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15 November 2021       Albourne   SBAI

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Today, the SBAI, a global alliance of alternative investment managers and allocators and custodian of the Alternative Investments Standards, released a new Toolbox memo providing guidance on completing operational due diligence on crypto assets. The memo can be found in the SBAI Toolbox for Crypto Assets.

More recently the asset class has gained attention from institutional allocators and alternative asset managers and some more traditional hedge fund managers are now allocating to this asset class. Institutional allocators conduct operational due diligence (ODD) on the underlying managers and funds that they invest in, and since crypto assets operate using different infrastructure than more traditional asset classes, any ODD must take account of certain more prominent risks.

Steven D’Mello, Partner, Operational Due Diligence, Albourne Partners said: “ODD of crypto assets requires a more in-depth look into certain operational risks. The infrastructure is still in its infancy, and whilst it is becoming more institutionalised, careful attention needs to be paid. This memo from the SBAI continues its work on improving industry outcomes by providing a valuable toolkit for allocators to understand where the risks might be different from more traditional asset classes and provide guidance on the types of questions that should be asked in due diligence processes.”

For the full press release, click here.