On 28 Aug 2018, STEP Singapore held a full-house seminar on the topic of “Trust Over Cryptocurrencies”. Interest in the subject was sky-high and the venue was filled to absolute capacity. Chaired by STEP Singapore Branch Committee member Chan Ee Lin, Director of Wealth Management Institute, Nanyang Technological University, the seminar featured cryptocurrency legal eagles Koh Chia Ling, Managing Director, OC Queen Street LLC, and Bryan Tan, Partner, Pinsent Masons MPillay, who spoke on Cryptocurrencies, ICOs and the current state of play including regulations, as well as Professor Tang Hang Wu, School of Law, Singapore Management University, who focused on trustee duties in respect of digital assets.
Technological jargon was kept at a minimum and discussions kept laser-focused within the context of trustees’ overarching duty of care with regard to investments in cryptocurrency, i.e. trustees with duty to act prudently and safely and to take such care and act as an ordinary prudent man if he was minded to make an investment for the benefit of other people for whom he felt morally bound to provide (per Lindley LJ in Re Whitley) and to judge the risk against the entire portfolio rather than the risk attached to each investment alone. Participants learned how to analyse investing in tokens, understood what hot and cold storage issues were, and realised that the lack of clarity in relation to tax, legal and regulatory aspects etc, continued to present challenges to holding a trust over cryptocurrencies.
An informal poll taken at the seminar revealed that no trustee present was yet accepting cryptocurrencies into trusts, but many had clients who had expressed interest in injecting such assets into trusts. Also currently, it seemed that none of the Big 4 or other large audit players were willing to audit portfolios containing cryptocurrency elements, and no insurer was yet willing to insure against cryptocurrencies. Additionally, apparently not many advisors were yet willing to accept cryptocurrencies into existing portfolios. Hence, whether a prudent trustee should invest in cryptocurrencies at this point in time, may depend substantially on the trustee’s ability to hand-over-heart objectively justify the prudence of doing so.
Click HERE to view event photos.
Contributed by:
Ms. Chan Ee Lin
Director, Wealth Planning & Risk Management, Wealth Management Institute, NTU