Fund administration is paramount for crypto funds, especially given the intricacies and unique challenges of the cryptocurrency landscape. It encompasses critical tasks like NAV calculation, compliance reporting, and investor servicing. Additionally, the importance of API connections, on-chain data tracking, wallet transactions monitoring, and wallet whitelisting cannot be overstated. These technical capabilities not only ensure transparency but also enable real-time insights into fund performance and security. With the fast-evolving nature of the crypto market, a proficient fund administrator provides the expertise needed to navigate this dynamic environment, safeguarding fund integrity, and facilitating sustainable growth.

The selection of an appropriate fund structure for investing in crypto assets depends on the specific investment strategies pursued by digital asset funds. Digital asset funds engage in a variety of investment strategies, including those related to crypto DeFi and Web3. It is essential to tailor the fund structure to align with these strategies.

Commonly used fund structures for crypto asset investments include corporate funds and structures involving Limited Partnerships (LP) and General Partnerships (GP), often referred to as GPLP structures. These structures provide flexibility and adaptability to the fund's investment approach.

In terms of jurisdiction, several popular options are favored by digital asset funds, including the Cayman Islands, the British Virgin Islands (BVI), and structures such as the Singapore Variable Capital Company (SGVCC). These jurisdictions offer regulatory advantages and tax benefits that can be advantageous for crypto-focused funds.

Ultimately, the choice of a fund structure should be made with careful consideration of the fund's specific strategies and objectives. An experienced fund administrator is instrumental in ensuring the efficient operation of the chosen structure, regardless of its complexity or jurisdiction.

To monitor transaction data effectively, we employ a combination of methods, including API integration and on-chain monitoring:

API Integration: We establish connections with the fund's wallet and relevant exchanges through API integration. This allows us to access transaction data in real-time, ensuring that we have up-to-date information on all fund activities.

Read-Only Access: In addition to API integration, we may also utilize read-only access to the fund's wallet. This read-only access allows us to view transaction records without the ability to make any changes or withdrawals, ensuring the security of the wallet.

Automated Reconciliation: We have developed an in-house reconciliation system that automatically reconciles transaction data obtained through API connections and read-only access with blockchain records. This reconciliation process helps identify any discrepancies or anomalies, ensuring the accuracy and integrity of the fund's transaction data.

By utilizing these methods, we can effectively monitor and track fund activities.

Our API setup and maintenance process is designed to ensure secure and accurate data access for our clients:

Initial Setup: Once the fund wallet is established, we initiate the process of acquiring a read-only API key from our clients. This key allows us to access transaction data securely.

Alternative Access: In cases where obtaining an API key is not applicable, we secure read-only online access directly to the designated wallet or account.

Secure Connection: Our in-house system establishes a secure and encrypted connection to the exchange or custodian's API server. This connection ensures the confidentiality and integrity of data transfer.

Data Extraction: Our system routinely extracts data from the API, including transaction records, balances, and other relevant information. This data is promptly stored in our secure and protected database.

Data Processing: We embark on a meticulous data processing process, which includes data cleaning, precise calculations, and automated reconciliation. This ensures that the data we collect is accurate and reliable.

Report Generation: Once the data processing is complete, we generate detailed reports tailored to our clients' specific needs. These reports provide insights into fund activities, performance, and security.

Our systematic approach to API setup and maintenance ensures that our clients have access to accurate and up-to-date information. This process facilitates informed decision-making in the dynamic landscape of fund administration, ultimately enhancing the transparency and efficiency of fund operations.

Yes, we can assist with the process of opening fiat bank accounts for virtual asset funds. Our approach involves the following steps:

Bank Selection: Depending on the fund's structure, licensing status, and specific requirements, we work with a network of crypto-friendly banks and financial institutions worldwide.

Account Opening: We initiate the account opening process and work closely with the selected bank or financial institution to facilitate the necessary arrangements.

