For US digital assets fund managers that want to trade on offshore cryptocurrency derivative exchanges, a significant challenge is that such exchanges are often limited to non-US persons or “eligible contract participants” (ECPs) to avoid US commodities regulations....
Blog
Private Lending Funds: When is a note a security?
With significant growth in the hard money lending industry in recent years, many sponsors of private lending funds have requested guidance regarding whether the underlying loans and other debt instruments in such funds are considered “securities” under the Securities...
Qualified Opportunity Zones Update
On April 17, 2019, the IRS and the Treasury Department released proposed regulations (“Proposed Regulations”) regarding new tax incentives for investments in qualified opportunity zones (“QOZs”) and qualified opportunity funds (“QOFs”). The Proposed Regulations build...
ICOs: Non-US Persons and Investor Eligibility Considerations
As blockchain continues to evolve as a disruptive technology, the regulatory environment surrounding initial coin offerings (ICOs) by companies issuing digital tokens to investors remains uncertain and subject to much debate. As a result, many companies issuing ICOs...
US Treasury Report: Potential Implications for Private Placements, Exempt Offerings and Finders
The U.S. Department of the Treasury released a report this month outlining issues and recommendations in U.S. Capital Markets that the Treasury hopes will promote economic growth while maintaining investor protection. The Treasury report discussed measures that may...
SEC Cyber Unit: Impact on Initial Coin Offerings and Cryptocurrency Fund Managers
In July, we discussed the SEC’s assertion that an Initial Coin Offering (ICO) could constitute a securities offering, subject to the SEC’s jurisdiction and compliance with federal and state securities law. Last week, the SEC issued a press release announcing its...
SEC Risk Alert: Advertising Compliance Issues for Investment Advisers
The SEC’s Office of Compliance Inspections and Examinations (“OCIE”) recently issued a risk alert concerning compliance issues with Rule 206(4)-1) of the Investment Advisers Act of 1940 (the “Advertising Rule”). The Advertising Rule is frequently a point of emphasis...
Starting a Cryptocurrency Fund: Digital Asset Storage Methods
Given the rise of cryptocurrency hedge funds and other investment products, Bitcoin and cryptocurrency fund managers are having to make decisions regarding optimal storage methods to suit their particular needs when holding and trading cryptocurrencies and other...
Starting a Cryptocurrency Fund: Valuation Considerations
It is critical for fund managers and accounting professionals to have up-to-date valuations on investments when accepting capital contributions from new and existing investors. While valuation metrics for the broad majority of securities and futures products are...
DOL Fiduciary Rule: Impact on Hedge Fund Managers
Background On June 9, 2017, the Department of Labor (“DOL”) effected a new regulation expanding the definition of a “fiduciary” under the Employee Retirement Income Security Act of 1974 (“ERISA”) and Section 4975 of the Internal Revenue Code of 1986 (“Code”) (the...
