A London-based investment firm, Jupiter Asset Management, has withdrawn its investment in the 21Shares Ripple XRP exchange-traded product (ETP) due to regulatory issues in Ireland.
According to the report from Financial Times, Jupiter invested $2,571,504 into 21Shares’ Ripple XRP ETP during the first half of 2023. Specifically, it was part of Jupiter's $565 million gold and silver fund strategy registered in Ireland. Yet, Jupiter liquidated its cryptocurrency-holding ETP for $2,570,670, losing $834.
UCITS (Undertakings for Collective Investment in Transferable Securities) is a regulatory framework set up by the European Commission for investment funds. However, Ireland's regulatory framework prohibits UCITS funds from touching cryptocurrencies.
“The trade was made, picked up by our regular oversight process, and then canceled,” the spokesperson from Jupiter added.
Jupiter says it has been stopped from holding cryptocurrency investments in the UCITS fund due to the Irish regulator's ban on the investment. While UCITS funds are allowed to invest up to 10% of their portfolios in illiquid assets (junk ratio), European regulators question whether this can include ETPs holding cryptocurrencies or not.