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Australian watchdog releases guidelines for crypto ETPs

Updated: Aug 23, 2024
Published: Oct 29, 2021
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The Australia Securities and Investments Commission (ASIC) has published its response to the public consultation on exchange-traded cryptocurrency products (ETPs), along with new guidance for the industry.

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Providers won't have to hold domestic crypto custody

On October 29, the regulator released a set of regulatory requirements for funds seeking to offer crypto ETPs, including exchange-traded funds (ETFs) and structured products, following a months-long industry consultation that began in late June. According to official guidance, ASIC has so far approved ETPs based on major cryptocurrencies such as Bitcoin and Ether and expects other crypto assets to serve as the basis for ETPs in the future.

For a cryptocurrency to become a suitable basis for a crypto ETF, crypto-assets should have a high level of institutional support, a mature spot market, a regulated futures market, reputable and experienced service providers, and transparent pricing mechanisms, the guidelines state. In response to the public consultation, ASIC also said it does not require domestic crypto custody for firms issuing crypto ETFs, noting that such restrictions would unfairly limit competition.  The document stated 'While we acknowledge concerns raised by respondents about overseas-based custody of crypto assets such as the potential for difficulties in recovering assets across jurisdictions, we consider it would be inappropriate to mandate a domestic custodian requirement,”

Australia is getting into crypto ETFs

The news comes shortly after Australian hedge fund manager Cosmos Asset Management unveiled its crypto-mining ETF at Chi-X Australia on October 28. The Cosmos Global Digital Miners Access ETF began trading under the ticker DIGA and tracks several companies, including Riot Blockchain, Marathon Digital, Hive Blockchain Technologies, Hut 8 Mining, and others.

Australian ETF provider BetaShares is also preparing to launch a crypto ETF tied to industry companies like Coinbase and MicroStrategy. The crypto ETF will reportedly begin trading on the Australian Securities Exchange under the ticker CRYP next week.

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