PwC’s head of crypto sets up digital asset fund in Dubai

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PwC’s global crypto leader quit his role with the firm to set up a digital asset fund in Dubai, highlighting how the city is attracting crypto firms while other perceived hubs including Singapore and Seoul , examine the sector.

Henri Arslanian told the Financial Times that Dubai’s “crypto openness” influenced his decision to establish his Nine Blocks Capital Management digital asset fund in the city, where he won tentative regulatory approval.

The digital asset fund, which will receive $75 million from its main funder and main shareholder Nine Masts Capital, a Hong Kong-based hedge fund, has also positioned three portfolio managers in the Cayman Islands.

The fund’s presence in Dubai comes as the city strives to establish itself as a crypto hub after Asian financial hubs such as Singapore and Hong Kong appeared to cool the sector following a strong market rout and a wave of corporate collapses.

“Hong Kong would have been a natural home for us,” Arslanian said, adding that Nine Blocks had also considered Singapore.

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“However, when we looked at the broader ecosystem… Cayman and Dubai made a natural fit,” he said, citing factors such as regulatory approval times and the ability to travel easily. Hong Kong still has a mandatory hotel quarantine for most international travelers.

Arslanian, who will remain a senior adviser at PwC, said he has already moved to Dubai. He added that the fund may add a base in Asia later, but Dubai’s travel connections and time zone just four hours behind Singapore made it easier to cover the region.

Dubai’s crypto surge comes in the wake of rival regional hubs Singapore, Hong Kong and Seoul, putting the fledgling industry under increased scrutiny.

Sopnendu Mohanty, fintech director at the Monetary Authority of Singapore, said in June that the city-state would be “brutal and relentlessly tough” on crypto misbehavior.

A few days later, Singapore’s watchdog reprimanded Three Arrows Capital, a once-large crypto hedge fund that collapsed after a credit crunch hit the digital asset market.

Dubai has opened its doors to some of the biggest participants in crypto. Last year, exchange Binance announced a virtual asset license from regulators in Dubai, while rival exchange FTX announced last week that it was allowed to operate in the jurisdiction.

Arslanian said the city’s “tier one” regulatory and licensing regime makes it attractive to funds like his, which hope to attract institutional investors.

In the past two months, Komainu, a crypto group backed by Japanese investment bank Nomura, received tentative approval from the city’s digital asset regulator, while crypto exchange CoinMENA was granted a license. provisional.

“I think so [Dubai] is currently the most attractive destination for many large crypto companies,” said Carlton Lai, head of blockchain and cryptocurrency research at Daiwa Capital Markets, adding that the city moved “very quickly” to distribute licenses.

“Compare that with Singapore and Hong Kong, not only have things moved very slowly, but there have been many regulatory flip-flops that just reduce confidence in its regulatory direction,” he added.

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