Mistrust and scepticism between the cryptocurrency market and traditional banking were inevitable from the outset. Cryptocurrency was created as a low-cost means of transacting on a decentralised platform for anyone who either did not have access to, did not trust, traditional banking routes or wanted an alternative.
Similarly, as an emerging and largely unregulated market, when it comes to digital wealth, it is difficult for traditional banking and investment houses to tick through their anti-money laundering (AML) and compliance procedures to be able to engage with cryptocurrency clients.
As cryptocurrency continues to move away from the fringe and into the forefront, more investors are looking to traditional financial service providers to manage and utilise and protect their assets. A regulated and responsible trustee with proven experience of working with clients with digital wealth can provide an element of comfort and facilitate connections between clients and service providers.
Whether choosing a trustee, custodian, or adviser we encourage cryptocurrency owners to ask as many questions as possible. We expect, and welcome, your questions about our experience, procedures, and knowledge of the market. We understand how important it is for you to be able to trust us with your assets, particularly when cryptocurrency holds unique risks.
When looking for a service provider, we recommend you ask for evidence of the following:
Some service providers may have excellent theoretical experience of working with cryptocurrency clients, but little, or no experience of putting it into practice. It is important that a service provider can supply details of case studies to evidence how they have overcome any challenges and where their expertise lie.
Policies and procedures
Responsible service providers will have drawn up specific rigorous policies and procedures, know the risk points for mitigation and be able to demonstrate good corporate governance and specialised commitment.
It is important to understand whether the service provider is able to do the work in-house, or whether they rely on outsourcing. A trustee will use a network of specialists for services which fall outside their area of expertise but should be a specialist in digital wealth structuring for their clients. A trustee should not rely on intermediaries to bridge gaps in their understanding of administering structures with cryptocurrency or other digital assets.
Cryptocurrency is a unique asset for many reasons, not least being the fact that, if you make a mistake, it is often irreversible. It is important to ask whether your service providers have personal experience of investing their own time and funds in the cryptocurrency market as a base for their understanding of the consequences of poor asset management.
Find out more
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.