THE SITUATION:

In recent years, cryptocurrency has presented an exciting opportunity to invest in a new asset class—at the cost of accepting certain risks. Unlike traditional financial assets, cryptocurrency has lacked legal protection and clarity around federal and state regulatory oversight.

As a result, the cryptocurrency industry has been plagued by impropriety, malfeasance and even outright theft. Without confidence that they could safely secure and efficiently manage these assets, many investors and their professional advisers have avoided investing...