Jupiter Asset Management cancels XRP ETP investment plans

Jupiter Asset Management, a London-based investment firm with assets exceeding $65.8 billion, has reneged on its decision to invest in the 21Shares Ripple XRP exchange-traded product (ETP) due to regulatory concerns in Ireland.

Recall how Jupiter’s Gold & Silver Fund made purchased 21Shares’ Ripple XRP ETP in 2023 for $2,571,504.

Ireland’s regulatory framework, however, prohibits exposure to crypto in UCITS funds. UCITS, or Undertakings for Collective Investment in Transferable Securities, is a regulatory framework established by the European Commission for investment funds.

This prompted the fund’s restriction from holding the investment. And, according to the Financial Times, Jupiter sold the cryptocurrency ETP holding for $2,570,670 — a loss of $834,

Jupiter’s Gold & Silver fund is managed by Ned Naylor-Leyland, Chris Mahoney, and Joe Lunn. It had previously made a cryptocurrency investment in 2017, predating the Irish financial regulator’s clarification on such holdings.

While UCITS funds are permitted to allocate up to 10 percent of their portfolio to illiquid assets, known as the “trash ratio,” European regulators differ on whether this encompasses ETPs holding cryptocurrencies. Recent indications from regulators in Ireland and France suggest that UCITS are not allowed to invest in crypto assets.

During discussions at the Future of Asset Management conference in November, Cian Murphy, head of the international finance division at the Central Bank of Ireland, expressed skepticism about introducing crypto assets into UCITS. Jessica Reyes, head of the asset management policy division at the Autorité des Marchés Financiers, echoed the sentiment.

Moreover, UK and German UCITS funds are also prohibited from investing in crypto assets (in Germany, exposure to crypto ETPs, provided they reflect the underlying asset on a one-to-one basis, is permitted).