Crypto asset custody solution provider BitGo has received a license giving it the status of a qualified custodial bank for storing cryptocurrency. It took the company a year to obtain official permission, and for another 30 days from the date of receipt of permission, BitGoTrust will not be able to begin storing digital assets.
BitGo CEO Mike Belshe believes that the lack of a secure depository on the market for regulated crypto assets is causing large investors to ignore the promising crypto system, limiting their financial interests in this area.
BitGo offers a regulated digital asset vault that uses multi-signature for security and follows a mandatory AML/KYC policy. In addition, the license required BitGoTrust to undergo audits and provide monthly financial reports.
This important piece of infrastructure, targeting certified financial institutions or hedge funds, will help satisfy SEC requirements for the safe custody of assets worth over $150 million. Hardware wallets are suitable for small volumes of retail investors, while large investors and funds are delaying entry into the market due to the lack of a secure place to store assets.
BitGo will offer cold storage services and will soon become a broker-dealer, allowing serious investors to avoid risky trading on crypto exchanges, which are often not monitored by regulators and for which custodial services may pose a conflict of interest. According to the CEO, BitGo is doing everything necessary to become a service for qualified storage of digital assets.
However, BitGo is not the only company focused on creating conditions for large players. The number of competitors for the trust of large investors is constantly growing. Coinbase has already launched Coinbase Custody service for institutional investors from the US and EU and plans to expand into the Asian market.
Morgan Stanley is preparing its own digital trading platform. A new solution for a cryptoasset depository being developed by the Japanese Nomura Bank will also add intense competition.
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