The Central Bank of Ireland has said it is unlikely to approve investment funds for retail crypto investors as they lack the know-how to manage a high-risk asset class.
The February 2022 Securities Markets Outlook Report: A Changing Landscape describes crypto assets as a new product being offered in the securities markets that is complex and a “potential threat to investor protection.”
Although the bank sent many requests for alternative investment funds (AIFs) in relation to cryptocurrencies last year, it is not currently expected to approve an AIF for retail investors in cryptocurrencies. The bank believes that such investments “may be suitable for wholesale or professional investors”, but are too difficult for small fish:
“The central bank is unlikely to approve UCITS or AIF for retail investors offering any exposure to crypto assets, given the specific risks associated with crypto assets and the possibility that proper risk assessment may be difficult for a retail investor without a high level of professionalism.”
UCITS is a transferable securities collective investment obligation that is used in the European Union (EU) as a regulatory framework for managing certain investments for sale within the EU.
Ireland’s Securities and Markets Supervisor Patricia Dunn gave some explanation for Bloomberg’s thinking on Feb. 8, stating that there are “too many unanswered questions about things like custody, money laundering and even just volatility and liquidity” regarding retail investment in cryptocurrencies..
Related: US lawmaker pushes for state-level regulation of stablecoins in digital asset hearing
Regulatory attitudes towards crypto in the neighboring UK are not much more favorable as HM Revenue and Customs (HMRC) recently laid out strict new rules for DeFi taxation. There, income from cryptocurrencies received as a result of bets is considered property and therefore subject to capital gains tax.
Yesterday, the Russian government agreed on a regulatory scheme that would allow residents to trade cryptocurrencies. Cryptocurrency will be treated as “analogue of currencies” and not as a currency itself, and any transaction in excess of $8,000 must be declared.
The Central Bank of Ireland has said it is unlikely to approve investment funds for retail crypto investors as they lack the know-how to manage a high-risk asset class.
The February 2022 Securities Markets Outlook Report: A Changing Landscape describes crypto assets as a new product being offered in the securities markets that is complex and a “potential threat to investor protection.”
Although the bank sent many requests for alternative investment funds (AIFs) in relation to cryptocurrencies last year, it is not currently expected to approve an AIF for retail investors in cryptocurrencies. The bank believes that such investments “may be suitable for wholesale or professional investors”, but are too difficult for small fish:
“The central bank is unlikely to approve UCITS or AIF for retail investors offering any exposure to crypto assets, given the specific risks associated with crypto assets and the possibility that proper risk assessment may be difficult for a retail investor without a high level of professionalism.”
UCITS is a transferable securities collective investment obligation that is used in the European Union (EU) as a regulatory framework for managing certain investments for sale within the EU.
Ireland’s Securities and Markets Supervisor Patricia Dunn gave some explanation for Bloomberg’s thinking on Feb. 8, stating that there are “too many unanswered questions about things like custody, money laundering and even just volatility and liquidity” regarding retail investment in cryptocurrencies..
Related: US lawmaker pushes for state-level regulation of stablecoins in digital asset hearing
Regulatory attitudes towards crypto in the neighboring UK are not much more favorable as HM Revenue and Customs (HMRC) recently laid out strict new rules for DeFi taxation. There, income from cryptocurrencies received as a result of bets is considered property and therefore subject to capital gains tax.
Yesterday, the Russian government agreed on a regulatory scheme that would allow residents to trade cryptocurrencies. Cryptocurrency will be treated as “analogue of currencies” and not as a currency itself, and any transaction in excess of $8,000 must be declared.
