The asset management company 21Shares recently launched two cryptocurrency index exchange-traded funds (ETFs) regulated under the Investment Company Act of 1940. This structure is expected to significantly enhance investor confidence by incorporating the products into the same disclosure and governance rules framework as traditional U.S. investment funds.
These two innovative products—the 21Shares FTSE Crypto 10 Index ETF (TTOP) and the 21Shares FTSE Crypto 10 ex-BTC Index ETF (TXBC)—were officially announced on Thursday. Both track the FTSE Russell cryptocurrency index and hold a basket of top crypto assets by market capitalization, rather than investing in a single token, providing investors with a broad range of digital asset allocation options.
Federico Brokate, Head of Global Business Development at 21Shares, noted, "Index funds allow investors to gain diversified exposure to traditional assets, particularly in the stock market. The same principle applies to the crypto investment space."
21Shares has been active in the cryptocurrency exchange-traded products market and was recently acquired by FalconX for an undisclosed amount. The company will continue to operate independently under the FalconX group.
The Investment Company Act of 1940 serves as the core regulatory framework governing U.S. mutual funds and most traditional ETFs, imposing strict requirements on custody arrangements and investor protection measures.
This stands in stark contrast to the Securities Act of 1933, which primarily applies to grantor trust structures holding physical commodities—this has also been the regulatory model mainly applied by regulators to U.S. spot crypto products to date.
Cointelegraph previously reported that the Securities and Exchange Commission (SEC) has approved a crypto ETP under the 1933 Act—the Rex-Osprey Doge ETF, which was officially launched in September.
As of now, the SEC has primarily approved spot Bitcoin (BTC) and Ethereum (ETH) products under the 1933 Act, rather than as fully regulated investment company ETFs under the 1940 Act.
Since the launch of spot Bitcoin funds at the beginning of 2024, demand for crypto ETFs has continued to surge. BlackRock has maintained a leading position in this field: its IBIT Bitcoin ETF has accumulated approximately $70 billion in assets under management within just a year and a half of its listing.
Related: MoonPay launches enterprise-grade stablecoin suite M0, attracting former Paxos executives
Original article: “21Shares Launches Crypto Index ETFs Regulated by SEC’s 1940 Act”
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