For a spot cryptocurrency exchange-traded fund (ETF), Australian asset manager Monochrome Asset Management has obtained the nation's first Australian financial services licence (AFSL). The Australian Securities & Investments Commission (ASIC) has expressly granted Monochrome permission to hold the underlying crypto assets directly through its crypto ETFs. 

Although a specific release date for the Monochrome Bitcoin ETF (IBTC) is unknown, it is anticipated to occur in September 2022 when the PDS and TMD have been published and have received the regulator’s approval. Currently, ASIC considers only two crypto-assets BTC and ETH as being eligible for retail ETF exposure hence Monochrome will also focus on these two according to Yew of the ETFs when they become available.  

The ASIC has evaluated and determined that the licensee has the necessary experience in crypto-assets to run ETFs containing Bitcoin and Ethereum directly. Due to this reason Australian Financial Services Licence variation was approved. Usually, the procedure for a financial services licence variation takes six to twelve months. 

Jeff Yew, CEO of Monochrome Asset Management, highlighted that the AFSL clearance is essential. Up till now, crypto ETFs that are approved in Australia have only been able to operate under general financial asset authorization and have only had indirect ownership of crypto assets. Yew pointed out that Monochrome's crypto ETFs is different. It will hold the underlying crypto-assets directly and is expressly permitted to do so by the Australian Securities & Investments Commission (ASIC).  

The fund and issuer are subject to strict ASIC scrutiny if operating under an AFSL with a direct crypto-asset authorization. After AFSL authorization new regulated investment options are made available to direct retail investors and through qualified financial advisers.  

ASIC's Report 705 provides additional protection for investors, including appropriate benchmarking against spot prices and custody options in accordance with Australian law. Reported a warning about working with unregistered bitcoin businesses from Australia's banking authority.  

About Monochrome Asset Management :

In early 2021, Former CEO of Binance Australia Jeff Yew founded Monochrome Asset Management to promote the institutional use of cryptocurrency assets in Australia. Since February 2022, they have been working on an ETF strategy.