Jeremy Moran
In today’s digital age, the need for asset protection has become increasingly evident. Fortunately, wealth solutions firms like Ora Partners and Fidelity Investments offer offshore trusts, a reliable way to safeguard assets such as traditional holdings, cryptocurrencies, and other digital assets.
While investors may be accustomed to customary security measures for their physical assets, the rise of digital assets introduces another layer of complexity. An offshore trust can provide the highest level of protection possible against any potential threat by keeping assets safe and secure. With this level of security, investors can rest assured that their assets will remain protected throughout any economic or political turmoil, allowing them to focus on furthering their financial goals.
No matter what others say, digital assets are here to stay. Despite still being the “Wild West” of the financial landscape, it has proven to both hold some measure of value and attract investors. With this said, investing in crypto can also present some risks to the investor, both known and unknown.
From the security of self-custodial wallets to the solvency of the firm facilitating your trading, buying, and selling of digital assets—security is crucial. Protecting your crypto and digital assets has become a priority as the digital finance industry evolves.
Are Digital Assets Really Secure?
When cryptocurrency first emerged, many people spoke highly about decentralization and the security of the blockchain—and technically, they were correct. The blockchain, where the chain of custody and transactions are recorded, is very secure because of the cryptography and decentralization it uses. Unfortunately, for many investors, the institutions they use to facilitate the trading of cryptocurrency are not as secure.
Two of the biggest players in the digital asset space, FTX and Celsius, crashed, taking the uninsured funds of their depositors with them. While FTX imploded because of a lack of solvency and a huge amount of undisclosed debt, Celsius made claims too good to be true as many investors realized the 10-17% returns they were promised never materialized. As a result, this exposed the fundamental lack of understanding investors had on how the crypto space works.
Aside from the inherent risks associated with digital assets, there are also the same risks from creditors and litigation that physical assets are subject to. Fortunately, there are some tools available to protect your wealth, even for assets made of ones and zeros, such as an offshore asset protection trust.
Offshore Trusts
An offshore trust offers the highest level of protection for traditional assets, cryptocurrencies, and other digital assets. An offshore trust is a trust that is created under the legal system of an offshore jurisdiction. One key benefit of an offshore trust is that it is not subject to U.S. court orders or legal judgments. If a litigant wants to go after assets protected by an offshore trust, they must do so in the jurisdiction of the trust, which can often be costly.
The most popular jurisdictions for offshore trusts are the Cook Islands and Nevis. These jurisdictions don’t charge income taxes for assets held in an offshore trust (however, taxes in the U.S. would still apply), and the asset is protected even if it is not located in that jurisdiction.
Vulnerable Assets Need Protection
Cryptocurrency and other digital assets, vulnerable and volatile as they are, are an increasingly important part of the financial investment market and require the same level of protection as other physical and financial assets. Employing new tools and strategies can ensure that your assets are protected from legal action.
