CoinShares, a major European crypto asset manager, is launching a hedge fund division in the United States. While there may be some regulatory uncertainty surrounding cryptocurrencies in the country, CoinShares remains undeterred.
To facilitate their operations, a subsidiary registered as a broker-dealer with the Financial Industry Regulatory Authority (FINRA) will actively engage in marketing activities in the United States on behalf of the new hedge fund division.
CoinShares’ announcement on September 22, 2022, marks a new era for the company as it aims to introduce its investment offerings to the US market for the first time
CoinShares’ decision to launch a new hedge fund division directly responds to the increasing demand for crypto-based investment products, such as those based on Bitcoin.
According to CoinShares’ announcement, the new division’s products will focus on connecting traditional investors with the digital asset industry. While the company has not disclosed the specific products it will offer, it stated that its offerings will encompass a wide variety of crypto investment products, stating:
“By offering a diverse range of products, across the spectrum of beta and alpha strategies with hybrids in between, CoinShares aims to cater to the unique needs of each institution, facilitating the creation of a well-rounded and optimised crypto portfolio”
To facilitate its marketing efforts in the United States, CoinShares will leverage its subsidiary, CoinShares Capital, which is a registered broker-dealer with the U.S. Financial Industry Regulatory Authority (FINRA). This will enable CoinShares to reach out to qualified U.S. investors and promote its products to a wider audience.
Headquartered in Jersey, CoinShares is a global leader in the crypto investment space, offering a wide range of exchange-traded products (ETPs) based on cryptocurrencies such as Bitcoin and Ethereum. The firm launched its first Bitcoin ETP in 2015, followed by an Ethereum ETP in 2017.
In addition to its product offerings, CoinShares operates a robust research division that provides comprehensive analysis of the digital asset market and issues weekly crypto fund flow reports.
While CoinShares’ expansion into the U.S. market represents a welcome development, the company faces several challenges, including navigating a complex and evolving regulatory environment.
Coinbase and Binance.US are currently entangled in lawsuits with the U.S. Securities and Exchange Commission (SEC) over allegations of offering unregistered securities to their customers. In response, Coinbase is concentrating on global expansion, with a particular emphasis on Europe and the United Kingdom. The company has also reportedly explored the acquisition of FTX Europe, which could aid in expanding its derivatives business.