Crypto funds gain momentum as UAE enters a new phase of institutional digital asset investment
Q&A with Vanessa Abernethy, Co-Founder of Oryx Legal Consultants
Vanessa Abernethy, Co-Founder of Oryx Legal Consultants, examines how the UAE’s digital asset fund market is evolving as institutional interest grows and regulatory scrutiny increases.
What is changing in the UAE digital-assets investment market?
The UAE’s digital-assets investment market is becoming increasingly institutionalised. Digital assets are moving beyond specialist crypto investors and being incorporated into more structured investment strategies, attracting traditional investors, private equity and venture capital firms.
As these participants enter the market, they are bringing expectations around regulation, governance, risk management, reporting and operational infrastructure that are much more closely aligned with traditional investment and fund structures. This is helping to shift the market from an early-stage, predominantly crypto-native ecosystem towards a more mature institutional investment environment.
What are regulators paying closer attention to now?
As the digital assets industry develops, regulators have adapted their frameworks to accommodate digital assets. Regulators such as the Dubai Financial Services Authority (DFSA) are placing more responsibility on firms to demonstrate how they are meeting regulatory obligations. This increased scrutiny means firms need to be able to evidence their assessment of crypto currencies being included in fund structures and their compliance processes clearly from the outset, and Oryx is seeing that first-hand with clients.
What should fund managers or investors consider before setting up a digital-asset fund?
Most clients initially think the biggest decision is whether DIFC or ADGM is the best fit for their fund. Regulatory frameworks differ, however, meaning sponsors need to consider which environment best fits their investment strategy. That assessment requires a clear understanding of the legal, operational and governance implications of the proposed structure. Having experience across both traditional fund structures and digital-asset regulation can provide a useful perspective at this stage. Oryx’s experience including direct regulatory experience within the team from VARA and having worked on some of the first digital asset funds being established in the UAE, brings an additional perspective when assessing those questions before establishment rather than addressing them later in the fund’s lifecycle.
