Australia’s securities regulator opened a formal route toward locally traded crypto investment products on June 30, 2021, while stopping short of approving any fund. Consultation Paper 343 from the Australian Securities and Investments Commission proposed standards for exchange-traded products, or ETPs, that would invest in or provide exposure to crypto-assets.
The central conclusion was unusually specific. ASIC said bitcoin and ether were, at that point, the only crypto-assets likely to satisfy its proposed criteria for an appropriate ETP underlying asset. That assessment was preliminary, but it gave issuers and licensed market operators their clearest official indication yet of how an Australian product holding crypto directly might fit within the existing financial-services framework.
A proposed eligibility test
ASIC proposed five factors for judging an underlying crypto-asset: institutional support and acceptance; availability of experienced service providers; a mature spot market; a regulated derivatives market; and robust, transparent pricing suitable for intraday trading and daily net asset value calculations.
The consultation did not declare bitcoin or ether legally equivalent to securities, currencies or commodities. Instead, ASIC proposed a separate category of permissible underlying asset within market operators’ frameworks. The regulator emphasized that the broader legal classification of crypto-assets remained a matter for the Australian government.
That distinction was important on June 30, 2021. The paper addressed regulated investment products rather than rewriting the status of every token or crypto trading venue. ETPs, registered managed investment schemes, listed investment companies and listed investment trusts were already financial products or regulated vehicles under the Corporations Act. ASIC was considering how their existing obligations should apply when the exposure involved crypto-assets.
Pricing and custody become gatekeeping issues
The proposal treated market structure as more important than a token’s popularity. ASIC said an acceptable pricing mechanism should use an index from a widely regarded provider, represent a substantial share of relevant trading, resist manipulation and follow recognized benchmark principles. It considered reliance on one crypto spot venue insufficient because trading was fragmented across continuously operating global platforms and prices could diverge.
Custody received similarly detailed treatment. For responsible entities holding crypto-assets, ASIC proposed specialist custodians, on-chain segregation of scheme assets, tightly controlled private-key generation and storage, a preference for cold storage where operationally possible, and multi-signature or sharding-based signing rather than dependence on one private key.
Those provisions showed why the consultation mattered institutionally. A regulated wrapper could give retail investors crypto exposure through a licensed market, but the wrapper could not eliminate the underlying asset’s operational, liquidity or valuation risks. ASIC’s approach was to make issuers demonstrate that those risks could be managed within established fund and market rules.
What the June 30 record did not establish
Consultation Paper 343 was not an approval of a bitcoin or ether fund, a binding final rule or a guarantee that an exchange would admit such a product. ASIC expressly described its proposals as preliminary and invited comments through July 27, 2021. It also did not assess future returns or claim that an ETP would make crypto-assets safe.
No price movement is attributed to the consultation here. The cited records do not provide a controlled event window capable of separating the announcement’s effect from the many other forces influencing continuously traded bitcoin and ether markets.
Later context
On October 29, 2021, ASIC published final good-practice information following the consultation and reported receiving 32 non-confidential submissions. That later action confirms that the June 30 paper became part of Australia’s operational framework for crypto-related investment products, but it should not be read backward as a final decision already in force on June 30, 2021.
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This article provides news and analysis, not investment, legal or tax advice. Digital assets are volatile and may result in total loss.