What this is
Establishing a fund that holds or trades virtual assets, and licensing the manager that runs it.
Two permissions, not one
The vehicle and the manager are separate. A fund can be properly established and still have nobody permitted to manage it, which is the most common way this arrives on our desk — usually after the vehicle has been set up somewhere on the strength of a formation agent's advice and before anyone asked what the manager would need.
What decides the jurisdiction
The investors. A fund exists to be invested in, and the operational due diligence its investors run is a harder constraint than the manager's preference about where to sit. Institutional international money has settled expectations about domicile. Regional money often has different ones, and an onshore vehicle can be the easier conversation.
We work backwards from who is actually going to subscribe.
What the work involves
Selecting the vehicle and the jurisdiction against that investor base. The manager's licensing application, and the people and controls it requires. Constitutional documents and the offering memorandum. Then the arrangements a regulator will test hardest on a crypto fund — custody, valuation, and whether the parties performing them are independent enough of the manager.
What we will tell you early
If the vehicle you have already established cannot take the investors you have described. If the manager's permission will take materially longer than the fund's establishment, which affects when you can accept money. If the custody model you intend is one a regulator is unlikely to accept as described.
Where this sits with the rest
Alongside licensing and tax rather than after them. A fund structure that is correct for the regulator and wrong for the tax position is a common and expensive outcome of taking those questions one at a time.
Régulateurs
Questions fréquentes
Cayman or ADGM for a crypto fund?
The investor base decides it, not the manager's preference. Cayman where the investors are institutional and international, because that is what their operational due diligence expects. ADGM where they are regional and the manager wants the vehicle and the licence in one jurisdiction.
Do I need a licence to manage my own fund?
Usually yes, and it is a separate application from the fund itself. Managing a collective investment vehicle is a regulated activity in its own right; establishing the vehicle does not carry permission to run it.
Can the fund self-custody its assets?
That is a question the regulator will ask early and will expect a specific answer to. Custody arrangements, valuation policy and the independence of the parties doing both are usually where a fund application slows down.
Sources
- ADGM FSRA and DIFC DFSA fund and fund manager regimes — Categories, thresholds and permitted investor classes to be confirmed against each regulator's current rulebook before reliance
- Scope of work described here reflects our practice, not a regulatory requirement — Regulatory statements on these pages carry the same review status as elsewhere on the site