Set Up a Cryptocurrency Hedge Fund in Cyprus
Updated on Friday 02nd February 2018
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The cryptocurrency sector became an attractive industry in numerous jurisdictions across the world, including in Cyprus. A hedge fund startup in Cyprus refers to an instrument that uses advanced investment strategies. The hedge fund can also be an attractive investment tool for investing in virtual currencies businesses, as the country is one of the main enthusiasts of the opportunities that can arise from blockchain operations.
At the moment, cryptocurrency is rather familiar to the Cypriot citizens, who perform cryptocurrency transactions on a current basis, especially in Bitcoin, the most popular virtual currency at a global level. Another reason for starting a hedge fund in Cyprus related to cryptocurrency activities is that the Cypriot market already provides tertiary studies in virtual currencies, which can be completed as a master’s degree in Nicosia.
In the last years, the sector related to cryptocurrency transactions increased at a very rapid pace. Since 2014, more than 100 cryptocurrency funds were incorporated at a global level, while 2017 represented the most important year for this financial activity (with more than 80 cryptocurrency funds incorporated in various countries).
It is important to know that at the level of 2017, the market for cryptocurrency was valued at $13 billion and in the last quarter of the year, the total value increased at more than $170 billion.
Out of all the virtual currencies transactions, Bitcoin stands out as the main digital asset, its value increasing by 500% in 2017.
Regulations for Cypriot hedge funds
Most of the hedge funds registered in Cyprus are set up as international collective investment schemes (ICIS). The procedure on how to start an investment fund under this structure stipulates that the investors should decide between an open-ended or closed-ended fund, which is regulated by the same rules of law, such as:
• Investment Service Law;
• Consolidated Market Abuse Law;
• Transparency Law;
• Companies Law.
Hedge funds benefit from minimal regulations and it is not necessary to appoint a manager/trustee. Investors may contact our team of affiliates in Cyprus for specialized advice on how to invest in a cryptocurrency hedge fund registered in this country.