As the global cryptocurrency market soared in late 2024, some investors say they were left behind due to a series of communication failures surrounding the termination of 3iQ’s Global Cryptoasset Fund (QGCF). The fund, managed by Toronto-based 3iQ, officially closed its doors in November, but many investors were caught off guard by the sudden liquidation, missing out on substantial returns as the crypto market surged.
Communication Breakdown Leads to Losses
Garrett Atkinson, a long-time investor in 3iQ’s funds, claims that he never received crucial information about the fund’s termination in time to act. “I updated my email address with the portfolio manager in 2022, yet the termination notice was sent to an old address,” Atkinson told The Globe. When he learned of the fund’s closure on October 24 through another account holder, Atkinson immediately contacted 3iQ with instructions to move 75% of his funds into the Bitcoin ETF and the remainder into the Ether Staking ETF.
Despite multiple follow-up emails between October 29 and November 13, Atkinson claims that no one at 3iQ informed him that the fund had already moved its assets out of digital currencies and into cash. As a result, his investments sat idle while Bitcoin and Ether prices surged.
“I missed out on nearly 50% in returns,” Atkinson said. Between October 24 and November 19, Bitcoin prices rose approximately 39%, while Ether increased by 28%. Atkinson’s funds, however, remained stagnant during this period, with the fund’s value locked at $42 per unit until the final transfer.
A Lack of Transparency
Investors were particularly frustrated by the lack of clarity regarding the fund’s asset allocation. As late as November 11, the 3iQ website still showed QGCF’s portfolio as heavily invested in digital currencies like Bitcoin, Ether, and Solana. However, Bloomberg data indicates that by October 7, QGCF had already liquidated its digital asset holdings and moved into cash.
3iQ’s failure to communicate this change directly to investors has drawn criticism. “Until November 11, the company’s website showed a digital asset allocation, so I assumed my exposure to Bitcoin was intact,” Atkinson said. “The delay in transferring my funds cost me thousands.”
Legal Concerns and Family Allegations
The situation has sparked a formal complaint to the Ontario Securities Commission (OSC) from Howard Atkinson, Garrett’s father and former chair of 3iQ. Howard alleges that 3iQ violated its own investment objectives and failed to properly update client accounts. He further claims that the fund manager did not follow proper procedures in terms of client communication, particularly concerning the requirement to provide a minimum of 30 days’ notice before terminating the fund.
“None of our family members were ever contacted by 3iQ or its portfolio manager to update know-your-client forms, review investment objectives, or obtain the most recent contact details,” Howard Atkinson stated.
Despite the lack of communication, 3iQ has defended its actions. In a statement, the company emphasized that it followed “the necessary protocols for fund closure, including liquidating the fund’s holdings, notifying unitholders, and consulting with legal and compliance experts.” According to 3iQ, unitholders were given the option to redeem or transfer their assets, with regular communication provided throughout the process.
“We conducted the fund closure transparently and in compliance with our legal obligations,” said a spokesperson from 3iQ.
A Market Missed
While some investors are grappling with missed opportunities, the larger issue remains the timing of the liquidation during a volatile period for digital assets. With Bitcoin prices soaring by 43% from early October to mid-November, many investors feel they were unfairly deprived of the potential returns.
3iQ’s decision to liquidate QGCF earlier than anticipated has cast a shadow over the firm’s handling of its fund closure. For investors like Garrett Atkinson, the financial losses are not just about missed gains—they are about trust and transparency. The case serves as a reminder of the risks and uncertainties involved in investing, especially when communication fails to meet expectations.
