According to Bloomberg, the first crypto hedge fund approved was Prime Factor Capital, a full-scope alternative investment fund manager by the Financial Conduct Authority. The Financial Conduct Authority is considered a UK watchdog hence, the firm will abide by European regulations. These guidelines avail the firm an opportunity to keep over 100 million euros in assets under management. Additionally, It is the first agency to be approved to invest exclusively in the cryptocurrency asset class.
According to the founders, a focus on a single asset class including the market distrust allows them to move beyond their global competitors and become the trusted authority in crypto investing. “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,” Adam Grimsley, Prime Factor’s chief operating officer, told Bloomberg.
Prime Factor now has to appoint a custodian who will act independently of the firm and also provide cash flow reconciliation under EU regulations to ensure and validate investors’ returns and the fund’s holdings. According to a company statement, the firm manages funds for professional and institutional investors with the likes of high net worth individuals, family offices, and private wealth managers. Concerning the firm’s investment strategy there is no information about it in the public. The team is said to be made up of former employees from Blackrock, Legal & General, Goldman Sachs, and Deutsche Bank.
The company CEO Nic Niedermowwe published a report on their website; he titled it “The Fallacy of Uncollateralised Stablecoins,” and argued that uncollateralized stablecoins are problematic through his writings. Also, he addressed topical subjects like bitcoin scalability. The company did not respond to a request for comment. Previously announced was Prime Factor Capital’s equity financing round. It was made possible by Speedinvest, a European Fintech investor, and Entrepreneur First, a talent investor.
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