Constituent of Arxnovum DeFi Index Fund to be removed
Late last month the Securities and Exchange Commission (SEC) declared that AMP, along with 8 other crypto tokens, were potentially a security instead of a crypto asset. AMP has been a constituent in the Arxnovum DeFi Index Fund since its inception.
In a 62 page complaint the SEC states that “a digital token or crypto asset is a crypto asset security if it meets the definition of a security, which the Securities Act defines to include “investment contract,” i.e., if it constitutes an investment of money, in a common enterprise, with a reasonable expectation of profit derived from the efforts of others.”
The complaint then goes on to outline how AMP, or its predecessor Flexacoin, meets the definition of a security. See pages 23-28 or the complaint for a complete review of the SEC’s position.
As a result of the SEC complaint, prominent crypto exchange Binance.US has announced on Monday that they will be delisting AMP from its platform. Of those nine tokens, only Amp (AMP) is listed on the Binance.US platform.
Arxnovum Investments is an investment manager that is dedicated to bringing you the best of the digital asset investing aligned with responsible regulatory oversight. The construction of all of our investment strategies includes well defined rules to either exclude constituents from the initial screen or remove constituents that are included in the index if there exists Regulatory or legal actions that cast doubt as to whether the asset in question is indeed a crypto asset.
Thus, we take the SEC’s allegations about AMP seriously and have elected to remove the constituent from the Fund. The active decision to remove AMP and its 4.03% weight (as at August 3, 2022) from the Arxnovum DeFi Index Fund in advance of the removal from the underlying Index means that the fund will have a small amount of tracking error. We expect the CF Benchmarks to make an announcement on the status of AMP in the index in the coming weeks.
Please contact us if you have any questions or would like to discuss further.
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