The
Swiss-based digital asset banking group Sygnum has successfully converted its
Yield Core crypto fund into a Luxembourg Reserved Alternative Investment Fund
(RAIF) structure, moving towards institutional-grade crypto investment offerings.
The fund, which manages nearly $30 million in assets, focuses on
yield-generating strategies in cryptocurrency markets.
Sygnum Converts $30
Million Crypto Fund to Luxembourg RAIF Structure
The
transition, approved by 99% of existing investors, enhances the fund’s
governance framework and eliminates counterparty risk through direct asset
ownership. The fund has demonstrated positive performance so far with a Sharpe
ratio of 2.7 over two years.
“This
move not only increases investor protection and convenience but also
strengthens our international distribution,” said Markus Hämmerli, Head of
Liquid Strategies at
Sygnum. “Yield Core’s transition into the Luxembourg RAIF structure is
an important step in our ongoing efforts to provide, amongst others,
best-in-class crypto yield solutions to our growing investor base.”
The fund
employs market-neutral strategies including lending, funding arbitrage, and
liquidity provision in the crypto space. Under the new structure, it
can expand into key markets such as Singapore, targeting professional and
institutional investors seeking diversified yield sources.
The restructuring addresses the growing demand for regulated crypto investment vehicles, particularly from institutional investors looking for alternatives to traditional fixed-income products in the current market environment. Investors
can access the fund through Sygnum Bank or other custodial banks, with plans
for expanded distribution in select jurisdictions.
The growing
interest is confirmed by 2024’s first-half report, in which the company disclosed an increase in assets under management to $4.5 billion and a 500% rise in derivatives
trading volumes.
“As
the authorized AIFM, we are proud to support Sygnum in providing investors with
a secure and regulated pathway into the virtual asset class,” said Stephan
Edelmann, Managing Director of Hauck & Aufhäuser Innovative Capital. “We
have not only extended Luxembourg’s well-established AIF structures to this
innovative field, but we have also created a unique opportunity for investors
to access this emerging asset class with confidence and compliance.”
EU Expansion under MiCA
Last month,
the Zurich- and Singapore-based digital assets banking group announced that it
had secured
a cryptocurrency license in Liechtenstein. This license was awarded to its
local subsidiary, enabling it to offer regulated digital asset services,
including brokerage, custody, and banking.
The
services will operate under Liechtenstein’s Token and Trusted Technology
Service Providers Act. With this license, Sygnum is also positioned to seek a
Crypto-Asset Service Provider (CASP) license under the European Union’s Markets
in Crypto-Assets Regulation (MiCA) once Liechtenstein adopts the regulation,
expected in the first quarter of 2025. The CASP license would allow Sygnum to
expand its services throughout the European Union.
MiCA, a
regulatory framework tailored to the cryptocurrency sector, allows licensed
companies in one country to
operate across all 27 EU member states and European Economic Area countries,
including Liechtenstein. Switzerland, where Sygnum is headquartered, is outside
this regulatory jurisdiction.
This article was written by Damian Chmiel at www.financemagnates.com.
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