Tag: Cryptocurrency Custody

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Crypto News

British Security Firm G4S Emerged On The Cryptocurrency Custody Services Market

The British security firm G4S, known for its bank protection and securities transport services, announced that it would offer a new facility for the safekeeping of cryptocurrency holdings in offline vaults. The company explained, without giving many details, that its method of protecting cryptos consists of disconnecting them and then dividing them into fragments that, independently, have no value.

Dominic MacIver, a risk analyst at G4S, noted that the company’s customers had expressed concerns about a possible solution to raise the security levels of cryptocurrency holdings.

“Our security solution is based on vault storage. Not only that we disconnect the digital assets, but we also divide them into fragments that, independently, have no value. We store them securely in our high-security vaults, out of reach of cybercriminals and armed robbers,” said Dominic MacIver, Risk Analyst at G4S.

Through a press release published earlier this week on the company’s official blog, the company indicated, through its spokesman, that the arrival of crypto coins has as its objective “to redesign the fundamental architecture of money.” However, MacIver pointed out that this new panorama has come with risk situations.

British security firm G4S emerged on the cryptocurrency custody services market

In this regard, the G4S Risk Analyst, MacIver, mentioned that “the sector has attracted the same old threats as the financial systems, including thieves, swindlers, market manipulators, and many others.”

Cryptocurrency custody services have been increasing within the cryptocurrency ecosystem. Companies that make a living in this niche, as well as outside companies, are looking for an opportunity to do new business. In this new group of corporations, several announcements stand out. One of the most recent was made by the financial services firm Fidelity, which announced this week that, in 2019, it would enter the world of management services and custody of cryptocurrencies for institutions.

Among the companies in the cryptocurrency custody services ecosystem, there is BitGo, which on September 13th, received authorization to offer custody services through its subsidiary BitGo Trust. The safekeeping of cryptocurrency holdings is also common among large crypto exchanges like Coinbase.

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Crypto Markets News

Citigroup Works on a Cryptocurrency Custody Solution for Institutional Investors

The US banking group Citigroup is developing a cryptocurrency custody investment solution based on a financial product aimed at institutional investors, which will allow them to enter the crypto market at low risks, according to an unidentified source, cited by the Business Insider.

The information, published on September 9th, indicates that the new product could be a “direct way to invest in cryptocurrencies without owning them,” the sources said.

The new instrument would be called the Digital Asset Receipt (DAR), a system inspired by the American Depositary Receipt (ADR), securities that have been traded on the US stock exchange since 1920. It is a system that allows investors to access shares of foreign companies, which are not traded on US markets.

According to the information, Citigroup, one of the largest issuers of ADRs in the world, would offer large Wall Street investors a structure for trading cryptocurrencies within existing regulations, with fewer risks and a system with which they are familiar.

Citigroup plans to launch a new cryptocurrency custody investment solution

The procedure developed by the Citigroup implies that the cryptocurrencies are in possession of a custodian. Citigroup issues the DAR and informs “Depository Trust & Clearing Corp,” a Wall Street intermediary offering clearing and settlement services, about the issuance of the receipt.

“That gives it an important layer of legitimacy and gives investors a way to track the investment,” the sources said.

Citigroup is not the first regulated financial institution to try to find mechanisms to attract investors interested in cryptocurrencies. At the beginning of August, Goldman Sachs disclosed their intentions to offer custody services for cryptocurrencies funds. However, about a week ago the US financial institution reported that it would postpone these plans, due to the lack of clarity that still exists in the regulatory framework for cryptos.

As regarding the Citigroup cryptocurrency custody solution, the US SEC’s reaction remains to be seen, as well as how the big Wall Street investors will react to this proposal.

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Crypto News

Asian Fund Management Company To Launch A Cryptocurrency Custody For Institutional Investors

The Fusang Investment Office, an Asian-based fund management company is focusing on family businesses, plans to launch a cryptocurrency custody service in Hong Kong, according to the South China Morning Post on Sunday, July 22. The custody service, Fusang Vault, will maintain digital assets for clients, in addition to providing regular audits, according to Henry Chong, the company’s CEO. The service is scheduled to be launched in the fourth quarter of 2018.

In comparing digital assets to financial bonds, Chong noted the growing need to provide an independent third party to hold customers’ cryptocurrencies assets, as well as the demand for custodian banking services in conventional finance.

Chong stressed that, since the possession of digital assets lacks a record of ownership data, a cryptocurrency custody service is of “vital importance.”

Digital assets resemble bearer bonds, so whoever holds the security is presumed to be the owner and there is no record of ownership information about the security. Therefore, how we keep our digital assets protected is of the utmost importance.

Fusang Investment Office to launch a cryptocurrency custody platform for institutional investors such as Coinbase did

Fusang’s CEO added that the firm is already working with insurance companies to safeguard clients’ digital assets, without specifying the features of the next Fusang Vault service.

According to its website, the Fusang Investment Office is regulated by the Monetary Authority of Singapore and authorized by the Hong Kong Securities and Futures Commission.

In early July, Coinbase, one of the world’s largest cryptocurrency exchange platform, launched a cryptocurrency custody solution for institutional investors. The custody platform of Coinbase is operated by an independent member of the United States Financial Industry Regulatory Authority (FINRA) in compliance with the United States Securities and Exchange Commission (SEC).

In general, cryptocurrency custody solutions aim to bring in more institutional investors in the cryptocurrencies market.

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