Jupiter Asset Management, a London-based investment firm with assets exceeding $65.8 billion, has reversed its decision to invest in the 21Shares Ripple XRP exchange-traded product (ETP) due to regulatory concerns in Ireland.
Remember how Jupiter's Gold and Silver Fund bought the Ripple XRP ETP from 21Shares in 2023 for $2,571,504.
However, Ireland's regulatory framework prohibits exposure to cryptocurrencies in UCITS funds. UCITS, or Undertakings for Collective Investment in Convertible Securities, is a regulatory framework created by the European Commission for investment funds.
This prevented the Fund from holding the investment. According to the Financial Times, Jupiter sold an ETP contract for the cryptocurrency for $2,570,670 – a loss of $834.
Jupiter's Gold and Silver Fund is managed by Ned Naylor Leyland, Chris Mahoney and Joe Lunn. It had previously made an investment in cryptocurrencies in 2017, before the Irish financial regulator clarified the holdings.
While UCITS funds are allowed to allocate up to 10% of their portfolio to illiquid assets, known as the “junk ratio,” European regulators disagree on whether this includes exchange-traded products containing cryptocurrencies. Recent indications from regulatory bodies in Ireland and France indicate that UCITS are not permitted to invest in crypto assets.
During discussions at the Future of Asset Management conference in November, Cian Murphy, head of international finance at the Central Bank of Ireland, expressed doubts about introducing crypto assets into UCITS. This view was echoed by Jessica Reyes, Head of Asset Management Policy at the Financial Markets Authority.
Furthermore, British and German UCITS funds are also prohibited from investing in crypto assets (in Germany, exposure to crypto ETFs is permitted, provided they reflect the underlying asset on an individual basis).