Authorized Signatories: We assist in setting up authorized signature arrangements, ensuring that the fund has the appropriate individuals authorized to manage the account.

Timely Communication: We maintain proactive communication with the bank's representatives to control the timeline and expedite the account opening process.

Our goal is to ensure that your fiat accounts are opened in a timely and efficient manner, allowing your virtual asset fund to operate smoothly and effectively while complying with all relevant regulatory requirements.

We work with top-tier industrial players but do not maintain a preferred list of custodians and exchanges. Instead, we provide flexibility for our client funds to make their own decisions regarding which vendors to engage. Operationally, we establish direct contact with the chosen vendors and obtain all necessary data access and information required to support our role as a fund administrator. This approach ensures that our clients have the autonomy to select vendors that align with their specific needs and preferences while maintaining seamless communication and cooperation with those vendors.

Yes, we support subscription in kind as it is a common practice in the crypto space. Our operational processes are designed to accommodate subscription in kind. Additionally, we adopt whitelisting procedures as part of our Anti-Money Laundering (AML) and Know Your Customer (KYC) protocols and risk assessment.

However, it's essential to consult with your legal counsel to ensure that your fund structure is allowed to facilitate subscription in kind. Different jurisdictions may have their own rules and restrictions, so legal guidance is crucial to ensure compliance with local regulations and guidelines.

SAFT stands for "Simple Agreement for Future Tokens." It's a legal document used in the initial stages of a cryptocurrency project's fundraising process. The SAFT contract outlines the terms and conditions of an investment in a project that aims to create and distribute tokens in the future, once the project's platform or blockchain is operational. The SAFT model was developed to address regulatory concerns and provide a framework for fundraising in the cryptocurrency space. It allows investors to fund the development of a project in exchange for the promise of future tokens, which they will receive once the project is completed and the tokens become functional on the platform.

We conduct thorough KYC/AML checks on your investors following international standards, including the following procedures:

Name Screening: We perform name screening to ensure that investors are not on any watchlists or restricted lists related to money laundering, terrorism financing, or other illicit activities.

Risk Assessment: We conduct a risk assessment to determine the level of risk associated with each investor. Enhanced Due Diligence (EDD) measures may be applied if specific conditions are met, such as subscription in kind.

Whitelisting: To fulfill KYC requirements for investors using wallets, we utilize whitelisting procedures to verify the authenticity of the investors' wallet addresses. This helps ensure that the source of funds is legitimate and compliant with AML regulations.

By adopting these rigorous KYC/AML checks and utilizing whitelisting for wallet verification, we enhance the security and compliance of your fund's investor onboarding process, mitigating the risk of financial crime and regulatory violations.

Yes, tracking and monitoring of DeFi (Decentralized Finance) transactions are well within our capabilities. We employ a multi-faceted approach to ensure comprehensive monitoring:

In-House System: Our in-house system interfaces with prominent DeFi platforms via API connections, allowing us to capture and record all relevant DeFi trades conducted under the fund. This data is critical for accurate fund valuation.

Data Extraction: We extract and analyze the data collected from DeFi transactions to ensure accurate and up-to-date fund valuation.

Third-Party Tools: To further enhance our monitoring capabilities, we leverage third-party tools and solutions that specialize in tracking and monitoring DeFi assets within the fund's portfolio.

By utilizing these methods, we maintain a thorough and accurate record of DeFi transactions, enabling precise fund valuation and reporting. This comprehensive approach ensures that DeFi assets within the fund are effectively tracked and monitored, contributing to the overall transparency and compliance of the fund's operations.

We are keen to work with any HKSFC licensee to facilitate their application for VA uplift. Our management team will prepare existing SOPs, background info for our client to complete their application report to the regulator and we also assist with the ongoing Q&A from the regulator.

Yes, we have experience in administering a variety of funds, including those that involve investments in both listed and project tokens. In such cases, the fund's structure needs to support both secondary market strategies and unlisted project-based investments.