Cryptocurrencies have been mostly a retail product since the inception of Bitcoin in 2009. Increasingly, institutional investors have looked at the space, and even traditional banks have been offering their clients custodial services of Bitcoin and Ethereum. Institutions such as Banks, Funds, and Family Offices may see the long-term opportunity in the disruptive nature of blockchain technology, but there are major issues with adoption.
There are three major point points for institutional adoption that Metariver has identified:
Custodians and digital asset exchanges must demonstrate and maintain effective corporate governance practices such as:
By implementing and maintaining these corporate governance practices, digital asset exchanges and custodians can help restore confidence in the cryptocurrency marketplace after the recent industry failures and ensure that they are operating in a responsible and compliant manner.
Risk and compliance in the cryptocurrency sector have created a significant challenge for governments and regulatory agencies across the globe due to the lack of regulatory clarity. In the United States, the lack of unified federal regulations has caused a patchwork of different laws and regulations from state to state, making it difficult for businesses to know what is legal and what is not. Furthermore, the debate between the SEC and the CFTC over whether cryptocurrencies should be classified as securities have caused a great deal of confusion.
Additionally, tax policies on cryptocurrencies, DeFi, and NFTs remain unclear due to the lack of guidance from tax authorities on how these activities should be taxed. To mitigate these issues, some investors have shifted their capital to jurisdictions with clearer regulations and more favorable tax rules. In contrast, a unitary state is better able to address the current risk and compliance issues in the cryptocurrency sector by creating a unified set of regulations that applies to the entire state or country.
Correspondent banks are a vital part of the global banking system, providing services such as currency exchange, payment processing, and fund transfers for corporations, individuals, and financial institutions. AML/CFT (Anti-Money Laundering/Combating the Financing of Terrorism) compliance is especially important for correspondent banks regarding the source of funds reporting, especially for offshore financial services. Cryptocurrencies must be purchased and sold with proof of source and destination to ensure they are free from any money laundering issues. KYT (Know Your Transaction) technology is used to monitor transactions, as well as tools that provide fair market value pricing and proof of reserve reporting. Smart contract safety is also critical for risk management, as well as custodial safety to protect assets from fraud and theft. All these measures are important for correspondent banks to ensure compliance with AML/CFT regulations.
At Metariver, we prioritize the safety of client assets and strive to build a trusted service with a strong culture of governance and controls. To accomplish this, we have created a value proposition that meets the needs of three key stakeholders: clients, regulators, and investors. We have a proven technology stack, a governance focussed management team, and a seasoned board of directors, to ensure that our corporate governance culture is properly implemented.
Metariver has chosen a jurisdiction that provides a clear regulatory framework that offers comfort to our clients in terms of owning different cryptocurrencies, with clear tax rules that fit within institutional investment mandates. Our systems are designed to meet the risk appetite of our clients when investing in the cryptocurrency sector.
Metariver is regulated & licensed by the Securities Commission of the Bahamas, the Digital Assets and Registered Exchanges Act (DARE) and the Financial and Corporate Service Providers Act (FCSP)
