Digital asset manager Monochrome has received regulatory approval from the Australian securities watchdog to offer crypto exchange-traded funds (ETFs). With this, the Monochrome Bitcoin Fund will launch a bitcoin ETF in Australia with a unique form of regulatory approval.
As per the official announcement, Monochrome is one of the first asset management firms to be authorized under an Australian financial services license (AFSL). This will offer retail investors fully regulated access to crypto-assets such as bitcoin and ether.
The fund’s responsible entity partner Vasco Trustees received a unique license on Tuesday to operate spot crypto-based ETFs. Vasco Trustees also received accreditation from the Australian Financial Services (AFS) through the Australian Securities & Investments Commission (ASIC), providing the fund crypto-asset authorization.
Vasco’s approval through AFS provides investors with more transparent expectations of a spot ETF by requiring segregated on-chain assets, so as to not intermingle with assets on Monochrome’s balance sheet.
Moreover, per AFS guidelines, private key storage for bitcoin is to be stored such that it minimizes the risk of loss and unauthorized access. AFS guidelines also suggest that asset managers do not use hot wallets or wallets connected to the internet.Â
The regulator states that the asset managers should use cold storage or devices with limited connectivity to the internet. However, AFS licensure wrote that the investors should have access to an appropriate compensation system in case of loss of private keys.
Monochrome CEO, Jeff Yew, also commented that the regulator’s approval of this license variation demonstrates a major step forward for both the advice industry and retail investors. The move allows advisers to meet the market demands of their clients when it comes to the nascent crypto-asset class.
On the other hand, the US continues to lag in the ETF ecosystem. Last month, the largest digital asset manager in the world Grayscale revealed that the Grayscale Bitcoin litigation might take from one to two years.
