Dauds Advisory
Crypto Assets and Crypto Regulation
The emergence of crypto assets in January 2009, shortly after the global financial crisis, is purported to hold a wide range of benefits which include cheaper and faster cross-border payments, increased financial inclusion as well as greater portfolio diversification as a new asset class. At the same time, the value of crypto assets is prone to fluctuating dramatically, displaying significant volatility. In addition to volatility, the crypto market has grown in complexity. Crypto assets have proliferated into more than 10,000 variants since they were first introduced. The dual nature of crypto assets means they may be used as investment assets (a new asset class) or as a means of payment. Regulators see crypto assets as posing risks to macroeconomic and financial stability, financial integrity, market integrity as well as risks to consumer and investor protection. Tax agencies see risks posed by crypto assets in their ability to facilitate tax evasion.
There has been a greater uptake of crypto assets in emerging markets and developing economies (EMDEs) than in advanced economies (AEs). The reasons are varied, one of which is that crypto assets have the potential to lower cross-border transaction costs. Our familiarity with the complexities of crypto assets places us in a prime position to offer our clients advice and guidance on this unique asset type.
What we can do for you
We advise clients on the full range of over-the-counter (OTC) and exchange-traded derivative products. We have expertise ranging from simple swaps, options and forwards to sophisticated hybrid and structured financial instruments involving products such as interest rates, currencies, commodities, securities, and credit. We get involved at the outset of the full life cycle of relevant products — from new product development and assessment to transaction execution and documentation, and on-going legal risk management, including tax and regulatory issues. Whether clients are interested in using derivatives for hedging, investment, the creation of structured products or for arbitrage purposes, we stand ready to help them achieve their business objectives through careful, commercially realistic attention to structuring, documentation, and negotiation. We have the expertise to assist and support commercial and investment banks, hedge funds, investment funds, pension funds, insurance companies and private equity firms. We follow market developments closely and participate in derivatives-industry initiatives by especially the International Swaps and Derivatives Association (ISDA.)