Jupiter Asset Management, a prominent investment firm headquartered in London and managing assets exceeding $65.8 billion, has reversed its decision to invest in the 21Shares Ripple XRP exchange-traded product (ETP) due to regulatory hurdles in Ireland.
The firm’s Gold & Silver Fund had previously acquired 21Shares’ Ripple XRP ETP in 2023 for $2,571,504. However, regulatory constraints in Ireland, where UCITS funds are restricted from exposure to cryptocurrency assets, forced Jupiter to divest its holding.
The regulatory framework under UCITS, established by the European Commission, prohibits investment funds from holding crypto assets, leading to Jupiter’s decision to sell the cryptocurrency ETP at a loss of $834, according to reports from the Financial Times.
Managed by Ned Naylor-Leyland, Chris Mahoney, and Joe Lunn, Jupiter’s Gold & Silver Fund had previously ventured into cryptocurrency investments in 2017, predating clarifications from the Irish financial regulator on such holdings.
While UCITS funds are allowed to allocate up to 10 percent of their portfolio to illiquid assets, recent indications from regulators in Ireland and France suggest that investing in crypto assets falls outside this scope.
During discussions at the Future of Asset Management conference, Cian Murphy, head of the international finance division at the Central Bank of Ireland, expressed skepticism about integrating crypto assets into UCITS. Similarly, Jessica Reyes, head of the asset management policy division at the Autorité des Marchés Financiers, shared similar sentiments.
Furthermore, UK and German UCITS funds face similar restrictions on investing in crypto assets. In Germany, exposure to crypto ETPs is permitted only if they mirror the underlying asset on a one-to-one basis.
The move by Jupiter Asset Management underscores the evolving regulatory landscape surrounding cryptocurrency investments, particularly within the framework of UCITS funds. With uncertainties persisting in various jurisdictions, investment firms navigate carefully to align with regulatory requirements while seeking opportunities in the burgeoning crypto market.
