#Cryptocustody

[thecryptonewshub]

Coinbase Pressures Regulators to Let Banks Hold Crypto: A Game-Changer for the Industry

Coinbase's Push for Crypto Custody by Banks Could Transform the Financial Landscape. Coinbase one of the most prominent cryptocurrency exchanges, is pushing regulators to allow traditional banks to hold and custody cryptocurrencies. This move has the potential to revolutionize the crypto industry, opening up new opportunities for investors and financial institutions alike. By seeking approval for banks to manage crypto assets, Coinbase aims to bridge the gap between the crypto market and the traditional financial world.

For years, cryptocurrencies have been viewed as a distinct, often incompatible asset class from traditional banking institutions. However, Coinbase's latest push represents a shift in this dynamic. With over 70 million customers, Coinbase is a major participant in the digital asset industry. By encouraging authorities to amend existing restrictions, they hope to create a future in which banks can provide crypto custodial services, giving a safer and more regulated means for organisations and individuals to retain digital assets. Also Read:  understanding-bid-and-ask-price-key-concepts-for-cryptocurrency-and-financial-markets The significance of cryptocurrency custody in the traditional banking system. If banks are allowed to store cryptocurrency, crypto investing will become more widespread. The primary advantage of this change is the security and trust that come with traditional banking institutions. Many institutional investors have been cautious to enter the cryptocurrency market because they are concerned about the security and volatility of digital currencies. With banks providing custody services, these investors may feel more confidence about entering the space. Furthermore, the transition may result in greater acceptance of cryptocurrencies in daily transactions. Consumers might conduct transactions with their crypto assets just as simply as they would with fiat money. Banks that provide cryptocurrency custody would ease the process and ensure that assets are protected within established financial systems. Challenges and regulatory hurdles Despite the intriguing potential, Coinbase's efforts to allow banks to retain cryptocurrency confront substantial obstacles. Regulations governing cryptocurrencies are still in their infancy, and many governments and financial institutions are wary of entering the volatile industry. In the United States, for example, the Securities and Exchange Commission (SEC) has been hesitant to issue clear recommendations for cryptocurrency investments. Furthermore, traditional banks may be hesitant to adopt cryptocurrency custody due to regulatory uncertainties and hazards involved with the digital asset market. The expense of safeguarding and insuring cryptocurrencies can also be a huge problem for banks, as they will need to invest in sophisticated infrastructure to ensure the safe handling of these assets. What Does This Mean for the Future of Crypto? If successful, Coinbase's initiatives might transform the bitcoin industry. The potential to incorporate digital currencies into the existing banking structure would result in a more unified and regulated environment for cryptocurrency investors. Furthermore, with banks acting as custodians, the crypto market may witness a decline in unlawful activity, as financial institutions must adhere to tight compliance and anti-money laundering rules. Furthermore, this transition may enhance market liquidity as more investors—both institutional and retail—feel comfortable entering the industry. It could pave the way for more widespread adoption of digital currencies as a legitimate asset class. Read the full article

[excelvisibility-blog]

Asian Asset Manager Focusing on Family Offices to Launch Crypto-Custody Solution

New Post has been published on https://masscryptocurrency.com/?p=4171

Asian Asset Manager Focusing on Family Offices to Launch Crypto-Custody Solution

Asian Asset Manager Focusing on Family Offices to Launch Crypto-Custody Solution The Fusang Investment Office, an Asia-based fund management firm focusing on family offices, is planning to launch a crypto-custody service in Hong Kong, local news outlet the South China Morning Post reports Sunday, July 22. The custody service, Fusang Vault, will hold digital assets for clients as…

The post Asian Asset Manager Focusing on Family Offices to Launch Crypto-Custody Solution appeared first on Altcoin Today.

