Your returns are outperforming Bitcoin. You pioneered yield farming on Yearn, scooped up AXS on its Uniswap debut, and spotted Sam Bankman-Fried's potential early. Naturally, launching a crypto fund seems like the next step. But beyond capital and trading prowess, success hinges on securing the right service providers—custodians, administrators, lawyers, and auditors—to attract institutional investors.
The Role of a Custodian
Custodians are critical for fund legitimacy. They safeguard assets, ensuring technical security while managers focus on alpha generation. Institutional allocators—family offices, pensions—typically mandate third-party custody for funds exceeding $10M AUM. Custodians also prevent misappropriation by holding assets independently.
Fee Structures:
- Most charge a percentage of AUM.
- Some levy transaction/withdrawal fees.
Leading Crypto Custodians:
- Utilize Multi-Party Computation (MPC) for enhanced security.
- MPC splits private keys across multiple parties, requiring consensus for transfers (like advanced multi-sig).
👉 Discover top-tier custody solutions
Fund Administrators: The Backbone
Fund admins handle NAV calculations, financial reporting, and LP communications. They also manage KYC/AML compliance for investors.
Top Crypto Fund Administrators:
- Specialize in blockchain-native accounting.
- Streamline investor onboarding.
Legal Essentials
Retain a lawyer for:
- Fund structuring (master-feeder, offshore entities).
- Offering documents and partnership agreements.
Reputable Crypto Law Firms:
- Navigate regulatory complexities.
Auditors: Validating Track Records
Auditors verify performance history and financial statements, collaborating closely with fund admins.
Prominent Crypto Auditors:
- Ensure transparency for allocators.
MetaMask Institutional: Bridging DeFi and TradFi
Consensys’s MetaMask Institutional connects custodians and funds to DeFi opportunities compliantly. Built on MetaMask’s proven infrastructure (5M+ monthly users), it offers:
- Institutional-grade security.
- Seamless access to crypto-native yields.
👉 Learn more about MetaMask Institutional
FAQ
Q1: When is a custodian necessary?
A: Typically at $10M+ AUM or when targeting institutional investors.
Q2: Can MPC custodians bypass licensing?
A: Some argue MPC’s shared custody model exempts them, but regulations vary.
Q3: What’s the cost of fund administration?
A: Fees range from 0.1%–0.5% of AUM, depending on services.
Q4: How do auditors add value?
A: They validate performance, boosting investor confidence.
Q5: Why choose MetaMask Institutional?
A: It merges DeFi accessibility with institutional compliance.
Q6: What legal structures suit crypto funds?
A: Offshore entities or master-feeder setups, depending on investor domiciles.
Crypto funds thrive on robust infrastructure. Partner with the right providers to scale securely.