Digital Assets

Digital assets are cryptographic holdings such as cryptocurrencies, stablecoins, and other tokens, together with the wallets, keys, and service providers used to control them. Some families hold them directly. Others hold them through funds, trusts, or companies. The label is wide. A liquid bitcoin balance at a regulated custodian is a different operational object from a token in a self-hosted wallet whose private keys sit in one person's password manager.

They sit in the alternative investments bucket for many offices because pricing, custody, and reporting do not look like a listed equity. That is a classification, not a recommendation. Families hold digital assets for many reasons, including speculation, payments, a hedge thesis, or a founder who was paid in tokens. The office's job is to make the holding visible, controllable, and capable of surviving the people who set it up.

Ownership is a key question. In many structures the legal owner is a company or a trust, while an individual holds the keys. If those two facts are not written down, the family does not have an asset. It has a person with a secret.

Why it matters for family offices

Custody and access dominate. Who can move the coins, under what approval, and what happens if that person is incapacitated? A dual-control policy that works for a bank transfer is harder when a wallet has a single seed phrase. Qualified custodians, multi-signature arrangements, and documented recovery procedures are how serious offices close that gap. KYC and AML still apply when converting to fiat or using an exchange.

Reporting is the second gap. Prices move continuously, lots matter for tax, and some tokens generate staking or airdrop income. If digital assets are left off the net worth statement, every other allocation figure is wrong. If they are included at a screenshot price with no lot history, the tax file will fail later.

Governance belongs in the investment policy. An unapproved token bought on a personal exchange and later described as "the family's crypto" is how concentration and key-person risk arrive together.

How it shows up in practice

A next-generation family member receives tokens from a company sale. They sit in an exchange account in that person's name. The family office cannot see the balance, cannot move it, and cannot evidence source of wealth when a bank asks.

The family moves the holding into a company the office already administers, at a regulated custodian, with dual approval to withdraw. The office records cost basis, running valuation, and the exchange history that explains the source. The investment committee sets a maximum weight. The original wallet is emptied and the seed phrase retired. The asset has not changed character. It has become something the family can report, transfer, and survive.