Altcoin Today

[xrpvibe]

BBVA, Standard Chartered get into crypto-custody game

BBVA, Standard Chartered get into crypto-custody game

BBVA’s Swiss unit is preparing to launch a service for the trading and custody of digital assets, beginning with bitcoin. The Spanish giant says it is launching the service in response to growing demand from investors who are already working with digital currencies but through fintechs and other startups. It will enter the fray in January, offering all the guarantees of any other banking…

[btcmemes]

Most women want to go shopping and eat tacos. At least in my limited experience. We all want bitcoin at ATH though. 🤓 #cryptogosling #thenotebook #rachelmcadams #memes #ryangosling #cryptocustody #cryptoworld #cryptowear #ilovecrypto #cryptotrading #cryptocurrencies #cryptocurrencys (at T-Mobile Arena) https://www.instagram.com/p/CF4u_o0g9xl/?igshid=fpry2p92f7g2

[crypscrow]

#dailycryptoupdate #cryptonews #crypscrow #cryptoponzi #nocashnopayout #sec #finra #cryptocustody #cryptorally #bch #bnb #eos #trx #facebook #libra #backlash #beijing #wechat #cryptocurrency #indianpolice #specialtraining #scam https://www.instagram.com/p/Bzr6iAWgT50/?igshid=hc18qur8sis0

[cryptostore-blog]

✅Towo Labs Suggests Update To Trezor And Ledger Wallets✅

Ripple has emerged as a blockchain firm that has welcomed numerous allies into its expanding field of influence in the blockchain industry. Also, the firm has reached as far as contributing financial assistance to technology startups centred on blockchain development, notably those interested in forming more use cases for Ripple's XRP and popularizing the cryptocurrency asset. One such development team is Read More 

#TowoLabs #Trezor #LedgerWallets #Ripple #BlockchainFirm #Blockchain #BlockchainIndustry #TechnologyStartups #BlockchainDevelopment #RippleXrp #CryptocurrencyAsset #CryptoCustody #CryptoStash #DigitalCurrencies #CryptoExchanges #InterlegerSystems #XrpLedger #MarkusAlvila #Trezor #Ledger #TrezorCryptocurrencyWallets #CryptoWhales #CryptocurrencyStorage #ColdWallets #HotWallets

[legacylife365]

#NewYork Gives #Coinbase Green Light to Offer #Regulated #CryptoCustody https://www.ccn.com/new-york-gives-coinbase-green-light-to-offer-regulated-crypto-custody/ https://www.instagram.com/p/BpU6AUelv95/?utm_source=ig_tumblr_share&igshid=6ak15tbo2wcp

[detikdax-blog]

Op-Ed: Bagaimana Teknologi Air Gap Memiliki dan Akan Mengamankan Aset Cryptocurrency Kami

Yang benar adalah bahwa apa pun yang terhubung ke internet dapat diretas. Namun, peretasan tidak selalu menjadi masalah.

Sejarah Teknologi Air Gap

Data digunakan untuk disimpan offline, dalam apa yang sekarang dikenal sebagai cold storage. Data pada kartu kertas eksternal, kemudian dipindahkan ke tape dan media digital seiring berkembangnya teknologi. Komputer pertama yang dibangun secara default pada penyimpanan dingin atau teknologi 'celah udara'. Bahkan ketika jaringan awalnya dibangun, banyak data masih harus terhubung secara manual ke sistem dengan menambahkan media ke perangkat. Pada hari-hari awal, kode dan informasi sensitif disimpan terkunci di brankas yang dapat diakses oleh individu yang berwenang atau dalam beberapa kasus, oleh banyak orang yang diminta untuk masuk secara bersamaan. Pendekatan ini adalah asal-usul otorisasi multi-tanda tangan. Akhirnya, dengan penemuan internet, komputer-komputer itu dan data itu dapat dihubungkan ke jaringan luar, di seluruh dunia. Konsep di mana internet dibangun memiliki beberapa prinsip dasar keamanan di dalamnya, tetapi pertukaran data dan kemudahan melakukan hal itu sangat penting dalam arsitektur asli web. Lembaga-lembaga sensitif lambat untuk menambahkan data mereka yang paling penting ke internet, dan semua lembaga militer yang penting pada awalnya bergantung pada celah udara manual, di mana perintah dikirim ke seseorang yang akan mengambil perangkat data dari brankas dan menghubungkannya ke mesin untuk waktu singkat di mana mereka perlu digunakan. Beberapa institusi masih mengandalkan metode ini. Militer Rusia terkenal dengan ketergantungannya yang terus menerus pada mesin tik untuk beberapa dokumen mereka yang paling sensitif - jika tidak pernah digital, tentu saja jauh lebih sulit bagi musuh Anda untuk mendapatkan tangan mereka di atasnya. Nilai teknologi celah udara tak tertandingi dalam kemampuannya untuk menyembunyikan data dari pencurian digital; Namun, tidak dapat diaksesnya selalu menjadi kekurangannya. Dengan lembaga yang menggunakan teknologi selama perjalanan sejarah, memiliki tenaga fisik di tangan untuk me-mount drive online pada saat itu tidak menjadi masalah, tetapi aplikasi perusahaan dari teknologi ini memerlukan beberapa otomatisasi dari proses tersebut untuk skala dan melayani kebutuhan jutaan pelanggan secara bersamaan. Namun, bagaimana menjembatani kesenjangan itu tanpa sistem sedang online? Faktanya adalah bahwa dengan penemuan baru-baru ini, interaksi manusia, dan risiko keamanan yang dihasilkan, titik-titik kontak tersebut tidak lagi diperlukan untuk menutup celah udara secara jarak jauh.

