Workbook New Topics

Question 1

Why Crypto Custodians?

Answer 1

Rise in popularity of crypto has resulted in the need

Question 2

What does a crypto custodian do?

Give 2 examples of crypto custodians

Answer 2

Protect the keys and wallets of cryptoholders
1) Coinbase Custody
2) BitGO

Question 3

Who has shown interest in crypto custody?

Answer 3

Traditonal Custodians

Question 4

What 3 ways does crypto cusdody differ from tradition?

Answer 4

1) Security is more complex - cold storage & biometrics
2) Regulation - nascent market with less regulation -> developing and building legitimacy
3) Trasparency - more transparency needed due to complexity (transapent on process and fee)

Question 5

What does an NFT custodian do?

Answer 5

1) Protect from loss, theft and accidental deletion
2) Insure and Authenticate (help collectors)

Question 6

How are customers onboarded to crypto custodians

Answer 6

Similar to traditional

Complete KYC and AML then transfer assets / wallets to custodian

Question 7

Name the first 5 market orders

those without periods of validity, or certain quantity requirements

Answer 7

1) Limit Order
2) Market Order
3) Market If Touched
4) Opening Order
5) Closing Order

Question 8

Name the second 5 market orders

those with periods of validity, or given certain quantity requirements

Answer 8

1) Good Til’ Cancelled
2) Immediate or Cancel (fill or kill)
3) Stop Loss
4) Stop Limit
5) Day Order

Question 9

What is a limit order

Answer 9

An order to execute at a price or better

Will not fill if price unavailable

Question 10

What is a market order

Answer 10

Execute at best immediately available price

Question 11

What is a market if touched order

Answer 11

Once the price hits a certain level - the order becomes a market order

Take advantage of falling prices

Question 12

What is an opening order

Answer 12

Execute with or without a price within the first 2 mins of opening

Will be cancelled if cannot fill

Question 13

What is a closing order?

Answer 13

Same as opening but at closing

Question 14

What is a good til’ cancelled order?

Answer 14

Offer is firm until client says otherwise

Most orders are good for the day

Question 15

What is a Immediate or cancel order?

Fill or Kill

Answer 15

Execute under conditions - if not available then cancel

Question 16

What is a stop loss order?

Answer 16

Close out position at a certain price level to limit loss

No guarentee order can be closed out if thin liquidity

Question 17

What is a stop limit order

Answer 17

Stop loss with a range to execute

e.g. stop selling asset for too little if price falls below stop loss level

when share hits $50, sell at any price between $49 & $50

Question 18

What is a day order?

Answer 18

An order that is good for the day

Can be placed for the following day

Question 19

What do the REIT tax reforms aim to do?

Answer 19

Reduce the constraints of operating as a REIT

Widen the scope of businesses which can operate as a REIT

Question 20

What were the two REIT tax reforms?

Answer 20

1) A property sale within 3 years of significant developments will have its valuation price adjusted up
2) Property income distributions (PID) to partnerships are now part gross and part tax deducted

Question 21

What are the risks of cash deposits?

Answer 21

1) Inflation
2) Interest
3) Operational - poor service leads to a loss
4) Default - deposit taker defaults (large risk if deposit >£85k FSCS limit)

Cash deposits are low risk, but not risk free