On 4 February 2026, Luxembourg made a decisive move. Through an update to its FAQ on Crypto-Assets – Undertakings for Collective Investment[1], the Commission de Surveillance du Secteur Financier (CSSF) confirmed that UCITS may obtain indirect exposure to crypto-assets of up to 10% of their net asset value.
At first glance, this may read like a technical clarification. In reality, it is a strategic signal — one that reshapes how crypto-assets fit into Europe’s most trusted retail investment framework. At Lextrust Law Firm, we assist a diverse range of clients – from crypto-native entrepreneurs to institutional sponsors – in understanding and implementing UCITS legal, operational, and strategic requirements.
From Exclusion To Controlled Access
For years, crypto-assets were effectively off-limits for UCITS. Volatility, custody risks, and regulatory uncertainty were fundamentally at odds with a regime designed to protect retail investors.
The CSSF has not reversed that logic. Instead, it has engineered a controlled gateway.
UCITS remain prohibited from holding crypto-assets directly. Exposure must be indirect, obtained exclusively through transferable securities that:
- do not embed derivatives, and
- fully comply with existing UCITS eligibility rules.
The now-famous 10% cap is therefore not a liberalisation by stealth. It is a hard risk perimeter, deliberately aligned with the UCITS DNA.
Why This Matters
UCITS are not niche products. They are the backbone of European retail investing, used for long-term savings, pension allocations, and discretionary portfolio management across borders.
Allowing even limited crypto exposure within this framework is a qualitative shift. Crypto-assets are no longer treated as an exotic or purely speculative theme. They are acknowledged—under strict conditions—as a portfolio component that can be governed, disclosed, and risk-managed.
Luxembourg Moves First — Again
Luxembourg’s role here is no accident. As Europe’s largest fund domicile, its regulatory positions tend to shape market practice well beyond its borders.
By being the first major jurisdiction to articulate:
- a clear quantitative limit,
- an operationally workable structure, and
- a framework fully aligned with MiCAR,
the CSSF has once again played to Luxembourg’s core strength: regulatory pragmatism.
In a market where uncertainty is often the biggest obstacle to innovation, clarity is a competitive advantage.
Governance Is The Price of Entry
The CSSF’s opening comes with non-negotiable governance expectations.
UCITS managers contemplating crypto exposure must:
- reassess and update their risk management policies,
- ensure robust internal approval processes for new strategies,
- update fund documentation and investor disclosures, and
- inform the CSSF in advance of any intended exposure.
Crypto-assets may enter UCITS portfolios—but only under heightened oversight and institutional discipline. The message is clear: innovation is welcome, complacency is not.
A Signal, Not A Revolution
This is not a green light for crypto-heavy retail funds. Nor is it a redefinition of eligible assets under the UCITS Directive.
It is a signal — to asset managers, distributors, and investors alike — that crypto-assets have reached a level of regulatory maturity that justifies carefully bounded inclusion in mainstream products.
For managers, this opens new structuring options.
For investors, it offers regulated exposure without abandoning UCITS safeguards.
For Luxembourg, it reinforces a long-standing strategy: move early, move carefully, and set the standard.
Conclusion: A Deliberate Strategic Move
The CSSF’s February 2026 position is more than an FAQ update. It is a strategic opening — measured, disciplined, and unmistakably Luxembourg in style.
Once again, the jurisdiction demonstrates that innovation and investor protection are not opposites.
At Lextrust Law Firm, our digital asset and fund structuring teams are ready to assist clients in anticipating and embracing this transformation.
For further information, please contact us to arrange a consultation with:
Jonathan Charles BURGER
Founding Partner
burger@lextrust.lu
[1] FAQ Crypto-Assets – Undertakings for collective investment – Version 7 – 04/02/2026, http://www.cssf.lu
