The South Dakota Division of Banking has approved BitGo Trust Company to serve as a public trust company in the state and qualified custodian for digital assets, according to a press release.
Filling a Missing Piece of Crypto Market Infrastructure
Through the approval, BitGo Custody will be able to offer secure, digital asset storage for institutional clients through 100 percent cold storage technology in bank-grade, Class III vaults; support for 75-plus coins and tokens; institutional-grade policy controls; multi-user accounts; and 24/7 support.
In an interview with Coindesk, Shahla Ali, chief compliance and legal officer at BitGo, expanded on its offerings:
“The trust company will enable us to offer a qualified custodial offering that is regulated, that has the money laundering and know-your-customer requirements. Our custodian offering already has money laundering and KYC requirements … [but the trust is] for institutional clients. … Especially for those who are registered advisers and broker-dealers.”
Additionally, BitGo Custody will provide low setup and assets under custody (AUC) fees, and after one year, consumers may qualify for fee credit if their AUC balance is equal to or greater than it was in the 12-month period, per the press release.
Mike Belshe, CEO of BitGo, said:
“Custody has been the missing piece of cryptocurrency market infrastructure and this gap has kept institutional investors out of the market. Traditional custodians don’t have experience handling cryptocurrency. Exchanges that double as custodians present a conflict of interest and raise regulatory concerns. BitGo Trust Company is a qualified custodian, and therefore, the only custody offering that delivers the highest levels of both security and regulatory compliance.”
Headquartered in Palo Alto, Calif., BitGo is an institutional-grade investment service that provides institutional investors with security, compliance and custodial solutions for cryptocurrencies. The company processes 15 percent of all Bitcoin transactions, as well as $15 billion per month across all cryptocurrencies, according to its website.
Per Bitcoin Magazine, BitGo will not store assets under the trust until a 30-day period has elapsed, in accordance with South Dakota law, which has 30 days to file an appeal against the decision.
And while BitGo isn’t the first crypto company to offer custody services, it is the first regulated custody offering built specifically for storing digital assets. Coinbase and Gemini, for example, launched custody solutions to attract institutions investors to the market. Financial institutions like Goldman Sachs, meanwhile, are also reportedly intending to debut similar services.
Cover Photo by Bryan Minear on Unsplash