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03 July 2018 / nieuws

AFM publishes guidance for funds investing in cryptocurrencies

The AFM, considers investing in cryptocurrencies a high risk and questions whether investing in cryptocurrencies can fulfill the license requirements.

Belgian and European Fines for Non-Compliance with Standstill Obligation ('gun-jumping')

The AFM, like other national supervisors, considers investing in cryptocurrencies a high risk activity and questions whether funds investing in cryptocurrencies can fulfill the license requirements under the European AIFMD (2011/61/EU).

The AFM published guidance in the form of a letter to (existing and future) managers of alternative investment funds (AIFMs) that invest in cryptocurrencies.

The guidance covers the following topics in the context of cryptocurrencies:

  • liquidity management – AIFMs must ensure sufficient liquidity to enable participants to withdraw their investments;
  • product governance processes – AIFMs must have in place a product governance process, meaning they should have adequate procedures and measures to ensure that the interests of customers are taken into account in a balanced manner in the development of a financial product;
  • valuation of cryptocurrency – AIFMs must ensure a correct valuation of volatile assets such as cryptocurrencies;
  • standards for AIFMD depositaries – such depositaries should fulfill certain technical standards pursuant to the AIFMD and the Dutch Act on Financial Supervision (‘Wft’);
  • prevention of money laundering and financing of terrorism – AIFMs should fulfill the requirements of the Act to prevent money laundering and financing of terrorism (‘Wwft’), regardless of whether they are exempt from the license obligation under the Wft.

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