1Token, named Portfolio Management Solution of the Year at the Hedgeweek Global Digital Assets Awards 2024, provides tech solutions tailored to the needs of digital asset investment managers. Damon Xu, the firm’s Co-Founder and CEO, highlights some of the recent changes and challenges in the crypto investment space…

In no more than 75 words, please describe your firm’s service offering and what makes it special?

1Token is an SOC2 certified global technology provider for digital asset investment managers, operating in major financial centres including London, New York, Miami, Hong Kong, and Singapore, managing over $20bn in assets for more than 50 clients worldwide,

Our award-winning Crypto Asset Management (CAM) system serves portfolio managers, risk managers, treasury managers and fund operations and accountants, providing automated API connections to CeFi and DeFi venues, and analytics to high frequency trading, derivatives, and DeFi activities.

What product or service innovation from the past 12 months are you most proud of?

In Q2 2024, we launched a new generation of our system that represents a significant leap in functionality and user experience. We enhanced key features such as analysis, reporting, and visualisation, making them not only more powerful, but also more intuitive. One notable innovation is our advanced long-term historical performance rebuilding, which simplifies the migration of historical data, ensuring seamless continuity in portfolio management. This upgrade was driven by feedback from our clients, who sought a system that combines robust functionality with ease of use, aligning with the needs of sophisticated investors.

What has been the most significant change you've observed in the global crypto industry in the past 12 months?

The past 12 months have marked a critical shift towards industry specialisation within the global crypto market. Initially, institutions managed multiple sectors in-house, developing and maintaining their own systems. However, we are now witnessing a trend where specialised third-party providers are increasingly being utilised. Custodians are managing asset custody, exchanges are handling trades, and staking is performed by professional staking services.

This specialisation allows firms to focus on their core competencies while leveraging expert services for other functions. Moreover, many quant trading firms are transitioning from in-house systems to professional Portfolio Management Systems (PMS) like 1Token. This shift is driven by the need for more efficient, cost-effective solutions that offer advanced features and reduce operational overheads. As the market matures, this trend of specialisation is likely to continue, shaping the future landscape of the crypto industry.

Which are the most significant challenges facing the industry currently and what role can technology play in helping private markets professionals – in the front and/or back office – manage them?

One of the most significant challenges in the crypto industry is the steep learning curve faced by traditional finance professionals. As they enter this new space, they often find it daunting to adapt to digital asset management. 1Token’s PMS addresses this challenge by offering a system that mirrors traditional portfolio management tools but is specifically tailored for digital assets. The familiarity of our system design helps these professionals transition more smoothly, reducing the friction associated with learning new technologies. Furthermore, the robust features of our PMS ensure that both front and back office operations are managed efficiently, helping firms stay competitive and compliant in an increasingly complex regulatory environment.

Are there ongoing or planned regulatory shifts for crypto firms to be mindful of?

Regulatory oversight in the crypto industry is intensifying, with more authorities conducting audits on large digital asset investment firms. These audits require comprehensive record-keeping and transparent audit trails to ensure full compliance. Additionally, crypto firms themselves must adhere to strict regulatory standards, including SOC2 compliance, for their technology vendors. This requirement ensures that the systems they use are secure, reliable, and capable of meeting rigorous regulatory demands. As regulations evolve, it’s crucial for firms to stay ahead by ensuring their operations and technology are fully compliant, thereby minimising risks and enhancing their credibility in the market.

1Token’s Service

Rooted from crypto quant trading, 1Token's Crypto PMS, RMS and Portfolio Accounting Software has the unique trading know-how and technology capabilities to build:

• Up-to-date and high confidence connection to all crypto trading venues, across DeFi and CeFi
• Top-down, bottom-up crypto P&L calculations, and crypto fund reconciliation of top-down and bottom-up results
• Real-time crypto trading metrics calculation, monitor and alerts tailor-made for different types of crypto funds, crypto FoFs and crypto prime brokers
• T+0 crypto shadow NAV accounting system with subscription, redemption, dividend, cost accruals

1Token has been serving global digital asset managers, crypto fund platforms, crypto fund admins and crypto auditors, to enable them to conduct crypto related business without any concern on technology. 1Token is undertaking SOC2 Type2 audit, and provides on-premise deployment to regulated clients.

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