As you probably know, I believe we’re at the ground floor when it comes to cryptocurrencies. After the boom of 2017, we’ve seen many traders that want to create their own cryptocurrency investment fund.
There’s a good reason for this – cryptocurrencies (and the Blockchain technology they are built on) are here to stay.
What’s more, backing a cryptocurrency with mass utility potential will likely provide an incredible return for investor clients.
We’ve also seen financial institutions start to take cryptocurrencies more seriously.
The latest example of this comes from Hong Kong, where the Securities and Futures Commission has announced plans to regulate cryptocurrency exchanges and cryptocurrency portfolio managers.
Currently, cryptocurrency are unregulated – but the SFC wants to test existing regulations it has in place for digital trading products with cryptocurrencies. The SFC call this a regulatory ‘sandbox’.
It’s not the first time we’ve seen a regulator intervene this year. For instance, Japan’s Financial Services Agency has already determined that alternative coin exchanges fall under its jurisdiction.
But what does this mean for you as a potential investment fund manager?
Quite simply, it means you need to work with a fund administrator that understands the constantly evolving landscape of cryptocurrency regulation. The landscape is changing quickly – and it’s critical that your fund administrator is up to speed.
It’s likely we’ll see more intervention from regulators in the coming years.
The impact of this regulation is hard to forecast – but it’s probable that more regulation will reduce the volatility of cryptocurrencies.
It’s why getting in at this ‘ground floor’ is critical. If you’re ready to create a cryptocurrency investment fund we should talk. Just email me and I’d be happy to arrange a call with you.