A company based in London, Jupiter Asset Management, has canceled its investment in a crypto ETP following compliance problems, as reported by the Financial Times.
The Irish-based company’s Gold & Silver fund made an initial investment of $2.57 million in 21Shares’ Ripple XRP ETP for the first half of 2023.
As a routine part of the oversight process, the investment was flagged and the compliance team ordered the liquidation of the fund’s holdings, which led to a loss of $834.
The cancellation was triggered by the Irish authorities banning crypto exposure in funds directed under Undertakings for Collective Investment in Transferable Securities (UCITS), the regulatory framework for selling mutual funds in the EU.
UCITS funds that hold Jupiter’s Gold & Silver fund can have up to 10% of their portfolio in illiquid assets. The division of European regulations is a factor that creates uncertainty on whether the funds can invest in cryptocurrencies.
Ireland, France, and the UK explicitly ban UCITS funds from investing in crypto assets and Germany allows such investments with the condition that they are subject to specific requirements.
DWS Fintech fund holds VanEck Ethereum ETN, constituting 0.35% of its portfolio. DWS clarified its manager has selected funds investing in cryptocurrencies, excluding institutional mandates and multi-asset funds.
DWS Global Co-head of Equities, Thomas Schuessler, sees crypto as “risk-on gold” with low correlation to other assets, emphasizing cautious buying.
This event gives rise to a question about a unified crypto investment policy in the EU.
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