is not canceled prematurely.

The temporary suspension will prevent Holon from distributing the public distribution system, providing general advice on funds or issuing units of funds to individual investors.

A final restraining order will be issued if Holon fails to resolve the issues “in a timely manner”, although Holon will have the opportunity to present arguments before such an order is issued.

The funds, which bear the names Holon Bitcoin Fund, Holon Ethereum Fund, and Holon FileCoin Fund, are all managed investment schemes that seek to provide exposure to the corresponding cryptocurrency price. The plans are funded by investors who pool their money in exchange for a share of the program’s profits.

What does this mean for the future of cryptocurrency in Australia?

Australia is one of the top countries that has seen a significant increase in crypto activity in recent years. Research conducted by SEC Newgate for ASIC in November 2017 open Only 20% of Australian retail investors consider cryptocurrency to be high risk while 44% admit to holding cryptocurrency.

ASIC President Joe Longo responded by saying that the regulator is “concerned by the lack of adequate safeguards for investments in crypto assets as they become increasingly prevalent and are widely marketed and marketed. To better protect investors, crypto asset regulation is sensitive.”

In other news, Coinbase announced that it will now offer its services to retail users in Australia, simplifying the buying, selling and trading of digital assets.

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