Crypto exchange-traded product (ETP) issuer 21Shares has pushed for European Union regulators to create a unified regulatory framework for the inclusion of crypto in investment products.
On Oct. 7, 21Shares urged the European Securities and Markets Authority (ESMA) to adjust its rule to include crypto assets in Undertakings for Collective Investment in Transferable Securities (UCITS) funds designed for retail investors, such as ETPs and exchange-traded funds (ETFs).
Current EU regulations for including crypto in these types of funds are inconsistent and vary across countries, causing confusion and inconsistencies for investors, 21Shares claimed.
It said Germany and Malta allow UCITS funds to hold crypto while other countries such as Luxembourg and Ireland don’t, it added.
21Shares argued that a unified EU framework would provide clarity for retail and institutional investors, ensure consistent investor protection, and align Europe with other markets like the United States and Hong Kong.
21Shares head of financial product development, Mandy Chiu, said in a statement the current regulations are a “patchwork” that creates confusion and prevents retail investors from accessing digital assets.
“By providing a consistent set of rules across Europe, ESMA could open up new avenues for investors to diversify and enhance their portfolios in a regulated environment that is designed for investor protection.”
The firm suggested the European securities regulator establish clear guidelines for indirect exposure to crypto assets through ETPs, which are traded like securities.
Related: Related: EU regulator sees crypto as sign of increased risk-taking in current climate
ESMA launched a consultation on reviewing eligible assets for UCITS in May, which closed on Aug. 7. The regulator is now considering feedback to develop an approach to potential changes in its regulatory framework.
21Shares offers over 40 ETPs on 11 exchanges. Its US-based spot Bitcoin ETF jointly operated with ARK Invest has $2.64 billion in assets under management.
It is the fourth-largest spot Bitcoin ETF by assets under management in the US after funds from BlackRock, Grayscale, and Fidelity.
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