Jacobi Asset Management seeks FCA’s greenlight for Bitcoin-pegged ETF

abdelaziz Fathi

Crypto asset manager Jacobi Asset Management has received a regulatory go-ahead for an exchange-traded fund that seeks to track the price of Bitcoin (BTC) while satisfying the laws in the UK.

Bitcoin inventor is Australian scientist Dr Craig Wright!

The newly-launched firm said its “Jacobi Bitcoin ETF” is a centrally cleared crypto-backed financial instrument. The investment vehicle has reportedly won approval of the Financial Services Commission (GFSC) in Guernsey, a British crown dependency and island.

Fidelity’s cryptocurrency investment arm will provide custody for the ETF, which Jacobi plans to list on Cboe Europe, subject to the Financial Conduct Authority (FCA) approval. While Fidelity Digital Assets continues to be solely focused on institutional customers, this is one of the first custody service agreements that the fund manager has made public.

The open-ended fund will provide exposure to the underlying performance of Bitcoin without handling the assets directly. The exchange-traded fund is open for accredited investors only and applies a minimum subscription fee of $100,000.

If approved, Jacobi will be one of the first companies to offer the volatile crypto asset through mutual funds in Europe. Since most regulators restrict cryptocurrencies from directly being held in funds, such crypto-linked funds may be a workaround to offer bitcoin-based funds.

Jacobi Asset Management kicked off its operation in May 2021 and is headed by former Goldman Sachs investment banker Jamie Khurshid.

Commenting on the news, CEO Jamie Khurshid said: “We are excited to be launching a new secure, transparent and accessible product to track the performance of Bitcoin. We are de-risking investments in crypto by removing the technology risk associated with the physical asset and the counterparty risk associated with traditional funds or tracker products that are unregulated leveraged debt instruments. We are proud to collaborate with Europe’s leading regulated firms for a truly tier 1 offering to service market demand, subject to the necessary regulated approval. This is an exciting moment for Europe as regulatory approval comes ahead of those waiting for a decision from the U.S. Securities and Exchange Commission.”

“The Jacobi Bitcoin ETF will finally bring digital assets wholly into the mainstream investment infrastructure with the support of the leading firms we are working with. It will provide investors with the opportunity to participate directly in physically-settled Bitcoin. This new ETF provides simple, secure, accessible investing into one of the world’s most exciting asset classes via some of the world’s leading regulated entities,” added Roy McGregor, Chairman of Jacobi Asset Management and former CEO of Credit Suisse Channel Islands.

Regulators in the US are yet to approve an ETF that directly invests in cryptocurrencies, although at least a dozen issuers have filed for authorization for such a fund.

The approval of a regulated crypto derivative this year was looking far less likely this month, as the US regulators once again deferred their decision on whether to approve any of three proposed Bitcoin ETFs.

SEC Chair Gary Gensler said that he would be open to approving a bitcoin-futures ETF, but only under certain conditions. The revelation rankled some fund managers who were hopeful of a physically backed ETF, but regulated like a normal exchange-traded fund under a 1933 law.

Read this next

Industry News

Celsius $750m insurance claims are fraud, says lawyer seeking EU crypto superfund

“It is an intentional deception in aid of a billion-dollar securities offering.”

Institutional FX

DGCX brokers authorized to provide derivatives trading and clearing services

The DFM is looking to provide multiple asset classes such as; equities, ETFs, equities’ futures, crude oil futures, etc. to meet the growing demand from its diversified base of local and international investors.

Digital Assets

EQONEX leaves “crowded crypto exchange space” amid crypto winter

“The recent extreme market volatility and declining trading volumes have added to the headwinds being felt by exchange operators. We take a realistic view that our exchange will not move the needle for us financially over the near-to-medium term.”

Digital Assets

FTX and Paradigm partner for spreads trading: lower risk, lower fees

“This structured spread trading product is the first that will enable crypto investors to utilize cash and carry trades through FTX and Paradigm.”

Industry News

SEC uncovers online retail brokerage hacking scheme

Fraudsters were able to sell their holdings at artificially high prices and reap more than $1 million in illicit proceeds, the SEC alleged. 

Executive Moves

Cornerstone FS taps James Hickman as CEO

“I see great potential in the business from its proprietary technology to its regulatory permissions. It is already delivering an exceptional service to its SME customers and the scalable platform is ideally positioned to add further product capability.”

Retail FX

FCA warns of Lite Forex Pro as crackdown on clone scams continues

The UK Financial Conduct Authority has put out a press release that warns about a new ‘clone firm’ investment scam impersonating LiteForex‎, which rebranded last year as LiteFinance.

Digital Assets

Novogratz’s Galaxy Digital backs out of $1.2 billion deal to buy BitGo

Crypto merchant bank Galaxy Digital would not move forward with its bid to buy digital-asset custodian BitGo.

Executive Moves

OctaFX elevates Nikolas Charalampous to executive director role

OctaFX has promoted its head of dealing, Nikolas Charalampous, to the role of executive director, which saw the expansion of his day-to-day responsibilities and oversight.

<