Three Australian cryptocurrency funders targeting retail investors have been put on a temporary hold by the Australian Securities and Investments Commission (ASIC).
The order has been issued in relation to non-compliant target market determinations (TMDs).
The funds, Holon Bitcoin Fund, Holon Ethereum Fund and Holon FileCoin Fund, will have to provide the requested TMDs before they can renew operations.
TMDs are important because they describe what a product is and who it is appropriate for. The document also provides information about the objectives of the products and its financial situation.
However, it’s important to understand that the three funds targeted by ASIC did not go ahead without any TMDs at all. Rather, the regulator argued that the TMDs it was provided with were “too broad” and required more specificity given the volatile nature of the target markets and assets.
ASIC continued by arguing in an official statement that cryptocurrency funds can end up exposing investors to significant financial risks and negative returns. The orders will be in effect over the next 21 days unless revoked before that.
“ASIC made the interim orders to protect retail investors from potentially investing in funds that may not be suitable for their financial objectives, situation or needs”, the watchdog’s statement read.
ASIC has made no public statement as to what it requested the funds to change in their TMDs.
Regulators have been very active in cryptocurrency space of late, understanding the need for a robust framework.
Meanwhile, there have been more calls to regulate crypto in other parts of the world, and especially in the US.
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