Guernsey opens doors to cryptocurrency funds

Guernsey is moving towards a more permissive approach to crypto funds, ensuring the jurisdiction is in step with the continued growth of the global cryptocurrency market.

In a statement issued on 9 June 2025, the Guernsey Financial Services Commission (GFSC) recognises that collective investment schemes can, when appropriately run, provide vehicles for a range of investors to invest indirectly in crypto currencies, provided that the investor is well informed of the risks and is able to bear any potential losses.

The statement highlights that the GFSC is taking a more flexible approach to certain digital assets, recognising that crypto has been evolving and that some crypto currencies, such as Bitcoin, appear to be entering a more mature period.

This is in keeping with the continued growth of the worldwide cryptocurrency market, which is driving increasing use cases as well as institutional interest and in turn, enabling regulatory evolution.

Additional clarity for digital assets businesses

The statement issued by the GFSC seeks to provide additional clarity for prospective digital assets businesses so that they can better understand the GFSC's expectations considered as part of the regulatory application process. These include:

• track record, experience and resources

• detailed risk warnings if targeting non-institutional or professional investors

• a clear and compelling business model

• risk awareness and appropriate cyber security and operational controls

In addition to standard risk mitigations applicable to all regulated funds, which broadly consist in fund board oversight, administration by a licensed fund administrator and disclosure, the GFSC has set out specific expectations regarding any funds with crypto exposure, including:

• mechanisms to ensure that retail investors have received professional advice

• mechanisms to ensure retail investors do not commit more than they can afford to lose

• the regulated status of service providers, including any custodian

• detailed consideration in the business risk assessment to ensure appropriate compliance monitoring plans, testing and risk management processes

A shift in Guernsey's approach

In the past, the GFSC had expressed reservations in enabling crypto investments, noting in a previous statement in 2021 that crypto technologies and virtual assets are highly speculative and involve particular risks, which warrant the application of specific measures to safeguard investors.

While its latest statement confirms the GFSC's continued attention to ensuring retail investors are appropriately informed, it no longer expressly discourages retail investors from investing in crypto funds.

These changes are occurring alongside the UK Financial Conduct Authority's move to legalise crypto asset-backed Exchange Traded Notes (cETNs) for professional investors in November 2024 and its proposal to lift the ban on their sale to retail customers, announced on 6 June 2025.

This shift reinforces Guernsey's position as a forward-thinking financial hub that is open to innovation and committed to creating an enabling environment for regulated, innovative investment solutions including with respect to digital assets.

While the current position confirms that Guernsey's crypto appetite is growing, it should be noted that the GFSC remains cautious in respect of virtual asset service providers, including those providing retail exchange services.

How Ogier can help

Our Investment Funds team includes specialists in blockchain and crypto assets. We provide tailored advice on all crypto-related matters, including applications and fund formation, as well as transaction support across both traditional and digital finance sectors.

• the successful application of a multi-strategy hedge fund holding crypto assets within its portfolio

• the formation of multiple funds focused on blockchain technology

• advising in relation to the establishment of an entity formed to issue cETNs listed on the Deutsche Bourse

If you'd like to discuss crypto fund structures or prospective applications, contact our team.

About Ogier

Ogier is a professional services firm with the knowledge and expertise to handle the most demanding and complex transactions and provide expert, efficient and cost-effective services to all our clients. We regularly win awards for the quality of our client service, our work and our people.

Disclaimer

This client briefing has been prepared for clients and professional associates of Ogier. The information and expressions of opinion which it contains are not intended to be a comprehensive study or to provide legal advice and should not be treated as a substitute for specific advice concerning individual situations.

Regulatory information can be found under Legal Notice