Crypto funds in Luxembourg

The choice of structure decides who may invest and how much of the fund may go into crypto-assets. The limits below come from the CSSF FAQ on crypto-assets in investment funds, version 8. Securities that qualify as financial instruments, such as shares of crypto companies, fall outside these limits.

A UCITS that plans crypto exposure has to inform the CSSF in advance. A retail fund under Part II is an alternative investment fund, so it may buy crypto-assets directly, but only up to 10 percent of its net asset value.

A Luxembourg manager that runs an alternative investment fund with more than 10 percent of its NAV in crypto-assets needs prior CSSF authorization for the strategy "Other-Other Fund-Crypto-assets". The application contains an updated risk management policy, a valuation policy for the crypto-assets, the crypto experience of the portfolio manager and a description of how the depositary organizes custody. The initiator of the fund presents the project to the CSSF beforehand, and the CSSF looks closely at who has access to the cryptographic keys.

A fund that holds crypto-assets only through target funds needs no crypto license for its manager. The manager still has to assess whether each target fund manager can handle crypto risks, including custody and the transfer agent. For anti-money-laundering checks, the manager scores each crypto investment for risk and traces where the coins come from and where they go.

A Luxembourg depositary bank may act for a fund that invests directly in crypto-assets and notifies the CSSF before it takes the mandate. If the depositary does not offer crypto custody under MiCA, the fund or its manager signs a direct contract with a licensed crypto-asset service provider, which then carries the liability for returning the assets. A depositary that keeps the keys itself needs a MiCA license for custody, or a notification as a bank, and records the crypto-assets off its balance sheet as client assets.

The RAIF was introduced by the law of 23 July 2016 and is a fund for well-informed investors without product approval by the CSSF. An authorized alternative investment fund manager from Luxembourg or another EU country manages it and answers to its own supervisor. A RAIF appoints a depositary in Luxembourg, can launch without waiting for a regulator and can take the form of a SICAV, a SICAF or a contractual FCP.

A SIF and a RAIF accept the same investors and can hold the same assets, so the difference lies in supervision. The CSSF approves a SIF and its documents before launch and supervises the fund itself, while a RAIF is supervised only through its manager. A SIF can also be run by a smaller registered manager below the AIFMD thresholds, and a RAIF always needs a fully authorized AIFM.

Well-informed investors are institutional and professional investors, plus other investors who confirm their status in writing and invest at least EUR 100,000. A law of 21 July 2023 lowered that amount from EUR 125,000, and an investor below it can qualify through an assessment by a bank or an investment firm.

The CSSF supervises UCITS, Part II funds, SIFs, fund managers and depositaries, and it is also the competent authority for crypto-asset service providers under MiCA. Its statistics counted 13,268 fund units at the end of June 2026, sub-funds of umbrella funds included. Fund companies in Luxembourg are organized in the industry association ALFI, which speaks for the fund sector toward the CSSF and the government.