BitGo wins US state trust charter as crypto custodian
Blockchain security specialist BitGo, which offers a multisignature bitcoin wallet services, is to launch a regulated custody service in the US state of South Dakota. BitGo currently supports over 75 cryptocurrencies and 10 blockchains.
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.
The approval enables BitGo Custody to offer secure, digital asset storage for institutional clients via 100% cold storage technology in bank-grade, Class III vaults; support for coins and tokens; institutional-grade policy controls; multi-user accounts; and 24/7 support.
“The trust company will enable us to offer a qualified custodial offering that is regulated, that has the money laundering and know-your-customer [KYC] requirements,” said BitGo’s chief compliance and legal officer, Shahla Ali. “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.”
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.
A missing link
“Custody has been the missing piece of cryptocurrency market infrastructure and this gap has kept institutional investors out of the market,” commented Mike Belshe, CEO of BitGo (left).
“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.”
California-based BitGo processes 15% of all Bitcoin transactions, as well as $15bn per month across all cryptocurrencies, its website reports. The company 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.