Monochrome Eyes Spot Bitcoin ETF In Australia, U.S. Lags Behind

The fund’s responsible entity partner received unique licensure which will give investors more transparent and direct exposure to bitcoin through a spot ETF.

• Monochrome is eyeing a spot bitcoin ETF in Australia, adding to an already crowded market in the country.
• The fund’s partner has received unique regulatory approval to offer direct exposure to bitcoin.
• The U.S. continues to lag behind in the spot bitcoin ETF ecosystem.

Monochrome Bitcoin Fund will release another spot bitcoin exchange-traded fund (ETF) in Australia with a unique form of regulatory approval, per a report by the Financial Standard.

The bitcoin-focused asset manager’s responsible entity and custodial partner, Vasco Trustees, received licensure on Tuesday to operate spot crypto-based ETFs. Additionally, Vasco has also received accreditation from the Australian Financial Services (AFS) through the Australian Securities and Investments Commission (ASIC), giving the fund crypto-asset authorization.

Vasco’s approval through the AFS gives investors more transparent expectations of a spot ETF by requiring segregated on-chain assets, as to not intermingle with assets on Monochrome’s balance sheet. In addition, per AFS guidelines, private key storage for bitcoin is to be stored “in a way that minimizes the risk of loss and unauthorized access.”

AFS guidelines also suggest asset managers do not use hot wallets, or wallets connected to the internet. Instead, the regulator states asset managers should opt to use cold storage, or devices with limited connectivity to the internet. Furthermore, AFS licensure states that investors should “have access to an appropriate compensation system” in the event of a loss of private keys.

"The regulator's approval of this license variation represents a major step forward for both the advice industry and retail investors, allowing advisers to meet the market demands of their clients when it comes to the nascent crypto-asset class,” said Monochrome’s CEO, Jeff Yew, per the Financial Standard report.

Monochrome is one of the first asset managers in the country to receive this crypto-authorization from the AFS, the company wrote in a blog post.

Meanwhile, the U.S. continues to be a laggard in the ETF ecosystem. Not only have regulators not approved spot bitcoin ETFs, but some asset managers are resorting to outright litigation against the U.S. Securities and Exchange Commission (SEC) to gain any progress.