Australian Securities and Investment Commission (ASIC) has announced that it has suspended three crypto funds in the country in its latest statement. According to the complete statement from the regulatory agency, this action was taken on the crypto funds because they failed to comply with the authority’s directive. The statement also clarified that the temporary suspension was placed on the three crypto offerings of the Holon Fund.
ASIC announces a temporary stop order on the Holon crypto funds
The Holon Fund offers three diverse ways for retail investors to enjoy investments in the crypto market. Their products allow traders to invest in Bitcoin, Ethereum, and Filecoin. The breach of the regulator’s directive that the company was found wanting was its lack of clarification of its target market determination. This term describes a document that houses the basic information of all the crypto funds.
This way, regulators know who it is suitable for based on other factors such as needs and financial capabilities. The document also holds information about how the company offering it intends to market and move the products around to reach its intended targets. A spokesman mentioned that the TMDs failed to tackle the issues seriously because of the volatile crypto market.
Holon is expected to make changes to its TMD
The ASIC statement also mentioned that Holon did not look into the product it was offering to assess the risks and choose the right market target. ASIC also mentioned that the funds were found wanting to satisfy the target market specified in the TMD. In the said document, Holon mentioned that it was open to all traders at all risk levels. It also mentioned that traders who intend to use up to 25%-100% of their investment portfolio could also use the product. ASIC mentioned that traders dabbling in crypto funds already prepare their minds for some portfolio losses.
Still, the statement in Holon’s TMD mentioned that they could end up losing all their money. The regulator said that it called to shield investors from entering into investment funds that could end up crippling their financial capabilities. The stop order will take effect today and run through 21 days, except if the regulatory body wishes to revoke it. Although the order is still relatively fresh, it is expected that Holon will look into it and make changes that will tally with the body’s requirements.
