21Shares has urged the European Securities and Markets Authority to create a “much-needed clarity” for retail and institutional crypto investors across Europe.

Crypto investment firm 21Shares is pressing the European Securities and Markets Authority to establish clearer guidelines for including crypto assets in Undertakings for Collective Investment in Transferable Securities funds, addressing regulatory inconsistencies across Europe.

In a Monday press release, on Oct. 7, the Zurich-headquartered firm said that the move aims to address regulatory inconsistencies across Europe, which currently lead to confusion for both retail and institutional investors.

While some European countries, such as Germany and Malta, permit UCITS funds to hold crypto, others like Luxembourg and Ireland do not, the firm says, adding that such a fragmented approach creates “confusion, making it difficult for investors to understand and compare their options.”

“The lack of a common approach can lead to gaps in investor protection, as investors have to access the asset through other means, often more expensive and less professionally managed.”

21Shares

The firm has proposed that ESMA introduce clear, consistent guidelines for indirect exposure to crypto across all EU member states, arguing that this would help ensure a “high level of protection for investors,” while enabling broader access to crypto investments.

The proposal comes as ESMA considers feedback from its recent consultation on the inclusion of new asset classes, including crypto, in UCITS funds. While market participants are watching for ESMA’s next steps, the timeline for any potential regulatory changes remains unclear.