There are currently over 1500 crypto currencies issued globally with a total (albeit widely fluctuating) market capitalization of US$500bn+ and more popping up each day. It's no surprise that global regulators have been working hard to determine appropriate crypto currency regulations. The recent and rapid surge in the crypto currency market means that the industry has only just begun to set out to find appropriate resolutions. DMS, the worldwide leader in Fund Governance + Risk + Compliance is leading the way with the creation of its Digital Assets Working Group.
The working group is the innovation of DMS Director John D'Agostino and was formed in early 2017 when John and Paras Malde, Director in our Cayman office, noticed a lack of coordination of best practices surrounding digital assets. They are both seeing a growing interest in the working group from many funds investing in these types of assets.
John comments: "While many service providers across all areas including admin, legal, audit, custody were doing fantastic work in this space, we noticed that few of them were communicating these innovations to one another. In an undefined regulatory environment we felt this created significant risk factors."
As fiduciaries, DMS Directors are well positioned to coordinate these best practices with the aim of ensuring investor protec¬tion, helping managers stay in line with regulators whilst attracting capital as the asset class matures.
The working group, which has grown to comprise over 70 companies and 300 participants, aims to encourage thought leadership across the industry and share innovations with market participants and regulators to create a feedback loop that encourages the institutionalization of digital assets as an investment class.
John comments: "The group is constantly adding to its numbers from both within the industry (exchanges, technology services providers, investment managers, investors) and amongst the financial service provider community. The growth in membership recently prompted us to initiate some new developments such as our online blog space which allows members to keep up to speed on the latest industry developments while also encouraging cross-industry collaboration."
The rise of the crypto currency has certainly presented regulators with a huge challenge. As the worldwide leader in fund governance, DMS sees the sharing of best practices and industry collaboration as positive first steps in the right direction. John and Paras would be delighted to speak with you on this topic in more detail and indeed with regards to your crypto currency fund governance needs.