In a recent Toolbox memorandum (Memo), the Standards Board for Alternative Investments (SBAI) pointed out that digital assets “operate using different infrastructure than more traditional asset classes” and, as a result, present different risks for investors and managers. The Memo discusses operational due diligence on managers that invest in digital assets with respect to investment mandates, custody, trading, valuation, asset verification, conflicts of interest, regulatory risk, anti-money laundering and other risks, with reference to the relevant SBAI Alternative Investment Standards. This article explores the key takeaways from the Memo, with commentary from Karl Cole‑Frieman, partner at Cole‑Frieman & Mallon, and Genna N. Garver, partner at Troutman Pepper. For more recent guidance from SBAI, see “SBAI Issues Culture and Diversity Strategies Framework” (Nov. 18, 2021); our two-part series “Navigating Indemnification and Exculpation Provisions in Fund Documents”: Part One (Aug. 26, 2021); and Part Two (Sep. 9, 2021); as well as our two-part series on the SBAI Responsible Investment Policy Framework: “Four Ways to Incorporate Into Investment Strategies” (Apr. 15, 2021); and “Three Key Considerations for Fund Managers” (Apr. 22, 2021).