Australian securities regulator issues guidelines for crypto ETPs

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The Australian Securities and Investments Commission (ASIC) has released its response to the public consultation on cryptocurrency exchange traded products (ETPs), along with new industry guidance.

On Friday, the regulator released a set of regulatory requirements for funds seeking to offer crypto ETPs, including exchange-traded funds (ETFs) and structured products, following months of industry consultation initiated in late June.

According to official guidelines, ASIC has so far given the green light to ETPs based on major cryptocurrencies such as Bitcoin (BTC) and Ether (ETH) and expects more crypto assets to become a basis for FTEs in the future:

“As of October 2021, Bitcoin and Ether appear likely to satisfy the five factors identified above to determine the appropriate underlying assets for an ETP. We expect the range of crypto assets from non-financial products that can address these factors to expand over time. “

“In order to become a suitable base for a crypto ETF, cryptoassets should obtain a high level of institutional support, a mature spot market, a regulated futures market, reputable and experienced service providers, and transparent pricing mechanisms. “, indicates the guide.

For each crypto ETF product application, approved exchanges should assess whether the issuer is able to meet its obligations regarding the product, including providing safe and secure custody as well as obtaining the relevant licenses.

In response to a public consultation, ASIC also said it does not require national crypto custody for entities issuing crypto ETFs, noting that such restrictions would unfairly limit competition.

“While we recognize the concerns raised by respondents regarding the overseas custody of crypto assets, such as the potential for difficulties in recovering assets in all jurisdictions, we believe it would be inappropriate to impose a requirement national guard, “the document says.

Related: Over 40 Digital Currency ETFs Await US Regulatory Approval

The news comes shortly after Australian hedge fund manager Cosmos Asset Management launched its crypto mining-linked ETF on Chi-X Australia on Thursday. The Cosmos Global Digital Miners Access ETF started trading under the symbol DIGA and follows several companies like Riot Blockchain, Marathon Digital, Hive Blockchain Technologies, Hut 8 Mining and others.

Australian ETF provider BetaShares is also gearing up to launch a crypto ETF linked to industry companies like Coinbase and MicroStrategy. The crypto ETF is expected to start trading on the Australian Securities Exchange under ticker CRYP next week.

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