Australia’s ASIC clamps down on three BTC, ETH, FIL-centric funds

ambcrypto.com:

Due to non-compliant target market determinations, Australia’s primary financial market regulator has issued temporary stop orders on three cryptocurrency-related funds that were going to be made available to retail investors (TMDs).

The Australian Securities and Investments Commission (ASIC) announced in a media statement that it has issued interim stop orders against asset management firm Holon’s cryptocurrency funds, each of which aims to invest in Bitcoin, Ethereum, and FileCoin.

Here, a target market determination is a document that specifies who a product is suitable for based on expected needs, objectives, and financial circumstances, as well as how the product might be marketed.

According to an ASIC spokesman, given the turbulence and speculative nature of the cryptocurrency markets, the TMDs were “too broad.” The regulator’s worry is that Holon “had not sufficiently assessed the features and hazards of the funds in determining their target markets.”

According to ASIC’s statement, the funds are not appropriate for the broad target market covered by the TMDs, including those with “medium, high, or very high risk and return profiles.” Those planning to use the fund as a “satellite component” of their portfolio, up to 25%, and those planning to use it for 75% to 100% of their investment portfolio.

The product disclosure statements (PDS) offered by Holon warn that investors in cryptocurrency funds may experience significant negative returns and even a “complete loss of value.”

The statement added,

“ASIC made the interim orders to safeguard retail investors from possibly participating in funds that may not be suitable for their financial aims, situation, or needs.”

The order would be in effect for 21 days unless it were to