Aplikasi Air Gap di Crypto Custody

Individu telah menyimpan data sensitif pada perangkat penyimpanan dingin selama beberapa dekade.��USB thumb drive di mana-mana di seluruh masyarakat hari ini, dan penggunaannya untuk menyimpan kunci cryptocurrency mulai segera setelah mata uang pertama kali ditemukan. Selama bertahun-tahun, kerumitan drive ini telah berevolusi, dan sekarang dompet penyimpanan dingin seperti Ledger atau Trezor adalah keharusan bagi investor independen yang lebih kecil. Namun, drive ini bukan solusi yang layak untuk investor yang lebih besar yang membutuhkan akses cepat ke dana mereka tetapi yang tidak ingin mengambil risiko karyawan membawa sekitar kode mereka. Selain itu, untuk lembaga lubang menganga dalam keamanan perangkat ini, dan penerapannya terhadap kebutuhan global klien mereka membuat mereka tidak berguna. Mulai tahun 2013, penyedia hak asuh kelas institusi datang ke pasar untuk menyediakan penyimpanan offline aset digital. Di antara yang pertama adalah Xapo , kelompok yang fokus melayani kebutuhan pemegang cryptocurrency jangka panjang. Xapo membangun kubah di dalam pegunungan untuk penyimpanan dingin jangka panjang. Sejak berdirinya perusahaan ini, banyak lembaga lain yang menawarkan cold storage yang mendalam telah memasuki pasar. Baru-baru ini, si kembar Winklevoss mengumumkan paten berbasis cryptocurrency di ruang celah udara, meminjamkan lebih banyak kredibilitas untuk aplikasi teknologi. Solusinya semua bergantung pada kombinasi kode pada media digital atau fisik (kertas atau lainnya) berkoordinasi dengan beberapa solusi kubah. Opsi ini bagus jika Anda tidak perlu mengakses kunci Anda untuk melakukan perdagangan; Namun, perdagangan adalah kunci untuk melakukan bisnis. Semua solusi ini memiliki masalah yang sama yang telah menjengkelkan investor institusional selama bertahun-tahun - sepenuhnya mengunci mereka keluar dari pasar dalam banyak kasus - dan masalah itu adalah aksesibilitas. Solusi khas, seperti Xapo, membutuhkan pemberitahuan 2 hari untuk membawa kunci Anda secara online secara manual agar Anda dapat melakukan transaksi. Penundaan ini berarti solusi ini tidak dapat memenuhi kebutuhan investor aktif yang membutuhkan akses pada pemberitahuan sesaat. Selain itu, titik interaksi manusia tambahan merupakan risiko signifikan terhadap data.

Keamanan Jarak Jauh Udara Otomatis (RAAS)

