Local firms help set up of first crypto-currency fund

Tuesday 01 August 2017

Fund administration specialist JTC, law firm Carey Olsen and investment manager Global Advisors Holdings Limited (“Global Advisors”), have partnered to launch what is believed to be the world's first regulated, crypto-denominated fund.

Launched on 23 June, CoinShares Fund I is a self-managed fund which will exclusively receive investment in crypto-currency, namely Ether, a ‘crypto-fuel’ which runs the Ethereum platform.

Cryptocurrencies are a form of digital currency and consist of digital assets used in trade exchanges. Cryptography is used to secure transactions and control the creation of new currency.

The recently launched fund will trade cryptocurrencies and other tokens (or ‘coins’) and will participate in selected Initial Coin Offerings (ICOs). ICOs are the crypto-alternative to crowdfunding or venture capital and represent a form of capital raising increasingly utilised by entrepreneurs in the crypto arena.

The fund will be regulated under Jersey's recently introduced Private Fund Regime.This regime is designed specifically for funds operating with a small number of very sophisticated investors, with the proportionate regulatory environment offering an impressive speed to market. 

Local firm Carey Olsen provided legal advice in establishing the fund with support from Chadbourne & Parke LLP in New York. JTC will provide a range of ongoing services including directors, company secretary, fund administration, fund accounting and investor reporting.

William Byrne, Group General Counsel at JTC, said: "We are delighted to have been selected by Global Advisors as partners to support this unique new fund, which is a genuine first.  Crypto-denominated funds are an exciting new alternative asset class and, as an innovative independent firm, we have worked hard to establish our market-leading credentials in this area.  We are particularly pleased to be providing our new crypto portfolio valuation system, which operates via multiple exchanges, taking live pricing and providing the ability to trade on a T0 basis."

Counsel Chris Griffin, who assisted Carey Olsen's James Mulholland, commented: “It was great to work with Global Advisors on this fund launch against a tight timetable – the fund shows both Carey Olsen’s growing Fintech strength and Jersey regulator’s practical approach to investment funds launching in this pioneering asset class worth US$21billion.”

Jean-Marie Mognetti, Co-Principal of Global Advisors Holdings Limited and Director of the GP, added: “The amount of diligence required to structure this ICO and ‘Alt Coin’ fund, a Private fund capable of investing in this emerging digital asset class, was both complex and ground-breaking. Much credit is due to our legal and fund administration partners who worked diligently to provide the most robust, compliant structure possible based on the current regulatory environment."