Partner Caroline Heal and associate Tom Hagger, discuss cyrptocurrency funds and its impact on the Cayman Islands in the Cayman Finance jurisdictional magazine, Cayman Islands: The Premier Global Financial Hub, Issue 5.
High volatility potentially makes cryptocurrencies a promising opportunity for alternative investment funds. Institutional investors are actively pursuing these opportunities and are leveraging their experience in traditional asset classes to seek to minimise the risks associated with investing in cryptocurrencies. As the most popular offshore jurisdiction for alternative investment funds, the Cayman Islands has already experienced significant activity in this space and is well positioned to see this increase.
The Cayman Islands must ensure it protects its reputation as the pre-eminent offshore jurisdiction for investment funds by developing laws, rules and regulations which encourage the establishment of cryptocurrency funds in the Cayman Islands without undermining the jurisdiction’s well-earned reputation. There are also some key risks associated with cryptocurrency funds that are being navigated by service providers in order to take advantage of the opportunity presented by this relatively new asset class.
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This article was first published by Cayman Finance.