Japanese Investors Get Their First Legitimized Exposure To Cryptocurrency with SBI Fund

Japanese financial conglomerate, SBI holdings has officially released a new cryptocurrency fund that will give investors in Japan their first legitimized exposure to major digital assets.

Managed under the name SBI Alternative Fund GK, the fund has gone live despite Japan’s air-tight regulations set by the Financial Services Agency, which prohibit companies to operate crypto investment trusts. However, it has taken four years of work between SBI and Tokyo’s watchdog to get this crypto fund off the ground

SBI initially planned to launch Greyscale-like cryptocurrency investment trust, which is already a popular investing method in Japan. However, the company was forced to change the course and offer its crypto fund using a vehicle known as an “anonymous partnership ” after the FSA banned companies from selling crypto investments using trusts.

Japan’s biggest online brokerage says it aims to show the public, and Japan’s regulators, that the novel asset class can play a huge role in a well-balanced investment portfolio. SBI hopes to break down the beliefs that all digital assets are highly volatile and unreliable and encourage the FSA to relax their rules.

Japan’s first crypto fund is granting investors the opportunity to expose their portfolios to major digital assets such as Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), Ripple (XRP), and Cardano (ADA).

SBI is also considering launching another fund

With the fund expected to involve a substantial investment in the hundreds of millions, SBI is aimed at customers who understand the risks associated with cryptocurrencies. In addition, there is a minimum investment of about one million yen to five million yen (ranging between $9,00 to $27000).

Effectively, investors in the SBI fund will strike a business contract related to the custodial management of crypto assets. This allows the brokerage to turn around the tough demands of regulators and appear on paper as a custodian, instead of a high-risk capital fund in a volatile market environment.

“If profits are obtained from the operation, the amount after deducting various expenses will be distributed to the customer. However, the distribution of profits is not fixed, and if a loss occurs due to operations, etc., the principal of the investment may be damaged and a loss may be incurred. This product cannot be canceled halfway for one year (February 1, 2022 to January 31, 2023). This product is an investment of 5 million yen or more in units of 1 million yen. For individual investors, the amount equivalent to profits is treated as miscellaneous income, and as a general rule, it is necessary to file a final tax return,” the statement further reads.

SBI is also considering launching another fund specifically tailored to institutional investors if there is enough demand for the product, the company noted in the press release.