Financial Regulator of Croatia Approves Bitcoin Investment Fund

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In a recently issued report, published May 10, 2020: Croatia’s financial supervisory authority ‘Hanfa’ has officially announced its regulatory approval of Bitcoin investment fund ‘Griffon Asset Management’. Griffon Asset Management had originally applied for approval from HANFA on March 5, 2020 - however the approval was only officially received on May 10, 2020.

This documentation describes the approval of Griffon Asset Management’s establishment and management of an “open-ended alternative investment fund with a private offer Passive Digital Asset open-end alternative investment fund with a private offering.”.

Through the approval process, the company was required to - and successfully cooperated with requests to - submit company information, documentation, and amendments regarding its application upon regulator feedback. Licenses have been issued by Hanfa for the “establishment and management of an open-ended alternative investment fund with a private offering Passive Digital Asset as well as for executing “depositary activities” within operations.

Regulatory Limits: Griffon Asset Management

Griffon Asset Management is a fund which invests ‘exclusively’ in Bitcoin, and claims to offer ‘alternative investment funds’. It also boasts itself as “the first Croatian investment fund for investing in”. Little information is provided on the official website however.

According to the approval document released by Hanfa, the Bitcoin fund operated by ‘Griffon Asset Management’ an initial share offering to be operated by the fund is stipulated to last 15 working days:

“from the date of publication of the Hanfa decision (approving the fund’s operation) until the moment of collecting the minimum value of the Fund’s assets in the amount of 1,000,000 (one million) kuna, in which case the initial offer period ends on the next working day”. 

Investors in the fund are stipulated to be “persons who, in accordance with the law governing the capital market, are considered professional investors or, at their own request, may be treated as professional investors, as well as qualified investors.

During the initial offer period, the payment of the initial investment amount can be made in cash or by entering assets, but only by entering Bitcoin.”. It should be additionally noted that this is the first approval by Hanfa of this kind, for a Bitcoin alternative investment fund.

A 2.5% management fee comes with the Bitcoin fund; and Griffon takes 3.5% from investors who choose to divest in under one year; and 2.5% from investors divesting before two years, after which the exit fee is no longer applicable. There is no performance fee.

Republic of Croatia, and Cryptocurrency

Whilst the Griffon Asset Management fund approval represents a first in official cryptocurrency approvals, issued by a regulatory body; this isn’t the only recent pro-cryptocurrency activity exhibited by the country.

In December 2019, the Croatian postal service ‘Croatian Post’ launched a cryptocurrency exchange service - available at 55 post office locations in the country.

This service enables customers to exchange five cryptocurrencies (BTC, Ether, Stellar, XRP, EOS) for the local currency: Croatian kuna (HRK). Cash can be converted to fiat, by registering the request online - and taking a generated QR code to a participating post office in return for cash.
 

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