SBI Group Launches Japan’s First “Crypto Asset Fund”

SBI Group, a major Ripple Asian partner, has announced the launch of the ‘SBI Cryptocurrency Asset Fund,’ which will allow general investors to hold seven different cryptocurrencies, including Ripple (XRP), Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH), Polkadot (DOT), Chainlink (LINK), and Litecoin (LTC) and none of the cryptocurrencies in the fund have a ratio more than 20%.  

This is the first time a cryptocurrency fund has been launched in Japan, Tokyo’s largest financial services provider said in an official statement, “the SBI Group will start handling the SBI Crypto Asset Fund, which is the first in Japan to invest directly in crypto assets, for general investors. In the United States, the value of cryptocurrency assets has increased from the perspective of future practicality, such as the start of trading of Bitcoin futures ETFs and the widespread use of NFTs (non-fungible tokens) using blockchain technology”.

  • Invest in 7 crypto assets with rule-based allocation according to market capitalization ratio
  • “Initial buying” and “selling toward maturity” will take 3 months each, aiming to reduce investment risk by time diversification.
  • Automatic rebalancing of investment ratio allocation once a month

Earlier this September 2021, Tomoya Asakura, the president of SBI affiliate Morningstar Japan K.K. and the head of asset management for Japan’s largest online brokerage, told Bloomberg that “I want people to hold it together with other assets and experience firsthand how useful it can be for diversifying portfolios, if our first fund goes very well, we’d like to move quickly”

SBI Alternative Investment Fund GK is in charge of this fund. The minimum investment amount is 5 million yen ($45,000) or higher, with a one-year investment contract. Investors must have a general securities account with SBI Securities in order to trade new products in SBI. The corporation may, however, opt to release the funds in smaller chunks of 1 million yen apiece.

Prior to making a purchase, investors will be required to go through an application procedure that involves an anonymous partnership agreement with SBI Alternative Fund. According to the firm’s explanation, “since it is not fit for all clients, it can only be purchased by customers who fulfill specific requirements defined by our company”. Furthermore, the crypto investments made by such anonymous associations will be managed by SBI VC Trade, a sister business that specializes in cryptocurrency trading.

To ensure the fund’s lifespan, SBI has indicated that it “cannot be terminated within one year,” from February 1, 2022 to January 31, 2023. Unrealized capital gains taxes will also be levied on investors, in addition to other shared charges such as establishment and liquidation fees and audit expenses. SBI has imposed an age limit for this fund of 20 to 70 years old and will impose a three-month lock period on all purchases in order to “lower investment risk by diversifying time.”

SBI took four years to get the fund off the ground, due in part to tougher restrictions imposed in reaction to hacking and other domestic scandals that required revisions to its initial plans. The Financial Services Agency, the country’s financial regulator, barred corporations from selling cryptocurrencies through investment trusts, a popular method of investing in Japan that SBI had originally planned to employ. Instead, the brokerage chose “anonymous partnership” as a vehicle.

Cryptocurrency funds, as opposed to “core” assets in a portfolio, can enhance total returns, according to Asakura, without providing a projected amount of return for the portfolio. If there is adequate demand, SBI is ready to create another fund intended particularly for institutional investors, he added.

SBI Group, in collaboration with Ripple, is developing the remittance network across Asia, including Japan, Southeast Asia, and Taiwan, utilizing Ripple Net.











Image: Yoshitaka Kitao, President and CEO of SBI Holdings (facebook.com/yoshitakakitao/photos/949233291831358)

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