CSSF opens the door to crypto exposure in UCIs

On 4 February 2026, the CSSF has taken a major regulatory step by updating its FAQ on Crypto-Assets for UCIs. For the first time, this allows UCITS to obtain indirect exposure to crypto-assets and enables UCIs marketed to retail investors to gain exposure to crypto-assets.

1. UCITS

Exposure

Since 2018, Luxembourg UCITS were strictly prohibited from investing—directly or indirectly—in Bitcoin or any other virtual currency. This restrictive approach was reaffirmed in subsequent publications, including the 2021 Crypto Assets FAQ.

As of 4 February 2026, the CSSF has eased its position, now permitting indirect crypto exposure up to 10% of the UCITS’ NAV, providing several safeguards are met.

Please note that this 10% limit should not be included in the 10% “trash ratio” as defined in Article 41 (2)(a) of the Law of 17 December 2010, but rather as a dedicated investment restriction for this type of assets.

Crypto-assets definition

The FAQ now uses the term “crypto-assets” instead of “virtual assets” to align with MiCAR’s definitions.

Under MiCAR, a crypto-asset is defined as: “A digital representation of a value or right that can be transferred and stored electronically using DLT or similar technology.”

Excluded from this definition, and thus excluded from the 10% indirect exposure limit are:

• Unique and non-fungible crypto-assets, such as digital art and collectibles which are non-eligible investments for a UCITS.
• Crypto-assets qualifying as:
  • Financial instruments
  • Deposits (including structured deposits)
  • Funds (unless e-money tokens)
  • Securitisation positions

CSSF position – Conditions for UCITS exposure

UCITS may now invest indirectly in crypto-assets under strict conditions, including:

• Exposure only through eligible transferable securities without embedded derivatives.
• Indirect exposure capped at 10% of the NAV.
• Prior notification to the CSSF.
• Strengthened governance and internal controls.
• Updated investor disclosures (prospectus, KIIDs/KIDs, marketing materials).
• Enhanced risk management covering volatility, liquidity, and technological risk.

2. AIFs

Exposure

Until 4 February 2026, an AIF could invest directly and indirectly in virtual assets under the condition that its units were marketed exclusively to well-informed investors.

Following the publication of the CSSF FAQ, AIFs open to retail investors may now also invest in crypto-assets, but such exposure is limited to 10% of the fund’s NAV.

For AIFs targeting well-informed investors, higher exposure remains possible, subject to meeting enhanced requirements regarding among others risk governance, valuation, custody and AML analysis, timely transparency and prior CSSF approval of the investment strategy.

Crypto-assets definition

Definition of crypto-assets as given by MICAR without any exception raised by the CSSF.

IFM licence

A Luxembourg authorised IFM (Investment Fund Manager) must obtain prior CSSF authorisation for managing an AIF investing in crypto-assets beyond 10% of the NAV under the “Other-Other Fund-Crypto-assets” strategy.

IFMs do not need the crypto-assets licence if the AIF invests in target funds with underlying crypto-assets, unless the AIF invests more than 20% of NAV in those target funds, in which case a “fund-of-funds” strategy authorisation is required.

The CSSF’s update aligns Luxembourg UCITS practice with the evolving EU framework under MiCAR. While crypto exposure remains strictly limited and indirect, this represents a notable shift from an outright prohibition to a cautiously supervised allowance of up to 10% of the NAV.

For AIFs, the updated framework broadens access to crypto-asset exposure to retail investors with a cap at 10% of the NAV while keeping stricter controls for higher-risk strategies for AIFs marketed to well-informed investors.

Luxembourg funds now have a controlled pathway to participate in the crypto ecosystem — under robust governance and full transparency toward investors.