The Key Challenges In Digital Assets: What Is Keeping Leaders Up At Night?

Key takeaways

• Institutional clients prioritise scale, credibility and compliance in the digital assets sector.
  
  
• Distribution challenges and strict marketing restrictions remain as significant hurdles for businesses.
  
  
• Reputation and credibility are central to the decision-making of institutional clients and investors.

Institutional clients are entering the digital assets sector with sharper expectations and tougher questions.

Today's clients are focused on scale, credibility and compliance - and they expect their advisors to help deliver all three. Here are some of the focuses and concerns that our global fintech team have noticed among their institutional clients.

Distribution

A key challenge emerging across markets is distribution. Clients are building innovative tokenised products, from funds backed by US Treasuries and equities to alternative assets like gold and even fine wine.
But manufacturing the product is the easy part - getting it into investors' hands is the hard bit. Strict marketing restrictions in the US and Europe are forcing clients to rethink how they achieve investor reach at scale, regardless of where the product is domiciled.

Compliance is king

At the same time, clients are grappling with an escalating compliance burden, particularly around anti-money laundering, sanctions and cross-border standards like MiCA.

Increasingly, institutional clients have regulated entities within their group structures and this has changed the paradigm of a largely unregulated market. Being able to demonstrate regulatory oversight from public sources is increasingly seen as one of the hallmarks of a truly institutional offering.

Naturally though, regulatory oversight comes with associated obligations which can be perceived as creating competitive disadvantage, and this underscores the complexity of compliance in an industry where regulation is evolving unevenly across jurisdictions.

Security risks

Another priority keeping clients up at night is security: both virtual and physical. The risks extend far beyond cyberattacks. Custody isn't just a technical issue anymore - it's a real-world one.

Stories of crypto-related kidnappings, ransom demands and extortion are no longer rare headlines but growing concerns, especially for clients managing large crypto treasuries.

Reputation matters

Meanwhile, reputation is emerging as a critical factor in decision-making. Institutional clients are increasingly choosing jurisdictions with clear, credible regulatory frameworks and distancing themselves from ambiguity or risk.

The collapse of FTX marked a turning point: clients now understand that regulatory credibility is inseparable from commercial viability. As we mentioned above, compliance is king. If the jurisdiction isn't right, they'll move somewhere else.

Acting quickly

While compliance dominates the agenda, institutional clients are also motivated by positioning themselves. For some, being a first mover matters as much as commercial returns. Our fintech team describes it as a 'badge of honour'. Clients see the long-term value of being active in the space, even if their commercial ambitions are still evolving.

Across the board, one thing is clear: institutional players aren't just looking for simple transactional advice. They want strategic partners who can connect the dots globally so they can scale, stay compliant and protect their assets in an increasingly high-stakes environment.

Want the full picture? Access our complete fintech white paper, 'Digital assets in the post-boom world: Building infrastructure, not hype' for expert analysis and practical guidance on navigating today's evolving digital asset environment.