As the cryptocurrency markets continues to grow, methods for “on-ramping” – or investing in cryptocurrency – are becoming easier and more common place. The cryptocurrency market is accessible to anyone with an internet connection and money to invest, but those looking to off-ramp their digital wealth back into traditional markets and banking systems are facing significant obstacles.
There is a misconception that those who have amassed millions, or in some cases billions, in cryptocurrency are freely purchasing property, luxury assets and travelling the world with their digital wealth. The reality is, transferring cryptocurrency into physical (“fiat”) money can be extremely complex, with roadblocks at every turn.
While one of the biggest selling points for many cryptocurrency investors was the anonymity of the market, this is also one of the biggest challenges when looking to move your digital wealth portfolio into the fiat world.
Any regulated financial services provider – including trustees, investment managers and banks – are required to comply with stringent anti-money laundering (AML) and compliance procedures regarding the source of wealth for all their clients. Service providers are prohibited from engaging with clients where their AML obligations cannot be completed. Many banks and investment managers refuse to accept wealth generated from cryptocurrency.
Unless, or until each service provider updates their policies for clients with digital wealth, a trustee can be instrumental in supporting the off-ramp process. A responsible, regulated trustee with experience working with cryptocurrency clients can undertake the necessary source of wealth checks and balances in the first instance to give assurances and comfort to third-party service providers.
With years of experience structuring digital wealth, we have built an extensive global network of specialists who can bridge the gap between the digital and fiat worlds.
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WATCH: Our Crypto Catch-up video series explores the role of a trustee and how their services can play a role in protecting digital assets, and potential barriers that can have an impact on investors.
Contact us for more information on how we can facilitate the off-ramping of your cryptocurrency.