The Australian version of the Financial Markets Authority has closed three crypto funds, because they according to the government body does not comply with the rules. It concerns a Bitcoin, an Ethereum and a FileCoin fund.
Too wide audience
The Australian Securities and Investments Commission (ASIC) believes that the funds’ documents do not adequately describe the audiences they target. These documents normally describe the type of investor for which the product is interesting. This is what funds do normally based on the needs, goals and financial situation of the investors.
“The target audience of the funds is too broad […] especially given the volatility and speculative nature of the crypto market,” according to the Australian version of the SEC. In a declaration the government financial body even indicates that it does not consider the funds suitable for people with a “high” or “very high” risk profile. They also see a scenario where clients of the funds are faced with a “total loss” of assets.
Investor Protection
Ultimately, ASIC indicates that they have made the decision in the context of the protection of individuals. Exactly the same reasoning that the US SEC has every time they reject a Spot Bitcoin ETF in the US. The strange thing there, however, is that Bitcoin Futures ETFs have already been approved, which are basically based on the same market. However, these are products that are not necessarily for individuals.
The company that planned to market the funds in Australia, Holon, has not yet commented on the matter. The idea was to run the Holon Bitcoin Fund, the Holon Ethereum Fund and the Holon FileCoin Fund together with the Gemini of the Winklevoss brothers. Incidentally, FileCoin is an extremely strange name next to Bitcoin and Ethereum. Perhaps it would have been better if they had kept it that way in the first place.