ASIC gives trading of Bitcoin, Ethereum ETFs green light

“Crypto assets have unique characteristics and risks that must be considered by product issuers and market operators in meeting their existing regulatory obligations,” ASIC Commissioner Cathie Armour said.

Loading

“The good practices we published provide practical examples of how these obligations may be met, in a way that maintains investor protections and Australia’s fair, orderly and transparent markets.”

ASIC’s guidelines will also place a significant onus on market operators such as the ASX, who will be required to assess which cryptocurrencies are acceptable for an ETF. This assessment includes if there is a high level of institutional support for the asset and if there’s a number of reputable service providers for the asset, a mature spot market, a regulated futures market and transparent pricing mechanisms.

Currently, only the two largest cryptocurrencies, Bitcoin and Ethereum, fit these criteria, though ASIC says it expects the number of cryptos that can satisfy these requirements to expand over time.

A spokesperson for the ASX told The Age and The Sydney Morning Herald the exchange operator welcomed the regulatory guidance, saying it was a “positive development”.

“We have been working with a range of issuers interested in launching ETPs that invest in crypto-assets and are very aware of the high level of interest amongst investors for products that provide access to these assets,” they said.

The bourse said it would now assess modifications it would have to make to its rules supporting ETP trading, “as well as those that might be required to other systems, processes and compliance functions that ensure ASX maintains a fair, orderly and transparent market”.

The Market Recap newsletter is a wrap of the day’s trading. Get it each weekday afternoon.