Family Offices: Rising Crypto Interest and the Struggle with Regulatory Challenges

A luxurious family office with global map on the wall, individuals discussing crypto assets, elegant blend of modern & classic art styles, warm color palette evoking wealth and prestige, soft lighting, long shadows, sense of determination and anticipation, contrasting old financial world with emerging digital horizons, navigating complex regulatory landscapes.

Family offices across the globe are displaying a heightened interest in digital assets, according to a new study commissioned by Ocorian, a global provider of services to high-net-worth individuals. However, these individuals seem to struggle with the necessary support to navigate the complex regulatory and reporting obligations.

The study included 134 family office professionals managing approximately $62.4 billion in assets. It revealed that a staggering 90% of participants noticed a client-driven push to include cryptocurrencies like BTC and ETH in their investment strategies. This finding starkly contrasts a recent Goldman Sachs survey, suggesting that interest in cryptocurrencies has decreased among family offices. In the Goldman Sachs report, the percentage of those uninterested in cryptocurrencies increased from 39% to 62% over the past couple of years.

The differing outcomes between these two surveys can potentially be attributed to the variations in the questions posed. However, the disparity raises speculations about the true sentiment of family offices regarding cryptocurrencies. Notably, Ocorian’s family office head, Amy Collins, reaffirms the growing interest in crypto assets among high-net-worth individuals and family offices.

Despite the enthusiasm, Collins does express concern about the lack of regulatory and reporting support. In the survey, 80% of family offices and high-net-worth individuals identified this challenge. This includes concerns about differing tax regimes for digital assets across various jurisdictions.

Katherine Ng, managing director of TZ APAC, a Singapore-based team focused on the adoption of the Tezos blockchain, highlights the notable shift in the landscape of fund management solutions. Gen Z, with their wealth not confined to traditional banks but rather diversified across stablecoins, cryptocurrencies and NFTs, is a key driving force behind this trend.

Ultimately, the growth of interest in cryptocurrencies presents a strong case for the asset class. However, the lack of regulatory clarity continues to hamper the ease of investment for wealthy individuals and family offices. This paints a picture of a to-and-fro tug of war between the potential of cryptocurrencies and the challenge of navigating complex regulatory and reporting obligations; leaving many investors grappling for expertise in a high-risk market space.

Source: Blockworks

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