The digital assets universe is changing fast. As the sector matures, clients are more ambitious than ever. But misconceptions about regulation, structuring and market access can slow progress or create unnecessary risk.
The good news? Regulatory processes are not roadblocks – they're the foundation for long-term credibility and growth. With the right guidance and a proactive mindset, regulatory compliance is a chance to build a stronger, more resilient business.
Speed is not guaranteed, so plan for credibility
Many clients expect digital asset projects to launch as quickly as the technology behind them. But regulatory approvals, whether in Bermuda, the British Virgin Islands (BVI), the Cayman Islands or Jersey, can take time. Early alignment between commercial ambitions and regulatory timelines is essential.
By planning ahead and setting realistic expectations, clients can avoid costly delays and ensure their structures are robust and future-proof. For example, the 'sandbox' licensing regimes in the BVI and Bermuda allow digital asset businesses to launch and test new products or services in a controlled environment, under the supervision of the regulator, before committing to the full licensing process. This approach gives businesses the flexibility to innovate and refine their offerings while ensuring compliance from day one.
Similar frameworks exist in other jurisdictions, providing a practical pathway for fintechs to validate their models without sacrificing regulatory rigour.
A licence in one investment hub does not mean global access
A licence in one investment hub is not a global passport. Each market - whether US, EU, UK or beyond - needs its own legal and regulatory analysis, especially for marketing and distribution. Clients are often surprised to learn that approvals are not automatic, except in rare cases like the EU’s passporting regime where a licence has already been approved in a home EU Member State.
Rather than a barrier, the need for separate approvals in each jurisdiction is a catalyst for building resilient, future-proof structures. For example, a business looking to serve both European and Asian markets might establish a Cayman Islands foundation for governance purposes, use the BVI for token issuance and have Ireland as a MiCAR gateway for EU access.
Each step requires careful legal analysis to ensure marketing and distribution strategies comply with local are target market rules. Advisors with hands-on experience in cross-border structuring help clients map out where approvals are needed, coordinate filings and adapt to changing requirements, so businesses can expand internationally with confidence and avoid costly missteps.
Investment hubs are not unregulated
Some assume that Bermuda, the BVI and the Cayman Islands have no regulation. In fact, these jurisdictions apply standards aligned with global expectations but without burdensome national interest additions, these include robust licensing, AML compliance and governance expectations. For example, Bermuda’s regulator draws on decades of insurance oversight to supervise digital asset businesses, while both the VASP regimes in the BVI and Cayman reflect international standards on anti-money laundering and governance.
Such investment hubs continue to provide access to institutional capital, enhanced reputation and a seat at the table with global players. A sensibly regulated digital asset sector provides a good legal foundation which translates into competitive advantage. Institutional investors are increasingly committed to the sector, and legal structures with solid foundations are becoming a prerequisite for participation.
Tax neutrality: substance and advice matter
Clients sometimes expect complex tax structuring or assume that resident directors are required in tax-neutral jurisdictions. In reality, efficient structuring is possible, but economic substance requirements and local nuances matter. In all our offshore jurisdictions, tax structuring focuses on alignment with global standards while maintaining investment hub advantages.
Clear, upfront guidance helps clients avoid unnecessary complexity and helps to match compliance with shifting global standards. Advisors help clients meet substance requirements where required and preserve tax efficiency as global tax rules tighten, turning what could be a compliance headache into a strategic asset.
Proactive legal advice is essential at every stage
Legal advice is not just a tick box exercise. For example, where relevant institutional investors expect legal partners to guide them through AML, FATCA and CRS compliance and create structures that anticipate potential future regulatory friction without stalling client onboarding.
Today’s legal counsel are business enablers – connecting clients to the right networks, simplifying complexity and providing creative, solutions-driven advice. This partnership is key to scaling sustainably and staying ahead in a fast-evolving market. The most successful clients treat their legal advisors as strategic partners from day one.
Turning misconceptions into momentum
Every misconception that is transformed into an advantage is a chance to build a stronger business. By embracing regulatory clarity, seeking expert advice early and choosing jurisdictions wisely, digital asset innovators can transform complexity into a competitive advantage. Early compliance allows for sustained growth in the post-boom world.
For deeper insights, explore our white paper, ‘
Digital assets in the post-boom world: Building infrastructure, not hype’, which distils lessons from our global team at the forefront of legal and regulatory change.
