Due diligence with crypto staking providers
The post Due diligence with crypto staking providers appeared on BitcoinEthereumNews.com. With the boon of Proof-of-Stake networks across the crypto industry, staked crypto assets have emerged as an increasingly attractive financial instrument for individual and corporate investors. Data from DefiLlama shows that the value of assets locked in liquid staking services jumped 292% to $20 billion as of September 2023. This growth has not gone unnoticed among institutions looking to explore the crypto space — with 74% of firms committed to exploring digital assets and over 63% reporting a positive outlook on the wider crypto space. However, the lack of compliance and due diligence remains a key stumbling block for potential investors. Recent findings from UK-based crypto firms found that just one in five (17%) consistently verify new customers, with half admitting to conducting these checks sporadically. As such, with the growing adoption of digital assets and staking services, it’s more critical for investors to assess counterparty risk to protect their portfolios thoroughly. For EU-based or offshore institutional investors from any other jurisdiction, asking the right questions to their staking provider is essential. As such, here are five critical questions that will help establish the veracity of your staking provider. Does your staking provider expose you to US legal and/or the SEC’s jurisdiction? One of the key aspects to consider when choosing a staking provider is the legal jurisdiction they operate in. Specifically, users should inquire as to whether the staking provider exposes them to US legal jurisdiction and/or the jurisdiction of regulatory bodies such as the Securities and Exchange Commission (SEC). This is important to note as staking providers that operate under US legal jurisdiction may present a counterparty risk for investors. In contrast, the EU has a clear regulatory framework for crypto assets, offering investor protection and setting requirements for Crypto Asset Service Providers (CASPs). Some countries also have capital…
The post Due diligence with crypto staking providers appeared on BitcoinEthereumNews.com.
With the boon of Proof-of-Stake networks across the crypto industry, staked crypto assets have emerged as an increasingly attractive financial instrument for individual and corporate investors. Data from DefiLlama shows that the value of assets locked in liquid staking services jumped 292% to $20 billion as of September 2023. This growth has not gone unnoticed among institutions looking to explore the crypto space — with 74% of firms committed to exploring digital assets and over 63% reporting a positive outlook on the wider crypto space. However, the lack of compliance and due diligence remains a key stumbling block for potential investors. Recent findings from UK-based crypto firms found that just one in five (17%) consistently verify new customers, with half admitting to conducting these checks sporadically. As such, with the growing adoption of digital assets and staking services, it’s more critical for investors to assess counterparty risk to protect their portfolios thoroughly. For EU-based or offshore institutional investors from any other jurisdiction, asking the right questions to their staking provider is essential. As such, here are five critical questions that will help establish the veracity of your staking provider. Does your staking provider expose you to US legal and/or the SEC’s jurisdiction? One of the key aspects to consider when choosing a staking provider is the legal jurisdiction they operate in. Specifically, users should inquire as to whether the staking provider exposes them to US legal jurisdiction and/or the jurisdiction of regulatory bodies such as the Securities and Exchange Commission (SEC). This is important to note as staking providers that operate under US legal jurisdiction may present a counterparty risk for investors. In contrast, the EU has a clear regulatory framework for crypto assets, offering investor protection and setting requirements for Crypto Asset Service Providers (CASPs). Some countries also have capital…
What's Your Reaction?
