ASIC temporarily shuts down Holon crypto funds

According to ASIC, the orders are for Holon Bitcoin Fund, Holon Ethereum Fund, and Holon Filecoin Fund. Stop orders prohibit crypto funds from offering their services to retail investors. The main reason for the forced measures is the fact that all of the funds are non-compliant to target market determinations (TMDs)

Holon crypto funds are unable to cooperate with investors during 21 days: to provide them with general recommendations, give a product disclosure statement and issue interest. In this way, the regulator plans to protect retail investors from investments that “may not be suitable for their financial objectives, situation or needs”. The regulator noted that Holon Investments has the right to meet its requirements to offer the products, otherwise, it will place a final stop order on the products.

In its product disclosure statements, Holon has revealed the risk that assets in the Funds could face a total loss of value. However, ASIC claims that Holon has not appropriately considered features and risks in determining their target markets.

Thus, the official documentation of Holon crypto funds indicated that they are designed for a wide target market, which includes investors:

Regulator representatives insist that concentrated investments in certain digital assets are accompanied by significant risks. This makes Holon crypto fund offerings dangerous for a wide target market. Within a specified period of time, Holon must take immediate steps to ensure compliance and consider the concerns raised about the TMDs - a document describing the class of consumers for which the product is designed. If ASIC’s concerns are not addressed in a timely manner, final stop orders will be placed on the Funds.

To date, the Australian regulator has already issued 10 interim stop orders.  Four of them have been lifted following actions taken by the entities to address ASIC’s concerns.