Pada awal 2017, Tony Hasek, salah satu pendiri, Goldilock bekerja dengan perusahaan yang menawarkan penyimpanan dingin untuk aset fisik - kebanyakan logam mulia. Dia telah berdagang cryptocurrency selama bertahun-tahun dan khawatir tentang pelanggaran konstan yang diderita oleh bahkan institusi terbesar, dimulai dengan Mt. Gox kembali pada tahun 2011. Tidak ingin membawa kode di sekitar, ia mulai berpikir tentang cara untuk menjaga mereka offline menggunakan beberapa konsep penyimpanan dingin yang sama dikombinasikan dengan beberapa teknologi analog dia bekerja dengan kembali di tahun 90-an. Menggabungkan kekuatan dengan co-founder-nya Jarrod Epps, yang juga bekerja dengan solusi telepon analog, keduanya berkolaborasi selama beberapa bulan untuk membangun arsitektur yang akan memungkinkan semua data disimpan secara offline dalam celah udara yang berkubah, penyimpanan dingin sampai saat yang tepat pemilik data ingin membawanya online (juga dikenal sebagai 'panas'). Dengan mengandalkan kombinasi teknologi offline legacy yang canggih sebagai mekanisme pemicu untuk node data jarak jauh on / offline, bersama kriptografi mutakhir dan gerbang biometrik, dan menambahkan opsi untuk persetujuan multi-sig jarak jauh, keduanya mengajukan paten untuk cara unik untuk mengakses data yang disimpan dingin pada saat itu juga. Juga, mereka membangunnya dengan cara yang begitu sederhana dan aman sehingga siapa pun yang memiliki telepon seluler dapat menggunakannya. Teknologi RAAS baru ini (diucapkan 'ras') memungkinkan siapa pun untuk mengakses data mereka kapan saja dari mana saja ia memiliki telepon seluler atau telepon rumah.

Raas ke Masa Depan

Teknologi celah udara yang dapat diakses dari jarak jauh benar-benar transformasional untuk penanganan semua data di internet. Lembaga seperti bank, lembaga pemeringkat kredit, grup distribusi video, pengembang perangkat lunak, penjaga catatan kesehatan, dana crypto, penjaga kripto, dan pertukaran kripto semuanya telah mencapai daftar tunggu untuk menggunakan teknologi ini. Di luar ruang cryptocurrency, dapat bank, mengelola data kredit, informasi kesehatan dengan aman, bahkan foto dan video pribadi akan mengubah cara konsumen berinteraksi dengan internet, memungkinkan mereka untuk melakukannya tanpa takut hacking, pencurian identitas, atau pembajakan dari mereka kredit. Read the full article

[virtualcurrencyspace]

Crypto Custody Solutions Rather Than ETFs May Usher Institutional Funds Into The Virtual Currency Space

Hence, whether it is Bitcoin ETFs, ETNs, or custody solutions, the earliest period in which publicly tradable instruments will be released to the public would be in 2019.

Most recently, Sweden-based XBT Provider expanded its Bitcoin ETN to US markets. Less than a month since its launch in the US, the Bitcoin Tracker One ETN was suspended by the US SEC.

Once institutional products hit the market and pension funds, hedge funds, and large-scale conglomerates take interest in cryptocurrencies as stores of value that are not dependent on the broader financial market, a large sum of capital will flow into the cryptocurrency market via custody solutions.

The optimism expressed by billionaire investor Mike Novogratz towards the next mid-term rally of cryptocurrencies that could potentially be triggered by the entrance of institutional investors have increased the interest towards robust crypto custodian solutions over ETFs, which are highly unlikely to be approved by the SEC in the months to come.

https://www.ccn.com/citigroup-is-the-latest-bank-to-offer-crypto-custody-heres-how-it-will-affect-the-market/

[grizzlemedia-blog]

Goldman Sachs Pushing the Pause Button on Crypto Trading Desk

According to a Business Insider article (paywall) yesterday, Goldman Sachs has shelved plans to create a long rumoured crypto trading desk. The news yesterday may have been one of the catalysts for a wide-scale sell-off in crypto markets with Bitcoin losing close to 13% over the course of the day and most other crypto assets following suit. The Wall Street bank has been rumoured to be working on opening up a crypto trading desk since the heady crypto bull market in late 2017. Those rumours resurfaced in late April 2018 as Goldman hired Justin Schmidt to be the first head of digital asset markets. However, the company has kept their cards close to the vest with regards to their plans for crypto with few public statements involving any details. Even after the news broke yesterday, company spokeperson Michael DuVally's statement to Reuters was markedly cagey:

Goldman Reportedly Prioritizing Custody over Crypto Trading Desk

The Business Insider article cites 'people familiar with the matter' painting a picture of the bank having lowered its priority in creating a crypto trading desk and instead focusing on a crypto custody solution for the time being. Custodial solutions in crypto may be one of the prerequisites for large institutional investments and trading in crypto for large institutions regardless. Unlike the average crypto investor who can store their assets on a crypto wallet, for a bank or financial institution to trade crypto assets they will need a more robust custody. The change in tack towards custody also provides the bank more time to wait for the regulatory environment around institutional trading of crypto assets to become clearer. For Goldman to prioritize development of a custody offering before opening a full-fledged crypto trading desk makes a lot of sense and may have been the plan all along. Regardless of the Wall Street bank's longer term strategy for crypto, the news yesterday certainly appeared to impact the crypto markets.  

