Cryptocurrency Funds
Practice Areas > Cryptocurrency Funds
Bitcoin and other cryptocurrency hedge funds have emerged as a unique alternative investment asset class over the past few years. Due to the rapidly evolving regulatory environment surrounding Bitcoin and other cryptocurrency hedge funds, it is essential for issuers in the space to engage qualified legal counsel to assist with fund launches. We assist cryptocurrency fund managers with all aspects of the fund launch process, from pre-launch structuring to post-launch regulatory matters. Our Bitcoin and cryptocurrency fund legal services include:
- Advising managers regarding overall fund structure, including manager compensation, custodial matters, liquidity terms, appropriate risk disclosures, etc.
- Addressing the unique legal and regulatory issues inherent to cryptocurrency and digital assets funds, including whether the underlying investments in existing cryptocurrencies and initial coin offerings (ICOs) are considered “securities” under federal and state law
- Working with managers to accurately describe cryptocurrency and digital assets investment strategies and instruments traded
- Updating managers regarding the latest regulatory developments, including relevant releases by the Securities and Exchange Commission (SEC) and the Commodity Futures and Trading Commission (CFTC) regarding their respective authority to regulate existing cryptocurrencies, ICOs and / or cryptocurrency derivatives
- Preparing customized fund offering documents, including a private placement memorandum, a limited partnership agreement / operating agreement and subscription documents for individual and institutional investors
- Structuring the management company that will serve as the fund manager and drafting the company’s operating agreement
- Helping the manager navigate its initial compliance obligations, including registering the manager as an investment adviser / exempt reporting adviser at the federal and state levels
- Preparing required regulatory filings on behalf of the manager and the fund, including entity formation filings, SEC Form D filings and state “blue sky” notices
- Assisting with selecting and negotiating agreements with other service providers for hedge funds, including third-party administrators, auditors, brokers and custodians
- Drafting investor side letter agreements, seed capital arrangements and other investor negotiations
- Advising managers regarding the use of broker-dealers and finders in connection with capital raising and negotiating third-party marketing agreements
- Handling ongoing compliance and regulatory matters, including preparing and filing Form D annual amendments, “blue sky” renewal filings, and Form ADV annual updating amendments, as well as reviewing and updating the fund’s offering documents to address recent changes to rules and regulations at the federal and state levels
If you have any questions regarding Bitcoin and other cryptocurrency hedge fund formation services or would like to schedule a free consultation, please do not hesitate to contact us.
