Jupiter Asset Management is reportedly facing a compliance hurdle that can lead to the cancellation of a crypto exchange-traded product (ETP) investment. The report depicts that Jupiter’s Gold & Silver fund had invested $2.58 million in 21Shares’ Ripple XRP ETP during the first half of 2023. This move had landed the asset managers in trouble.
Jupiter in trouble?
As reported, Jupiter Asset Management’s compliance department intervened in the matter. It prevented its investment team from holding a cryptocurrency ETP in its Irish Ucits fund. The investment in 21Shares’ Ripple XRP ETP was flagged during a regular oversight process. The canceled deal resulted in a loss of $834.
The regulatory inconsistencies within the EU triggered the compliance clash. In this case, Ireland prohibits crypto investments in Ucits funds while Germany allows it. The incident showcases the urgent need for a unified crypto investment framework in the EU.
Ucits, or undertaking for investment in transferable securities, rules need to be more uniform across EU members. There needs to be more consensus on whether ETPs holding cryptocurrencies fall within the permissible investment limits adds complexity to decision-making.
It is important to note that this incident with Jupiter also highlights the broader challenges faced by asset managers. Especially to those seeking to include crypto assets in their funds. Divergent regulations can hinder the implementation of standardized investment rules across the continent.
What do rules suggest?
A development comes from the regulators in Ireland and France. They have expressed reluctance to allow Ucits funds to invest in crypto assets. The watchdogs mentioned the lack of comfort with crypto exposure has been noted by securities regulators.
While regulatory issues emerge in the EU, the global trend in the crypto industry continues to evolve. The US SEC approved spot crypto products adding to a positive sentiment in crypto markets.
The global crypto market is closing to the $2 trillion mark. It recorded a surge of around 1% in the last 24 hours to stand at the $1.95 trillion mark. However, the trading volume took a hit as it dropped by over 10% at the same time to stand at $87 billion. Bitcoin is looking to grab a $53,000 price level next.
In the market, Jupiter faced challenges with its native token (JUP). The token is on a decline after an initial successful launch. Concerns about the token’s future and investor interest have led to a cautious outlook. JUP price dropped by another 7% in the last 24 hours.
