ASIC temporarily stops Holon crypto funds

Steffy Bogdanova
October 17, 2022 10:05 am

The Australian Securities and Investments Commission today announced that it has placed an interim stop orders on Holon Investments Australia Limited, preventing the firm from offering or distributing three cryptocurrency funds to retail investors.

According to ASIC’s announcement, the funds are Holon Bitcoin Fund, Holon Ethereum Fund and Holon Filecoin Fund, each of them invested in an individual crypto-asset – bitcoin, ether and Filecoin. The financial regulator stated that all three funds are non-compliant to target market determinations (TMDs).

The Aussie watchdog said that these funds not suited to the wide target market defined in the TMDs. These funds target investors with “medium, high, or very high” risk and return profiles and who are willing to use the funds as satellite component of up to 25% of their investment portfolio. The funds also allow investors to use them as a “solution/standalone component (75-100%) of their investment portfolio.”

ASIC ban

ASIC’s interim order is valid for 21 and stops the funds from issuing interest.

Investors in these funds are likely to experience significant price volatility and deep negative returns in periods of asset price decline. The highly volatile and complex nature of crypto-assets makes the investments “risky and speculative”. Holon has disclosed in its product disclosure statements, the risk that assets in the Funds could face a total loss of value.

ASIC stated:

ASIC made the interim orders to protect retail investors from potentially investing in funds that may not be suitable for their financial objectives, situation or needs.

ASIC expects Holon to consider the concerns raised about the TMDs and take immediate steps to ensure compliance. If ASIC’s concerns are not addressed in a timely manner, final stop orders will be placed on the Funds. Holon will have an opportunity to make submissions to ASIC before any final stop order is made.

LeapRate Analyst

Experienced writer and journalist, working in the global online trading sector, Steffy is the Editor of LeapRate. She has previous experience as a copywriter and has been with the company since January 2020. Steffy has a British and American Studies degree from St. Kliment Ochridski University in Sofia.
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