A recent report by PwC and Elwood Asset Management on the global landscape of crypto hedge funds has shown that their managers choose Gibraltar, as well as the United States and Great Britain, as the best jurisdictions for their offices.
Gibraltar, which also ranks fourth in terms of the number of crypto hedge funds in the country, is a preferred choice over many other major financial hubs, such as Singapore, Malta, Hong Kong, Switzerland and the Netherlands.
In the rest of the world, the total Asset Under Management (AUM) of crypto hedge funds has doubled over the past year to $2 billion, with the proportion of AUM funds increasing from 19% to 35% during 2019.
The average AUM also increased from $21.9 million to $44 million, while the median increased from $4.3 million to $8.2 million.
The report uses data collected in the first quarter of 2020 and provides an overview of the global crypto hedge fund market, examining both quantitative indicators, such as liquidity, and qualitative indicators, such as best custody and governance practices.
PwC Gibraltar Director Luke Walsh commented:
“The PwC Crypto Hedge Fund Report provides an overview of the global crypto hedge fund landscape and offers insights into the industry. Gibraltar’s prominent position with regards to the percentage of funds and fund managers located in the jurisdiction adds to our positive reputation and further cements our place as a global player in the crypto industry.
The jurisdiction’s fund offering is attractive to crypto funds looking for a crypto friendly jurisdiction that welcomes regulation and continues to attract global crypto entities”.
Jonathan Garcia, fintech partner of ISOLAS LLP, added:
“Gibraltar has a great legal and regulatory landscape for crypto funds, evidenced by this report. The indicators put further weight behind Gibraltar’s growing status as a ‘go-to’ financial market. The jurisdiction’s strength is derived from its robust and dynamic regulatory framework thanks to our size, coupled with the willingness of regulators to consider input from external industry experts.
The report doesn’t just signal growing of interest in the sector in Gibraltar but points towards impressive overall growth. This is a sign of confidence in the Crypto Hedge Fund industry as a whole and points to greater institutional confidence in the market, something that is very important as crypto joins the ranks of established asset classes.
For Gibraltar to have a growing share of a quickly growing market is extremely encouraging news and a testament to the creativity of all involved in the sector, not least to our dedicated and innovative team here at ISOLAS”.
Garcia also pointed out that Gibraltar paved the way for DLT and VASP regulation years ago, and the number of DLT companies it has been able to attract is a clear indication of this.
According to Garcia, the difference lies in the presence of lawyers, accountants, banks and fund administrators who understand this technology and this new asset class, who are able to deal with the complexities involved.