There are as many challenges as there are opportunities facing financial institutions, businesses, investors and start-ups in the digital/virtual asset and cryptocurrency sectors. Governments and regulators around the world are tasked with providing regulatory certainty and consumer protection against the risks and turbulence typically experienced by the sector, but struggle to agree on a global approach to the use of the underlying technology and how services and value arise from it should be processed, regulated and taxed.
Some of the most progressive and comprehensive legal and regulatory regimes aimed at providing security and reducing the risk of fraud, money laundering and terrorist financing in the sector have been developed offshore in the international financial centers that have the sophistication and experience to understand risks and the ambition and agility to act quickly and keep pace with the legal ramifications of such technological advances, especially in relation to defi, NFT and DAO.
Carey Olsen has been at the forefront of developments in the digital/virtual asset and cryptocurrency sectors, advising on the launch of the world’s first Bitcoin mutual fund and the first Ethereum-denominated fund, as well as many of the most ground-breaking initial coin offerings (ICOs) structured offshore. We have been involved in the creation of sector-specific legislation and regulation in a number of jurisdictions where clients have obtained licenses from or been registered with recognized regulators to perform digital/virtual asset business services. Our commitment to helping develop these laws and regulations and our involvement in these transactions and applications across multiple jurisdictions provides a unique insight into how some governments and regulators are finding ways to provide safety, security and credibility in the sector, while others still struggling to define the problem.
The content of this article is intended to provide a general guide to the subject. You should seek specialist advice about your specific circumstances.
