New Tools & Best Practices in Crypto Fund Administration ......enterprises, and professional...

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Chen Fang

CEO, Lumina

New Tools & Best Practices in Crypto Fund Administration, Audit, and Accounting

Mike Quinn

CEO, Triple Leo Consulting

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SPEAKERS

Chen FangABC Charter Member, Co-Founder and CEO of Lumina

Chen is Lumina’s co-founder and CEO, where he is responsible for all facets of the

company’s product development, strategic vision, and business growth. He has over a

decade of diversified experience in fintech and the traditional technology sector,

managing and growing product organizations at Zenefits and Microsoft.

Mike QuinnFounder and CEO of Triple Leo Consulting

Mike founded Triple Leo Consulting, a full-service fund administration and operational

consulting firm focused on the alternative investment industry (including crypto asset

funds) in 2017.

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AGENDA

1. About Us

2. Overview of TX to NAV

3. Data Ingestion & Reconciliation

4. Bookkeeping & Administration

5. Applications to Audit & Accounting

6. Q&A Session

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ABOUT US

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LUMINA

Lumina is the most comprehensive crypto-native

financial operating system. Lumina offers portfolio

management, accounting & tax, and order &

execution management software for investment funds,

enterprises, and professional services firms.

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TRIPLE LEO CONSULTING

Triple Leo is an industry-leading fund administrator in the

cryptoasset space, servicing over 75 funds in total with

over 60 funds in cryptoassets. Triple Leo developed

proprietary technology in the summer of 2017 to assist

servicing the cryptoasset fund community.

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OVERVIEW OF TX TO NAV

TX LP

NAV

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DATA INGESTION & RECONCILIATION

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BUILDING BLOCKS

Supported Venues

Financial Products

Transaction Types

Pricing Data

Reference Data

Security Master

General Ledger

Chart of Accounts.. a great product

Discrepancy Resolution

Auto-Reconciliation

Manual Reconciliation

Tax Lot Computation

API Output

Reporting

Integrations

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BUILDING BLOCKS

Supported Venues

Financial Products

Transaction Types

Pricing Data

Reference Data

Security Master

General Ledger

Chart of Accounts.. a great product

Discrepancy Resolution

Auto-Reconciliation

Manual Reconciliation

Tax Lot Computation

API Output

Reporting

Integrations

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SUPPORTED VENUES

Trading

Custody

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FINANCIAL PRODUCTS

Liquid Assets

Illiquid Assets

Futures

Options

Swaps

Loans

Staked Positions

Baskets

Indices

Startups

VC Funds

Hedge Funds

ETFs

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TRANSACTION TYPES

Buy

Sell

Transfer

Transfer In

Transfer Out

Paid

Earned

Airdrop

Deposit

Withdrawal

Fork

Mined

Receive Gift

Send Gift

Theft

Lost

Symbol Change

Blockchain Migration

Borrow

Lend

Open Position

Close Position

Stake

Unstake

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INTERESTING QUESTIONS

“We placed a number of limit margin shorts with 10X leverage of a perpetual

swap contract. In the last week, how many of these contracts were filled? How

many were closed? What’s my current realized and unrealized gains? How much

did I earn or pay due to funding fees? How much did I pay in exchange fees?”

“What is my total staking income for the last month? How much in USD do I

currently have staked? How much in USD is currently unstaking?”

“What percentage of my portfolio is in illiquid holdings? Over the last quarter, of

the total net new subscriptions, what % went into illiquid holdings?”

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AUTO-RECONCILIATION

Positions Data

Reference DataPricing Data

TX

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BOOKKEEPING & ADMINISTRATION

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THE FUND ADMINISTRATOR’S ROLE

● Challenges: Obtaining usable data

● Using Lumina as a conduit to obtain the data Triple Leo needs to facilitate our functions

as the Fund Admin

● Daily Work: Booking trades, booking fund activity and perform daily cash and holdings

reconciliation

● Month-end Work: Calculation of management fee, month-end allocations, calculation

of incentive fee, providing month-end package to the investment manager and release

of investor statements

● Year-end Work: Creating and assembling the year-end audited financial statements,

providing workpapers and working closely with the fund’s auditors and tax preparers

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THE FUND ADMINISTRATOR’S ROLE (continued)

● Clear lines of communication

● Operational consultant

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APPLICATIONS TO AUDIT & ACCOUNTING

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GP / CIO / CFORequests reports

Tracks

performance

Analyzes signals

Derives strategies

Executes trades

Administrator

Pulls data

Reconciles transactions

Cuts NAVs

Sends reports

LP / Owners Receives NAVs

Tracks

performance

Understands trends

Auditor

Requests reports

Audits transactions

Verifies balances

Accountant

Requests reports

Files taxes

Fund / Enterprise

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AN ADMIN’S VIEWS ON AUDITOR PAIN POINTS

● Lack of knowledge base in crypto

● Lack of GAAP guidance

● Obtaining data in a usable format

○ Lumina can add tremendous value for auditors

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SETTING AUDITORS UP FOR SUCCESS

Finalized Reports

Reconciled Transactions

Structured Line Items

Raw API Response

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SETTING ACCOUNTANTS UP FOR SUCCESS

Lots Management

Auto-Gen Forms

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Q&A

Chen Fang

chen@lumina.app

https://www.lumina.app

Mike Quinn

mike@tripleleo.com

https://www.tripleleo.com