The week’s developments in the crypto currencies world including Nasdaq Lists New Decentralized Finance Index

Billionaire Alan Howard Eyes $1 Billion Crypto Fund Management Venture

Elwood Asset Management, owned by Brevan Howard founder Alan Howard, is planning a $1 billion venture into the crypto hedge fund space. The Financial Times (FT) reported on Aug. 30 that the asset manager is developing a platform that would tailor portfolios of cryptocurrency funds for institutional investors. While details of the product remain to be finalized, the new fund could enable investors to determine input factors such as the level of risk they are willing to court, their expectations of returns, as well as liquidity terms. It will also measure the potential correlation of the tailored crypto hedge fund portfolio with the rest of their existing assets. For its services, Elwood will apply its own fee on top of the fees that investors pay to access the underlying funds. This March, Elwood had indicated it was planning to increase its cryptocurrency offerings as it announced the launch of a blockchain exchange-traded fund in partnership with Invesco.

Source: “Billionaire Alan Howard Eyes $1 Billion Crypto Fund Management Venture”, available at https://cointelegraph.com/news/billionaire-alan-howard-eyes-1-billion-crypto-fund-management-venture

PwC Predicts 100% of Insurance Companies to Use Blockchain by 2021

A recent survey from PwC claims that of the insurance companies interviewed, 100% of them intend to integrate Blockchain technology in some shape or form by 2021, and 81% are already familiar with the technology. The report found that a large swath of the ecosystem has yet to assimilate blockchain and , therefore, challenges persist regarding how to best approach technical and functional governance, and above all, how to determine the right use cases. The report also noted the benefits to be gained by insurers by pooling data to facilitate reinsurance processes and how ICOs offer and insurers genuine flexibility when it comes to raising capital, hiring talent and forming captive bases of future users of the insurance products.

Source: “Blockchain, a catalyst for new approaches in insurance: Part 2 Market launches and changes in 2019”, available at https://www.pwc.com/gx/en/industries/financial-services/publications/blockchain-a-catalyst-part-two.html

Winklevoss’ Gemini Crypto Exchange Launches Custody Service

The New York-based cryptocurrency exchange Gemini, founded in 2014 by twin brothers Cameron and Tyler Winklevoss, has launched its own custody service, Gemini Custody. In a press release shared with Cointelegraph on Sept. 10, Gemini states that the newly launched custody solution will allow its customers to check balances, download account statements, initiate withdrawals, and grant auditors view-only access to confirm balances, transactions and activity. Customers will also be able to trade their assets in custody on the Gemini exchange without waiting for them to be transferred from cold storage. Gemini Custody reportedly supports 18 cryptocurrencies including Bitcoin (BTC) and Ether (ETH) as well as the certain ERC-20 tokens. Jeanine Hightower-Sellitto, managing director of operations at Gemini explained that institutional investors have demonstrated a clear and growing demand for crypto, but that some struggle to find a solution that fully meets complex regulatory and security requirements.

Source: “Winklevoss’ Gemini Crypto Exchange Launches Custody Service”, available at https://cointelegraph.com/news/winklevoss-gemini-crypto-exchange-launches-custody-service/

Nasdaq Lists New Decentralized Finance Index

Nasdaq has added a new index that aims to offer the markets information on blockchain projects working in the decentralized finance (DeFi) space. Called Defix, the index was launched by the London-based Exante brokerage – an early mover in the crypto industry that launched a bitcoin fund in 2012. Offered as a means for investors and traders to track “popular” defi-focused blockchain tokens, Defix lists projects including MakerDao, Augur, Gnosis, Numerai, 0x and Amoveo. The index is listed by NASDAQ under the ticker DEFX. The news marks the latest index to be added by Nasdaq to inform its users. This year so far, the U.S. stock exchange has added dedicated indices for bitcoin, ether and XRP, as well as a wider crypto reference index from CryptoCompare.

Source: “Nasdaq lists new decentralized finance index”, available at https://www.coindesk.com/nasdaq-lists-new-decentralized-finance-index-including-makerdao-0x-augur

Libra Will Have to Meet Tough U.S. Standards

The Facebook-led Libra cryptocurrency project must meet the highest standards for combatting money laundering and terrorism financing if it is to get off the ground, said a senior US Treasury official. Any cryptocurrency project, including Libra, will have to satisfy US regulatory standards. The official plans to meet with the Swiss regulator FINMA to discuss proper anti-money laundering safeguards as well as enforcement actions against companies who do not comply. Digital currencies such as Libra raise concerns about money laundering and terrorism financing and therefore must be regulated in order to not distrupt the world’s financial system.

(Source: “Swiss-based Libra will have to meet tough U.S. Standards: U.S. Treasury”, available at https://ca.reuters.com/article/technologyNews/idCAKCN1VV1BT-OCATC

Claire Cummings

Claire practises financial services law with a focus on regulatory issues, cryptocurrencies and tokens, trading and brokerage documentation and advising both existing and start-up funds and fund managers.

If you would like to discuss any of the points we raise, please contact me or one of our other lawyers.

Phone: 0207 585 1406
Email: claire.cummings@cummingsfisher.com

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