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In a statement made on September 29th, the Swiss Financial Market Supervisory Authority, FINMA, announced that it has approved the first Crypto Assets fund.
According to an article in the Business Times, the fund will invest mainly in assets based on distributed ledger or blockchain technology and is categorized under “other funds for alternative investments” with particular risks associated with it. The fund is further restricted to qualified investors only.
“In order to facilitate serious innovation, FINMA applies the existing provisions of financial market laws in a consistently technology-neutral way”, thereby making sure that new technologies are not being utilized to circumvent existing rules, so that “the protective goals of financial market legislation are preserved.”
Given the particular risks of this asset class, FINMA further added that the approval is tied to specific requirements, including that the fund may only invest in established crypto assets with sufficiently large trading volumes.
Another requirement specifies that investments can only be made through established counter-parties and platforms that are based in a member country of the Financial Action Task Force – an intergovernmental organization founded to develop policies to combat money laundering and terrorism financing.
Lastly, there are specific requirements related to risk management and reporting for the institutions involved to follow.
This latest development presents another move to make crypto asset investments more accessible within a well- regulated framework, thus allowing for more widespread institutional adoption of the asset class.
At DeFi Consulting Group, we specialize in helping institutions understand and gain access to Crypto Assets and Decentralized Finance. Reach out to our team for guidance on how to effectively approach this space.
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