Bitcoin and other cryptocurrencies (such as Ethereum) are virtual, digital assets that have no government or central bank backing. They are based in encrypted, decentralized blockchain technology as well as some other new competing technologies.
As Bitcoin and other cryptocurrencies have experienced a surge in popularity and valuation over the past few years, active exchange markets have been established around the globe, derivatives and structured products based on cryptocurrencies are being introduced and new private funds investing in cryptocurrencies and such derivatives have been founded. As the regulatory environment surrounding this area continues to rapidly evolve, we have assisted investment fund managers with all aspects of the fund launch process, from pre-launch structuring to post-launch compliance and regulatory matters.
In addition to our routine fund services outlined here, our Bitcoin and cryptocurrency fund services typically include:
- Preparation of customized offering documents which are blockchain technology savvy and address the unique legal and regulatory issues inherent to blockchain technology / cryptocurrency / virtual assets funds, including whether the underlying investments in existing cryptocurrencies and initial coin offerings (“ICOs”) are considered “securities” under federal and state law.
- Working with fund managers to accurately describe cryptocurrency and virtual assets investment strategies and instruments traded.
- Providing fund managers with ongoing updates and support regarding the latest regulatory developments, including relevant releases by the Securities and Exchange Commission (“SEC”) and the Commodity Futures and Trading Commission (“CFTC”) and other regulatory bodies regarding their respective authority to regulate existing cryptocurrencies, ICOs and/or cryptocurrency derivatives.
- Assisting fund managers in sourcing administrative, brokerage, and audit service providers with experience in cryptocurrency.
In addition to working with cryptocurrency funds, we also work with entrepreneurs on various blockchain technology related businesses and initiatives to help them capitalize on opportunities and meet the challenges of this rapidly evolving industry.