Guernsey has approved its first cryptocurrency fund after its regulator, the Guernsey Financial Services Commission (GFSC), authorised Jacobi Asset Management to launch the world's first Tier 1 Bitcoin exchange-traded fund (ETF).
The fund was approved on 15 October and is available to institutional investors, and will seek approval from the Financial Conduct Authority in the UK to list on the UK-based arm of the Chicago Board Options Exchange, at which point it will become a Tier 1 ETF.
The ETF was designed by Guernsey-based regulatory consultancy Midshore Consulting, led by Managing Director Christopher Jehan, also Head of Fund Architecture at Jacobi and former Chair of the Guernsey Investment & Funds Association. The legal work was performed by Guernsey law firm Collas Crill, led by Partner Wayne Atkinson and Senior Associate Gareth Morgan.
Midshore has worked with Jacobi since early 2021 to design and develop the fund and its operating model, ensuring that strict Guernsey regulatory requirements have been met. The final product brings together both Guernsey and international service providers, ensuring that local requirements are met whilst allowing the flexibility of working with blue chip global firms experienced in this type of esoteric asset.
Christopher said the deal demonstrated the GFSC to be open to new asset classes and praised its flexible regime.
"This project required early and frequent engagement with the GFSC and development of a key controls framework to ensure that regulatory requirements were considered at an early stage and kept in mind throughout the project," he added. "It is also a great achievement to be able to show that Guernsey is open for financial services products involving crypto assets.
"Having worked alongside Jacobi since the start of the year we are really happy with having reached this stage of regulatory approval."
Jacobi CEO Jamie Khurshid was 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," he said. "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."
For more information about Guernsey's finance industry please visit www.weareguernsey.com.
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