Panacea Adviser ran a series of masterclasses to provide clarity on the complex world of cryptocurrency.
The Issues:
In June 2021, the FCA extended the temporary registration regime for existing crypto asset businesses from 9 July 2021 to 31 March 2022.
Additionally, a recent Opinium poll showed that more than 90% of UK independent financial advisers would never recommend cryptocurrencies or meme stocks to their clients.
The Solution:
Understand more about cryptocurrency
Competently answer questions raised by clients
Decide whether to embrace it as another asset class for your advised clients.
Bridget Greenwood from The Bigger Pie facilitated the sessions and was joined by several experts in the field to educate further on their specialist topics.
Below is a summary of all 5 sessions with some key takeaways along with a link to their recordings for you to catch up on.
1. Cryptocurrency and Blockchain 101
We heard from the founder of Crypto Canal Eléonore Blanc as she delved deep and shares her knowledge of cryptocurrency and blockchain.
Eléonore Blanc founded CryptoCanal in 2019 to offer education, marketing, and business development services.
She’s worked with industry leaders such as BTC.com, Luno, OKEx, Bitcoin.com, Cyber Capital, Satoshi’s Angels, and HubSecurity. She teaches a monthly Crypto 101 event and offers an in-depth class for more advanced cryptocurrency investors.
In this masterclass she answered these commonly asked questions and topics:
What is cryptocurrency?
Crypto 101 – the basics
Dispelling myths from criminal concerns to environmental factors
What the future looks like – is it an unstoppable monetary revolution?
A “cryptocurrency wallet workshop” to make the presentation tangible
Here are 5 key takeaway topics that were covered:
1. What is Fiat money?
Fiat is the traditional monetary system that is backed by an authority like the government. Cryptocurrency offers an alternative to the traditional system where it separates itself from such authorities.
2. What are the blockchain fundamentals?
Blockchain is a public network where anyone can participate in and own, sell, exchange, and mine cryptocurrencies. There is no middleman, bank, or company. It is permissionless, decentralised, immutable, and transparent that makes it appealing to people looking for an alternative to the Fiat system.
3. How to store your crypto
Hot wallet VS Cold wallet that can only be accessed with something called ‘Private Keys.’
4. How does blockchain work?
Blockchain uses several consensus algorithms whereas Eléonore covers 2. Proof of Work and Proof of Stake.
5. Dispelling myth and what the future looks like?
As a new industry, there are many myths. Hackers can take all your cryptocurrencies? They are for criminals? They are bad for the environment? Investing is basically gambling. The list goes on.
As more people come into the blockchain scene, it is important that they know how the technology works and are educated to avoid being tricked by the many “supposed” resources out there. It is a new yet exciting industry, and we hope people are equipped with the knowledge for their own personal and professional development.
Catch up on the recording here.
2. Dispelling the myths of crypto investments
This session's speaker was a mentor and investor Veronica Mihai who covered black market myths, what are the compelling arguments ‘for’ and ‘against’ cryptocurrency, and why clients are attracted to crypto over traditional investments.
Veronica Mihai is a mentor for individuals interested in starting/growing their careers in blockchain, crypto, and fintech. As a public speaker, she supports the narrative for BTC adoption and financial services decentralisation and inclusion.
She is an angel investor in tech and blockchain start-ups, former hedge fund co-founder, and enterprise-grade cryptocurrency mining farm entrepreneur.
Here are the key takeaways that were covered:
Veronica goes into details about Bitcoin; why someone would choose to hold Bitcoin, what risks people are hedging against and the potentials for that and how Bitcoin can be used.
She then explains the difference between crypto currency and crypto assets; including an overview of the journey of Bitcoin and how it started off as a crypto currency and is now seen as both a currency and an asset.
She also points why big companies are expanding into the blockchain space – due to its potential of value.
Veronica then covered some applications of cryptocurrency and explained the common technical definitions and their purpose, these included; ledgers, distributed networks, nodes, blockchain exchanges.
She then summed up with the regulations surrounding blockchain and how compliance is an important aspect particularly with the FCA.
Catch up on the recording here.
3. Crypto Assets and tax implications – how to talk to your clients about Crypto
In this session we were lucky to have had 2 speakers.
Louise Lane FCA CTA – Senior Tax Manager at Wright Vigar Chartered Accountants. She is an experienced crypto tax advisor with almost 3 years experience advising clients in this area.
Dan Howitt – Co-Founder and CEO of Recap – privacy-focused Crypto Software to Calculate your tax position, Connect your accounts and Track your portfolio.
These were the highlights of this webinar:
Tax implications of activities in crypto assets for UK Individuals (ie investing, trading, staking, mining, employment income, lending rewards, and airdrops)
Which taxes apply?
What is a taxable event?
How to calculate the CGT?
How Recap can help your clients (and their accountant) calculate their tax position
Succession planning with crypto assets
How to have a meaningful discussion with clients on crypto
Here are the key takeaways that were covered:
Louise explained how cryptoassets are taxed for UK Individuals; including an overview of the complex ‘share matching’ rules applied for capital gains tax disposals. Dan Howitt demonstrated how Recap can help your clients (and their accountant) calculate their tax position, track their portfolio for strategic financial planning purposes and estimate the tax on contemplated transactions. Louise then gave a brief insight into succession planning considerations regarding cryptoassets, before summing up with her experiences advising crypto clients.
Catch up on the recording here.
4. CBDCs and Britcoin – what does a digital central bank currency mean for us?
In this session we were joined by CBDC expert Jannah Patchay.
Jannah is the founder of Markets Evolution, a consultancy specialising financial market simulation and helping financial institutions and fintechs to define, develop and execute their commercial strategies to highly regulated environments. She is a leader in CBDCs, central bank digital currencies.
Here are the key takeaways that were covered:
Jannah explains what CBDCs are, what their benefits are and what does adoption of CBDC mean for a country, its economy, financial institutions, businesses and citizens.
She also compares them to the traditional fiat currency system and explains the difference between the two. In addition, she explains how stable coins differ from Bitcoin and how CBDCs again differ from those two.
Jannah then looks at the different design considerations that give rise to different CBDC features and discusses some of the CBDC projects in flight around the world.
She explores the privacy considerations as privacy is a huge area of concern around CBDCs.
Catch up on the recording here.
We also have a dedicated blog post that goes into more details of this session with Jannah here.
5. DeFi for institutional investors – what the future looks like
In the final masterclass, we hear from Dr. Amber Ghaddar.
Amber is one of the founders of AllianceBlock, the blockchain startup building a framework for the world’s first globally compliant capital market by bridging centralised finance and decentralised finance.
Amber started her career in Global Investment Research at Goldman Sachs London, and moved from there to the cross asset solution team at JP Morgan, where she built the JP Morgan UK multi asset franchise.
Here are the key takeaways that were covered:
Amber explained what DeFi (Decentralised Finance) is and how you can access it.
She explained how you can invest in it along with the challenges, risks and opportunities DeFi faces.
She gave an overview of the type of DeFi products people might come across that might be good for advisors to be aware of and also the due diligence that are done for protocols the risk to look out for. analysed the challenges and risks along with the opportunities DeFi face.
Amber then shares her personal insight on the future of DeFi and how AllianceBlock is helping to shape the future.