London’s Jupiter Asset Management cancels $2.58 million XRP ETP investment due to compliance issues in its Gold & Silver fund.
Due to regulatory concerns in Ireland, Jupiter Asset Management, a London-based investment business with assets over $65.8 billion, has backed out of its plan to participate in the 21Shares Ripple XRP exchange-traded product (ETP).
Recall how Jupiter’s Gold & Silver Fund made purchased 21Shares’ Ripple XRP ETP in 2023 for $2,571,504. Due to Ireland’s regulatory framework, UCITS funds are not allowed to expose investors to cryptocurrency.
The European Commission established the UCITS, or Undertakings for Collective Investment in Transferable Securities, as a regulatory framework for investment funds.
This led to the fund being prohibited from keeping the investment. Furthermore, according to the Financial Times, Jupiter liquidated its cryptocurrency ETP position for $2,570,670, a loss of $834.
Joe Lunn, Chris Mahoney, and Ned Naylor-Leyland oversee Jupiter’s Gold & Silver fund. It had already invested in cryptocurrencies in 2017, before the Irish banking authority clarified the nature of these holdings.
While up to 10% of a UCITS fund’s portfolio may be allocated to illiquid assets (referred to as the “trash ratio”), different European regulators disagree on whether this includes exchange-traded funds containing cryptocurrencies.
Regulators in France and Ireland have recently hinted that UCITS are not permitted to participate in cryptocurrency assets. During a November Future of Asset Management conference, the Chief of the Central Bank of Ireland’s foreign finance branch, Cian Murphy, voiced doubts about putting cryptocurrency assets under UCITS.
The Autorité des Marchés Financiers’ Jessica Reyes, head of the asset management policy branch, repeated the idea. Additionally, it is against the law for German and UK UCITS funds to invest in cryptocurrency assets (although exposure to cryptocurrency ETPs is allowed in Germany as long as they mirror the underlying asset one-to-one).
