UK Regulators Approve Their First Crypto Hedge Fund

  • Prime Factor Capital Ltd. becomes first crypto hedge fund to gain FCA approval.
  • Fund reports 147 percent YTD return as bitcoin's price continues to rise. 

London-based Prime Factor Capital Ltd. has just become the first cryptocurrency hedge fund to gain approval by UK regulators. 

FCA Approves Their First Crypto Hedge Fund

According to a report published by Bloomberg, Prime Factor Capital has received approval from the Financial Conduct Authority (FCA) to manage alternative investment funds which will focus on cryptoassets.

The hedge fund was originally established by former employees of BlackRock Inc. and RWE AG, bringing a substantial amount of experience to the table for the relatively new management group.

On July 1, the fund issued a statement informing clients it will be regulated as any other alternative investment hedge fund under European Union rules. According to the release, Prime Factor Capital is now able to manage more than $100 million euros in assets and can broaden their offering to institutional investors. 

Regulators have been slow to grant approval to cryptocurrency-related funds. While cryptoassets command a market capitalization of more than $300 billion, they have also exhibited massive volatility relative to traditional markets. Crypto and the exchanges that fuel the industry have thus far managed to operate in unregulated waters, which has led to the abundance of hacks and other shady dealings. 

Cryptoassets on the Rise

However, Prime Factor’s chief operating officer (CEO) and former BlackRock investor Adam Grimsley believes the FCA is being proactive in its decision. As cryptoassets gain popularity with retail and institutional investors, the need for some form of market oversight has increased. 

Grimsley told Bloomberg, 

“Most vehicles for investing in cryptocurrencies are outside the scope of regulators and that’s a big problem in a market that has such a bad reputation,”

As the first cryptocurrency hedge fund to gain approval by the UK’s regulatory watchdog, Prime Factor is now beholden to a set of requirements to remain in compliance. The management group will have to appoint an independent depository for oversight, cash flow reconciliation and safekeeping of assets.

In return, Grimsley says clients receive “assurance” on the fund’s returns and that the value of assets under management is consistent with what is being reported. 

Prime Factor Capital Crypto Hedge Fund Market PerformancePrime Factor 10 hedge fund performance | Source: Prime Factor Capital

According to the market performance indicator on their website, the Prime Factor 10 fund has generated a 147 percent Year-To-Date (YTD) return, closely tracking the rise of bitcoin. 

Unknown Fund Investing $75 Million in Bitcoin for the Development of Anonymity

  • Unknown Fund has pledged to donate and invest $75 million in bitcoin to promote the development of anonymity.
  • The fund will prioritize projects that protect personal data, including crypto and blockchain. 

An anonymous organization by the name of the Unknown Fund has pledged to donate and invest $75 million in bitcoin for the further development of privacy-focused projects. 

According to the press release published Nov. 13, Unknown Fund has announced an intention to invest and donate $75 million in BTC to “startups which directly or indirectly support the idea of anonymity.” The release claims the fund will give preference to projects focused on the protection of personal data, tools for anonymity, cryptocurrency and blockchain. 

An anonymous spokesperson for the fund said, 

We are you, we are your sons and daughters, brothers and sisters, friends and colleagues. Our ranks consist of representatives of many countries and nationalities, united by a virtual comradely spirit and the belief that we are fighting for the good of many, and not for the benefit of some. Anonymous is the voice of those who believe in truth, freedom and the right to self-expression.

The release claims the fund is comprised of “ordinary, anonymous people” from different countries who first met through collaborating on the forum 4chan. The group calls the protection of personal data “one of the main challenges for modern man” and claims that data collection has already been used as a powerful tool for manipulation. 

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