BitGo got the go-ahead from the South Dakota Division of Banking to act as a custodian for digital assets.
Custody has been the missing piece of cryptocurrency market infrastructure and this gap has kept institutional investors out of the market,” said Mike Belshe, CEO, BitGo. “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.”
The Crypto Cold Storage Offered by BitGo
BitGo offers crypto cold storage in a bank-grade Class III vault. This means that the breach time is set at 120 minutes when comparing it with the 15 minutes for Class M and 30 minutes for Class I.
Furthermore, the BitGo service offers multi-user accounts and also supports more than 75 crypto coins and tokens. The company is required to file its financial audits on a regular basis. Moreover, the company has to comply with the state AML (anti-money laundering) and know-your-customer (KYC) rules. Additionally, the company has to submit disclosure documentation every month.
Security is of the utmost importance. Therefore, the management team of the public trust companies must submit to a fingerprint-based criminal background investigation, as well as a litigation and credit report.
In addition, the South Dakota license will be valid only within the state borders.
BitGo’s custodian system uses the existing wallet service of the company. It currently supports seven coins including Ethereum (ETH), Bitcoin (BTC), Ripple (XRP), Bitcoin Cash (BCH), ZCash (ZCash), Litecoin (LTC), and Bitcoin Gold (BTG). It also supports more than 70 ERC tokens that are available to clients with contracts.
Furthermore, at present, Coinbase and Gemini, the US cryptocurrency exchanges offer their custodian service. Bank behemoths such as Goldman Sachs and Citigroup are also preparing similar operations.
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