Crypto & Digital Asset Integration

Client case studies Client Profile

Type: Private investor with global portfolio

Net Worth: USD ~15 million

Primary Location: Johannesburg, South Africa with US residency for part of the year

Core Issue: Desire to gain exposure to digital assets without compromising security, compliance, or portfolio stability

ChallengeBoth South African Reserve Bank (SARB) and US SEC/IRS regulations require careful handling of digital assets for cross-border investors. Many high-net-worth individuals are wary of operational risks and unclear tax treatment.

Strategy Implemented

Portfolio Allocation - Capped digital asset exposure at 7% of global portfolio value - Split allocation: 60% Bitcoin, 30% Ethereum, 10% regulated crypto funds & yield products

Custody & Security - Used institutional cold-storage custody through a regulated provider (Fireblocks + multi-sig wallet setup) - Insurance cover on holdings up to USD 50 million against theft/hack

Regulatory Compliance - In the US: Filed Form 8938 (Statement of Specified Foreign Financial Assets) - In SA: Declared holdings in annual tax return (ITR12) under capital gains regime - Avoided staking or lending products in jurisdictions with unclear securities classifications

Tax Strategy - Applied FIFO method for disposals in SA for clarity and SARS compliance - In US, treated gains under long-term capital gains tax after 12 months holding

Results (2-Year Period)

Crypto sleeve achieved 19% annualised return despite market volatility

Zero security breaches or loss of private keys

Fully compliant in both SA and US jurisdictions, no tax penalties

Enhanced overall portfolio Sharpe ratio by 0.28