The Australian Securities and Investments Commission (ASIC) announced today that it had suspended asset management company Holon Investments from offering three crypto-related services to retail investors.
Holon Investments Violates Market Rules
The market watchdog noted that the suspension resulted from the company’s violations of the Target Market Determinations (TMDs) rules. TMD is a government document that outlines a series of laws that allow companies to understand the class of consumers designed to use a particular product and their market audience.
The regulator further noted that the products failed to meet some of the criteria outlined in the TMD document in determining their target audience, thereby considering the funds unsuitable for the broad target market described in the TMD, which includes investors.
As a result, the Sydney-based investment company has been banned from offering customers three crypto-tracked funds for 21 days.
The products, which include Bitcoin (BTC), Ethereum (ETH), and Filecoin (FIL), are managed by the cryptocurrency exchange Gemini.
The asset manager is also prohibited from providing general advice, giving product disclosure statements, or recommending investments in the Funds to customers until the ban is lifted.
More Regulatory Actions
The market regulator noted that the latest developments sought to protect retail investors from making investment mistakes and potentially losing their assets due to the inherent volatility of the digital assets associated with the Funds.
ASIC believes the company did not “appropriately consider” the risks involved with its products before choosing its market target.
The regulator has urged Holon Investments to consider its concerns about the Fund and take immediate steps to ensure compliance with the rules.
“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,” said the market watchdog.
The regulator also hinted that it could pursue further regulatory action against Holon and its product offerings if the company refuses to meet its concerns.
