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Fund Directors’ Oversight of Investments in Cryptocurrencies and Other Digital Assets  

Author:  Paulita Pike.; David M. Geffen.

Source: Volume 54, Number 17, October 1 2021 , pp.211-215(5)

Review of Securities & Commodities Regulation

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Fund investments in cryptocurrencies and other digital assets present oversight challenges for fund directors. In this article, after noting the absence of tested market infrastructure and of regulation for this new asset class, the authors focus first on technical considerations of blockchain technology and the limited regulatory jurisdiction of the SEC, the CFTC, and federal banking regulators. They then turn to the implications that the absence of infrastructure and regulation has for boards, including oversight of new service providers, and issues surrounding custody, valuation, and liquidity of digital assets. Consequently, their closing thought is that, as digital assets find their way into registered products, boards will need to be more diligent and sophisticated in their scrutiny and oversight of this new asset class.

Keywords: Cryptocurrency Regulation; Regulatory “Pinch Points” for Funds and Directors

Affiliations:  1: Ropes & Gray LLP; 2: Ropes & Gray LLP.

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