Monochrome Asset Management, an Australian asset manager has obtained the nation’s first Australian financial services license (AFSL) for operating a spot cryptocurrency exchange-traded fund (ETF).
Jeff Yew, CEO of Monochrome Asset Management, said that the AFSL clearance is noteworthy because, up until now, approved crypto ETFs in Australia have only been able to operate under general financial asset authorization and have only had indirect ownership of crypto assets.
Yew pointed out that Monochrome’s crypto ETFs, in contrast, will hold the underlying crypto-assets directly and are expressly permitted by the Australian Securities & Investments Commission (ASIC).
According to the Monochrome executive, the clearance marks a significant advancement for both the advisory sector and retail investors:
“We see choice being a good thing for investors, particularly when dealing in the regulated space, as not all offerings are equal.”
Investors who purchase Monochrome’s ETFs “will know that their funds are directly investing in Bitcoin (BTC) and Ethereum (ETH), and importantly inside the regulatory framework established by ASIC expressly for crypto-assets,” the executive stated.
There is currently no set date for the release of the Monochrome Bitcoin ETF (IBTC), but it is anticipated to happen in September 2022 after the PDS and TMD have been published and have received regulatory approval.
“Monochrome will focus on BTC and ETH because they are the only two crypto-assets currently identified by ASIC as being eligible for retail ETF exposure,” explains Yew of the ETFs when they become available.
We will approach the release of new items with an open mind as the market develops over time.
Pioneering crypto ETF
According to Yew, operating under an AFSL with a direct crypto-asset authorization means that the fund and the issuer are subject to strict ASIC scrutiny.
New regulated investment options are made available to direct retail investors and through qualified financial advisers after AFSL authorization.
The Australian Securities and Investments Commission (ASIC) has evaluated and determined that the licensee has the necessary experience in crypto-assets to run ETFs that directly contain Bitcoin and Ethereum, which is why the Australian Financial Services Licence variation was approved.
As a result, investors have additional protections based on ASIC’s Report 705 that include appropriate benchmarking against the spot price and custody options that comply with Australian law.
Former CEO of Binance Australia Jeff Yew founded Monochrome Asset Management in early 2021 to promote the institutional use of cryptocurrency assets in Australia.
Since February 2022, they have been working on an ETF strategy. According to the timeline, in this case, the procedure for a financial services license variation usually takes six to twelve months.