The Crypto Bears Jumped on the News

After Bitcoin prices had climbed back to over $7,300 from mid-August lows of just under $6,000, yesterday nearly all of those gains were wiped out. Over the course of the day Bitcoin lost nearly 13% of it's market value closing around $6,400. Bitcoin Price For September 5, 2018

All times Eastern; Data Source: https://bitcoincharts.com/ It wasn't just Bitcoin that saw wide-scale sell-offs yesterday — many of the top coins dropped significantly in price. Given that most trading in other coins such as Ethereum, Ripple, Bitcoin Cash, and EOS tend to be traded against Bitcoin the overall trend wiped out a huge amount of market capitalization for many of the top coins. Also, as of now most of the crypto market is highly correlated to Bitcoin not only because of the trading pairs, but also because its price tends to represents the overall sentiment on cryptocurrencies as a whole. Despite the ongoing volatility crypto markets face, the drop of over 10% is an extreme reaction to a news story based on unnamed sources of a single financial institution delaying plans for a crypto trading desk.

Are Crypto Markets Being Manipulated?

The large price movement in crypto markets yesterday has prompted some to wonder whether the markets are being manipulated. On September 2, just two days prior to the Business Insider article about Goldman's crypto trading desk, there was a large increase in Bitcoin short positions. In the span of about 3 hours, short positions on crypto exchange Bitfinex jumped by 10,000 BTC (worth around $74 million). Speculation is that someone with inside information about the impeding Goldman news took out the massive short position and would be able to profit from the inevitable price drop. Bitcoin Short Positions on Bitfinex for September 2, 2018

Source: Trading View Further to that, a CCN article outlines some of the unusual activity just prior to the sell-off seen in crypto markets tracked by Artificial Intelligence (AI) based RoninAi. The article raises some questions about spikes in 'social sentiment' (a measure of social media activity) which occurred just prior to the price drop. The speculation here is that those behind the $74 million short position could have magnified the price action on the news through social sentiment manipulation. As the dust has settled today on crypto markets some have called into question whether the 'people familiar with the matter' who spoke with Business Insider were actually familiar with anything going on at Goldman Sachs. https://twitter.com/IamNomad/status/1037682460157534208 So if everything at Goldman is business as usual with regard to the crypto trading desk, one begins to wonder when the nascent crypto markets will mature enough to realize the long-term value of crypto assets and stop jumping at shadows. Read the full article

[cryptobitnews]

Asian Asset Manager Focusing on Family Offices to Launch Crypto-Custody Solution The Fusang Investment Office, an Asia-based fund management firm focusing on family offices, is planning to launch a crypto-custody service in…

[coincolumnist-dot-com]

Fireblocks faces lawsuit over deleted keys to $72M Ether wallet

Crypto-custody firm Fireblocks is facing legal action by a firm that claims it was locked out of its wallet containing a substantial amount in crypto assets.Crypto staking platform StakeHound claims that negligence by a Fireblocks employee resulted in tens of millions of dollars worth of crypto assets being lost without any backup available. Fireblocks is an Israeli-based company that provides custody services for businesses and which is working on speeding up digital transactions.StakeHound filed the lawsuit at the Tel Aviv District Court on June 22 claiming damages for the lost assets. The wallet in question contained 38,178 ETH, equating to more than $72 million at the time.The court was told that a Fireblocks employee allegedly failed to protect or backup the private keys to the wallet, which were subsequently deleted preventing StakeHound from accessing its assets. In a statement, StakeHound claimed:“This is a human error committed by an employee of the defendants, who worked in an unsuitable work environment, did not protect or back up the defendant's private keys needed to open the relevant digital wallet, and for no apparent reason, the keys were deleted, preventing the plaintiff's digital assets from being accessed,”According to a report in the Israeli media, the company entrusted with backing up the private keys, Coincover, reportedly received the keys but could not check if they could open the wallet due to a confidentiality agreement.Related: Fireblocks crypto startup raises $133M in funding round with BNY MellonFireblocks has denied any negligence and said the private keys were generated by the client and stored outside the platform, adding that “the customer did not store the backup with a third-party service provider per our guidelines.”In a statement on its website, Fireblocks further explained that it cooperated with a request from StakeHound in December 2020 to create a set of “BLS key shares” related to an ETH 2.0 staking project. BLS is the Boneh–Lynn–Shacham cryptographic signature scheme that allows a user to verify that a signer is authentic.On April 29, the Fireblocks team conducted a regularly scheduled disaster recovery drill and discovered that a set of BLS key shards from the backup could not be decrypted, concluding that the customer had never backed them up.“No Fireblocks production keys were ever affected, and all Fireblocks customers’ funds are safe, and customer keys are backed up and recoverable,” it stated, adding that it was actively investigating the situation pending a response from the District Court. Source Read the full article

