There are as many challenges as there are opportunities facing financial institutions, businesses, investors and start-ups involved in the digital/virtual asset and cryptocurrency sectors. Governments and regulators around the world are being tasked with providing regulatory certainty and consumer protection against the risks and turmoil commonly experienced by the sector yet struggle to agree on a global approach to the use of the underlying technology and how services and value arising from it should be treated, regulated and taxed.
Some of the most progressive and comprehensive legal and regulatory regimes aimed at providing certainty and a reduction in the risk of fraud, money laundering and terrorist financing in the sector have been developed offshore in the international financial centres that have the sophistication and experience to understand the risks and the ambition and agility to act quickly and keep up with the legal impact of such technological advancements, particularly in relation to defi, NFTs and DAOs.
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 investment fund and the first Ethereum denominated fund, as well as many of the most pioneering initial coin offerings (ICOs) structured offshore. We have been involved in the creation of sector specific legislation and regulation in numerous jurisdictions where clients have obtained licenses from or been registered with recognised regulators to conduct digital/virtual asset business services. Our commitment to assisting 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 security, certainty and credibility in the sector whilst others are still struggling to define the problem.