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Two financial stakeholders in Malaysia have partnered to give citizens access to cryptocurrency, through digital asset exchange-traded funds for BTC, ETH, and blockchain-related companies.
Fund management company Cross Light Capital and Affin Bank, both Malaysian companies, have partnered to launch the country’s first crypto fund. A report from The Edge Malaysia states that the new fund called the Performa Digital Asset Fund will float crypto exchange-traded funds (ETFs) and other exchange-traded products (ETPs).
According to the report, the Performa Digital Asset Fund will provide exposure to Bitcoin (BTC), Ether (ETH), and blockchain-focused companies via invested instruments listed on public markets. Some of the companies users can access include Nasdaq-listed major exchange Coinbase Global Inc. The report also mentioned major video game publisher Ubisoft Entertainment SA. Ubisoft is developing blockchain-powered games and partnered with the Web3 gaming platform Immutable in November.
The Performa Digital Asset Fund reserves a third of its funds in BTC ETPs, another third in ETH ETPs, and the rest in these blockchain-related companies.
First Crypto Fund in Malaysia Is High-Risk
The fund and ETPs will only be accessible through the Affin Invikta suite. Unfortunately, access to the suite will require an invitation. This may be because the fund will cater exclusively to sophisticated and experienced investors since participants must have a high tolerance for risk. Specifically, the Performa Digital Asset Fund anticipates a maximum drawdown of about 30% to 60% in any one-year period. Therefore, investors in the fund are expected to have a long-term investment plan of between five and ten years. This is the fund manager’s estimated period of a full market cycle.
According to Cross Light Capital CEO and Chief Investment Officer Jason Lee, the fund management company is ready to offer clients a “sophisticated investment vehicle” that transcends conventional asset classes.
Affin Bank’s Head of Wealth Management, Calvin Goon Cheng Yu, also commented on the development, highlighting investment diversification:
“By offering access to Cross Light Capital’s digital asset fund, we enable our clients to diversify their portfolios and tap into the potential of the digital economy.”
Investors must deposit a minimum of $1,000 and pay up to 5% for an initial sales charge and 2% in annual management fees. Independent corporate trustee company MTrustee Berhad serves as the fund’s trustee, while Crowe Malaysia PLT is the external auditor. Interactive Brokers LLP will function as the custodian and prime broker.
Crypto in Malaysia
According to a crypto adoption index ranking for 2023, Malaysia had the 38th position of 146 countries. This suggests a healthy level of crypto interest in the country, even though crypto ownership fell from 40% to 30% from Q3 to Q4 last year.
Late last month, Malaysian authorities arrested 10 persons linked to a criminal syndicate that uses digital assets to launder illegal funds. A local report states that the police arrested eight men and two women in multiple raids conducted from May 13 to 21.
According to Inspector-General of Police Tan Sri Razarudin Husain, authorities confiscated vehicles with exclusive registration plates worth $3.8 million (RM 8 million) and 75 branded watches worth $2.1 million (RM10 million). There were also 18 other luxury vehicles, 203 motorcycles, and several other items worth millions of dollars. In addition, the police froze bank accounts holding more than $10.8 million.
