Global fintech and funding innovation ecosystem

Linklaters: Crypto and DeFi: Understanding the Risk Landscape and Tackling the Shifting Outlook

Linklaters | Martyn Hopper | Dec 20, 2022

Digitalizing financial markets - Linklaters:  Crypto and DeFi:  Understanding the Risk Landscape and Tackling the Shifting Outlook

Credit: Linklaters

The digital asset market as a whole is experiencing turbulence. In the past year institutional investors have increasingly embraced crypto and other digital assets in their portfolios. As is often the case in distressed markets, there are now signs of a “flight to quality”.

  • The decentralised finance (DeFi) space remains nascent, and faces challenges to be addressed over time.
    • In light of some of the recent disruptive market events and apparent frauds involving arguably trusted, centralised crypto projects and entities, some point to DeFi’s potential for transparency and disclosure as a potential bright spot for the industry.

See:  BoE Speech by Carolyn Wilkins on DeFi Governance Limits and Opportunities: Get Up, Stand Up!

  • In this report, our global fintech team:
    • Focuses on three significant jurisdictions in the global digital asset market – the U.S., the EU and the UK.
    • Looks at the key legal risks associated with dealing with cryptoassets and decentralised networks.
    • Explores the destabilising impact of key market events including insolvencies in 2022, which have in part arisen from well documented issues in the crypto and DeFi markets, and which have created a situation of heightened risk.
    • Sets out the matrix of players, products and services in the mainstream and emerging finance markets.
    • Considers how risks can play out in terms of increased regulatory scrutiny and enforcement and increased litigation.
    • Suggests some practices for achieving and embedding a good legal risk management strategy for players in these markets.

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NCFA Jan 2018 resize - Linklaters:  Crypto and DeFi:  Understanding the Risk Landscape and Tackling the Shifting OutlookThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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