Australian regulator suspends Holon Investments’ Bitcoin, Ethereum, Filecoin funds
The Australian Securities and Investments Commission (ASIC) ordered Holon Investments Australia Limited will cease offering crypto investment funds to retail investors due to incomplete Target Market Decision (TMD) submissions.
A Target Market Determination (TMD) is a document that details the customer profile and risks associated with a product.
Holon has filed a TMD for a crypto fund investing in Bitcoin, Ethereum and Filecoin on behalf of a client. All three funds are managed by cryptocurrency exchange Gemini.
According to an Oct. 17 press release from ASIC, Holon’s TMD did not clearly define its target market and the associated risks for retail investors.
Holon said at TMD that target markets include “investors with medium, high, or very high risk and return profiles, as well as “using the fund for 75% to 100% of your investment portfolio.” I specified that investors are included.
ASIC notes that the fund is risky for retail investors due to high volatility. The regulator said:
“In periods of falling asset prices, investors are likely to experience significant price volatility and severely negative returns.”
As a result, regulators have ordered Holon to cease providing cryptocurrency fund services and investment advice to individual investors for the next 21 days.
In the meantime, Holon plans to update its TMD filing and redefine its target investors and risk profile.
The regulator said:
“If ASIC’s concerns are not addressed in a timely manner, a final stop order will be issued to the fund.”
ASIC may consider taking regulatory action against Holon if Holon fails to comply with the order.
