Swiss markets watchdog FINMA said on Wednesday (Sept. 29) it had approved the country’s first
fund that invests primarily in crypto assets based on the blockchain or distributed ledger technology.
The fund, which is restricted to qualified investors, goes by the name of the “Crypto Market Index Fund” and will now be sorted under the category of “other funds for alternative investments” with particular risks according to Swiss law.
Investing will only be possible through established counterparties and platforms platforms based in countries with FINMA-approved anti-money laundering regulations.
“In order to facilitate serious innovation, FINMA applies the existing provisions of financial market laws in a consistently technology-neutral way” the Swiss regulator said in a statement. “In doing so, it makes sure that new technologies are not being used to circumvent the existing rules and that the protective goals of financial market legislation are preserved” it added.
Since crypto assets involve particular risks, Switzerland’s financial markets supervisor said it also tied the approval to specific requirements in the present case. For instance, the fund may only invest in established cryptoassets with a sufficiently large trading volume.
According to Zug-based asset manager Crypto Finance, the passive investment fund,
will track the performance of the 10 largest cryptocurrencies from SIX Swiss Exchange’s Crypto Market Index.
The objective of the SIX Crypto Market Index 10 is to reliably measure the performance of the largest and most liquid crypto assets and tokens and provide an investable benchmark for this asset class. The prices for the crypto assets and tokens are obtained from multiple exchanges.
The Crypto Market Index Fund was launched by Crypto Finance, is administrated by investment management firm PvB Pernet von Ballmoos AG, with custody provided by regulated custodian SEBA Bank AG.
“The investment fund enables clients of innovative wealth and asset management firms to participate in this upcoming asset class and to further diversify their portfolio in a secure and regulated way” Bernadette Leuzinger CEO of Asset Management at Crypto Finance
Earlier this month, FINMA approved SIX’s plans to launch to operate a stock exchange and a central securities depository for digital assets in Switzerland.
As Swiss financial authorities give more regulatory permissions for crypto investment vehicles,
crypto assets are getting popular among the country’s wealth management firms and private banks.
The rich Alpine country is also home to cryptocurrency ETP issuer 21Shares AG,
a Swiss digital assets management firm which crossed $1 billion in digital assets under management across its 12 different crypto ETPs earlier this year.
Cryptocurrency usage continues to gain traction not only in Switzerland. Big companies and even entire nations like El Salvador are incorporating crypto in their system.