[jacobhinkley]

Crypto Custody Poses Barrier to Institutional Investment

Cryptocurrency analysts are increasingly arguing that the lack of custody services provided by leading players from within the finance industry pose a significant barrier to institutional investors seeking exposure to the cryptocurrency markets.

Also Read: Policy Easing, New Crypto Classification in South Korea

Lack of Crypto Custody Services Comprises Serious Issue for Institutional Investors

A number of finance professionals have argued that a lack of cryptocurrency services being offered by institutional custodians poses a significant barrier to widespread institutional investment in the virtual currency sector.

Blake Estes of Alston & Bird LLP stated “For chief investment officers, there’s only downside risk in cryptocurrency,” adding that it “would take a leap of faith with a new custodian with no brand recognition. That presents a real risk for them,” during a recent interview with Pensions & Investments. 

Mr. Estes of Alston & Bird shares this opinion, stating that “So much of the security of bitcoin and other cryptocurrency rests with who stores that private key, who controls the vault. Blockchain (the technology behind the transfer of assets) itself can’t be hacked, but it all still boils down to who ends up holding the keys. I’d tend to think that pension funds will not venture into uncharted territory until they’re certain about the security of who has custody of the keys.”

Analysts Argue Cryptocurrency Sector is Not Yet Developed Enough for Institutional Custodians

Mark Kinoshita, senior vice president of Callan LLC, believes that the virtual currency industry is still a long way from witnessing institutional custodians offering services to cryptocurrency investors.

“I don’t know that (custodians) are focused on cryptocurrency; I think they’re more focused on blockchain and distributed ledger technology and their use in operations. They’re joining consortiums that are looking at uses in things like cross-border services, clearing, and settlements. Rather than comment on cryptocustody, they’re working with partners in fintech and insurance firms to determine applications of blockchain and (distributed ledger technology) to streamline clearing and settlement processes. They’re still at the exploration stage,” Mr. Kinoshita said.

John Lore, managing partner, Capital Fund Law Group PC, New York, agrees that the cryptocurrency sector is not yet developed enough for institutional custodians, stating “it’s really too soon to determine what cybersecurity risks will need to be dealt with, there aren’t enough custodians who are capable of handling that risk yet. […] If you want a long-term storage of assets in a digital wallet, there are regulatory ways of doing that, but none that are recognized across the large custodians, Once there, it’s an asset that’s very easy to lose, through computer failure or hacking. At the core, that’s a major risk issue.”

“Vicious Cycle” of Custodianship in Crypto

Jonathan Benassaya, founder and CEO of IronChain Capital, attributes the lack of institutional custodianship in the cryptocurrency sector to “vicious cycle” in which “Investors want the infrastructure from custodians,” however, “custodians want investors before they build the infrastructure.”

Despite such, Mr. Benassaya expects that custodians “are not so far” from entering the cryptocurrency industry, stating “You read about cryptocustody because of general news about data hacking and security. They want it safely stored in a vault, like gold. […] The level of custody in crypto is the same as with other assets, except that crypto is self-cleared through the blockchain. Custodians are not so far away from making this happen.”

Do you agree that a lack of trusted custodians providing services to cryptocurrency investors poses a significant barrier to widespread institutional investment in virtual currencies? Share your thoughts in the comments section below!

Images courtesy of Shutterstock

At Bitcoin.com there’s a bunch of free helpful services. For instance, have you seen our Tools page? You can even lookup the exchange rate for a transaction in the past. Or calculate the value of your current holdings. Or create a paper wallet. And much more.

