Crypto-stock ETF to hit the ASX

Crypto-stock ETF to hit the ASX

“But we’re well on our way,” he said. “An ETF structure provides much needed investor protection, and transparency and accountability, things that investors don’t get now buying cryptocurrencies in unregulated venues.”

The ASX’s attitude towards cryptocurrency businesses has seen bitcoin mining companies Mawson Infrastructure and Iris Energy look to list overseas, while mobile game developer Animoca Brands was booted from the ASX last year after its pivot towards non-fungible tokens (NFTs).

The Australian Securities and Investments Commission is finalising a consultation process to explore the potential for cryptocurrency ETFs to trade on the local bourse.

Australian retail investors currently get access to bitcoin via exchanges based offshore, such as Binance, which was banned from operating in Britain earlier this year, and local players like Independent Reserve and CoinJar.

These Australian exchanges have been vocal in the need for custody rules to protect investors. Overseas operators can introduce risk given the crypto holdings are based offshore and legal protections are unclear.

Retail investors can also access other crypto assets via decentralised exchanges, such as Uniswap or Sushiswap, which are not licensed by ASIC or operating with any regulator oversight.

ASIC’s adoption of a formal position on crypto-asset ETFs will help ASX and Chi-X decide whether they list the products.

“These are all things the regulators are working through now,” said Mr Vynokur. “It doesn’t have to be about speculating on the value of Bitcoin, or Ethereum, or Ripple.”

As it stands, VanEck and BetaShares have each lodged submissions with the ASX to list a crypto-backed ETF.

Mr Vynokur said the new ETF, named CRYP, will focus on pure-play crypto companies, companies whose balance sheets hold substantial amounts of cryptocurrency and diversified companies with crypto-focused business lines.

“I would love for the index to include Australian businesses, and there are a number of Australian businesses that could potentially be very well-suited,” he said.

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