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According to a report by Financial Times, London-listed leading investment firm Jupiter Asset Management (JUN), managing assets worth over $65.8 billion, was forced to abandon an investment in an exchange-traded product (ETP) due to regulatory restrictions in Ireland.
Jupiter Asset Management Incurs $834 Loss from Canceled Investment
At the heart of the abandoned investment was Jupiter Asset Management’s gold and silver fund, which had allocated $2.58 million to the Ripple XRP ETP offered by 21Shares in the first half of 2023. According to the Financial Times, this investment was abruptly terminated following the identification of a compliance concern during the company’s routine monitoring procedures.
The report cites sources stating that Jupiter Asset Management suffered a loss of $834 due to the cancellation of the fund.
Regulatory Variations Across Jurisdictions at the Heart of the Issue
The driving force behind the investment cancellation is identified as the contrasting regulatory environment governing cryptocurrency investments across Europe. Specifically, Jupiter Asset Management’s gold and silver fund is located in Ireland, where regulations prohibit cryptocurrency investments within UCITS (Undertakings for Collective Investment in Transferable Securities) or tradable investment funds. In contrast, other European jurisdictions like Germany allow investment funds to include cryptocurrencies in their portfolios.
The incident involving Jupiter Asset Management underscores the urgent need for a harmonized regulatory framework governing cryptocurrency investments across Europe. Disjointed regulations not only create challenges for asset managers operating in multiple jurisdictions but also lead to uncertainty and potential compliance issues for investment firms looking to enter the evolving cryptocurrency market.
Jupiter Asset Management’s cancellation of its XRP ETP investment serves as a stark reminder of the regulatory barriers and risks associated with navigating the developing landscape of cryptocurrency investments. While the emergence of spot cryptocurrency investment products in the US has contributed to recent market volatility, the regulatory fragmentation in Europe continues to pose challenges for institutional investors wishing to participate in the cryptocurrency market.
