KordaMentha appointed as crypto EFT Cosmos Asset Management enters administration

Cosmos Asset Management, which launched the nation’s first cryptocurrency ETF and attracted high-profile backers, has collapsed into administration.

Bitcoin prices have fallen over the year, with the recent collapse of FTX adding to investor concerns.

Cosmos Asset Management, which was behind the listing of Australia’s first cryptocurrency ETFs earlier this year, has been placed in administration and its website has been shut down.

The company, headed by former Betashares and Blackrock executive Dan Annan Jr, announced in early November it would apply to delist its three locally-listed ETFs, which only debuted in May, after poor investor interest.

The company has now been placed in administration, with KordaMentha appointed to manage its affairs.

The firm said yesterday it was “currently assessing the financial position of the company’’ and would provide an update at the first creditors’ meeting, to be held on December 6.

Cosmos has some high-profile backers, with Nasdaq-listed Mawson Infrastructure Group its largest shareholder and Canada’s Purpose Investments its second-largest.

Locally, private investment firm Marshall Investments, headed by John and David Marshall and which counts Ramsay Healthcare director Karen Penrose on its board, is a shareholder, as are Josh Best’s Alua Group and Darron Wolter’s W Capital Advisors. Mr Anna Jr is also a shareholder.

Cosmos launched its first bitcoin ETF on May 12, with the Cosmos Purpose Bitcoin Access ETF trading about $454,000 on its first day.

The launch was ill-timed, with the value of Bitcoin having dropped 30 per cent in the preceding seven days to less than $US28,000.

The value of the cryptocurrency has continued to fall over the intervening six months, and is now trading at $US16,429, with the multi-billion dollar failure of cryptocurrency exchange FTX weighing on the volatile asset class.

Cosmos’s Australian-listed crypto ETFs were not well supported by market participants, with brokers such as nabtrade refusing to offer them, although CommSec, CMC Markets and Superhero did support trading.

The imposition by ASX Clear of significant margin requirements for participants - 40 per cent on bitcoin ETFs, and 50 per cent on ethereum ETFs - was thought to have kept some on the sidelines.

Despite the lower-than-expected volumes on the launch day, Mr Annan said at the time he was “happy with how the product traded”.

“There is no doubt that some investors pondered and are cautious with the current market volatility; however, investors with a long-term view on exposure to bitcoin and cryptocurrency will understand that this is a good opportunity for an entry point, and therefore, we hope to see an increase in volumes in the days ahead,” he said.

In early November Cosmos said it was delisting all three of its listed products, which covered bitcoin and ethereum, and a third focused on bitcoin miners.

According to its website at the time, the bitcoin ETF held roughly $890,000 in assets under management as of October 31.

Its ethereum product attracted $270,000 while the digital mining ETF, launched in September 2021, had a volume of $700,000.

The website has now been shut down entirely.