An increasing number of high-net-worth individuals whose wealth comes from Bitcoin and other cryptocurrencies are being rejected by traditional trust companies when trying to set up offshore trusts for tax planning and wealth succession, according to the Financial Times. The report says trustees are concerned about how difficult it can be to verify the source of funds tied to crypto holdings, as well as potential money-laundering exposure. They are also wary of sharp swings in digital asset prices and the fiduciary risks that could follow if private keys are lost. Some trust firms that focus on digital asset clients are still taking on this business by using on-chain analysis and tighter compliance reviews. Even so, most mainstream trustees remain cautious. Their concern, the report said, is that they could later face legal and reputational liability tied either to the origin of crypto assets or to major declines in their value.
An increasing number of high-net-worth individuals who built their wealth through Bitcoin and other cryptocurrencies are being turned away by traditional trust companies when they seek to establish offshore trusts for tax planning and wealth succession, according to the Financial Times.
The report said trustees are mainly worried about the difficulty of verifying source of wealth, potential money-laundering risks, sharp price volatility in digital assets, and fiduciary liability tied to the possible loss of private keys.
It added that some trust companies focused on digital asset clients are taking on such mandates by using on-chain analysis and stricter compliance checks. Most mainstream trustees, however, remain cautious, citing concern that they could face legal and reputational liability in the future over the origin of crypto assets or a steep decline in their value.
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