The post Crypto Custody Poses Barrier to Institutional Investment appeared first on Bitcoin News.

Crypto Custody Poses Barrier to Institutional Investment published first on https://medium.com/@smartoptions

[bowsetter]

Crypto Custody Poses Barrier to Institutional Investment

Cryptocurrency analysts are increasingly arguing that the lack of custody services provided by leading players from within the finance industry pose a significant barrier to institutional investors seeking exposure to the cryptocurrency markets.

Also Read: Policy Easing, New Crypto Classification in South Korea

Lack of Crypto Custody Services Comprises Serious Issue for Institutional Investors

A number of finance professionals have argued that a lack of cryptocurrency services being offered by institutional custodians poses a significant barrier to widespread institutional investment in the virtual currency sector.

Blake Estes of Alston & Bird LLP stated “For chief investment officers, there’s only downside risk in cryptocurrency,” adding that it “would take a leap of faith with a new custodian with no brand recognition. That presents a real risk for them,” during a recent interview with Pensions & Investments. 

Mr. Estes of Alston & Bird shares this opinion, stating that “So much of the security of bitcoin and other cryptocurrency rests with who stores that private key, who controls the vault. Blockchain (the technology behind the transfer of assets) itself can’t be hacked, but it all still boils down to who ends up holding the keys. I’d tend to think that pension funds will not venture into uncharted territory until they’re certain about the security of who has custody of the keys.”

Analysts Argue Cryptocurrency Sector is Not Yet Developed Enough for Institutional Custodians

Mark Kinoshita, senior vice president of Callan LLC, believes that the virtual currency industry is still a long way from witnessing institutional custodians offering services to cryptocurrency investors.

“I don’t know that (custodians) are focused on cryptocurrency; I think they’re more focused on blockchain and distributed ledger technology and their use in operations. They’re joining consortiums that are looking at uses in things like cross-border services, clearing, and settlements. Rather than comment on cryptocustody, they’re working with partners in fintech and insurance firms to determine applications of blockchain and (distributed ledger technology) to streamline clearing and settlement processes. They’re still at the exploration stage,” Mr. Kinoshita said.

John Lore, managing partner, Capital Fund Law Group PC, New York, agrees that the cryptocurrency sector is not yet developed enough for institutional custodians, stating “it’s really too soon to determine what cybersecurity risks will need to be dealt with, there aren’t enough custodians who are capable of handling that risk yet. […] If you want a long-term storage of assets in a digital wallet, there are regulatory ways of doing that, but none that are recognized across the large custodians, Once there, it’s an asset that’s very easy to lose, through computer failure or hacking. At the core, that’s a major risk issue.”

“Vicious Cycle” of Custodianship in Crypto

Jonathan Benassaya, founder and CEO of IronChain Capital, attributes the lack of institutional custodianship in the cryptocurrency sector to “vicious cycle” in which “Investors want the infrastructure from custodians,” however, “custodians want investors before they build the infrastructure.”

Despite such, Mr. Benassaya expects that custodians “are not so far” from entering the cryptocurrency industry, stating “You read about cryptocustody because of general news about data hacking and security. They want it safely stored in a vault, like gold. […] The level of custody in crypto is the same as with other assets, except that crypto is self-cleared through the blockchain. Custodians are not so far away from making this happen.”

Do you agree that a lack of trusted custodians providing services to cryptocurrency investors poses a significant barrier to widespread institutional investment in virtual currencies? Share your thoughts in the comments section below!

Images courtesy of Shutterstock

At Bitcoin.com there’s a bunch of free helpful services. For instance, have you seen our Tools page? You can even lookup the exchange rate for a transaction in the past. Or calculate the value of your current holdings. Or create a paper wallet. And much more.

The post Crypto Custody Poses Barrier to Institutional Investment appeared first on Bitcoin News.

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[crypscrow]

#dailycryptoupdate #cryptonews #crypscrow #cryptoplunge #fundamentals #healthy #coinbase #wallstreet #cryptostaking #legder #legacy #cryptocustody #instutionalinvestors #sec #cryptostreak #postponing #bitwise #etf #cp #omise #acquisation https://www.instagram.com/crypscrow/p/BvnsRaMg5KU/?utm_source=ig_tumblr_share&igshid=ou5ekztpxo8a