The hugely popular online crypto service provider BitGo recently announced approval by South Dakota regulators to operate a custodial service for digital assets. BitGo attempted for the better part last year to offer regulated custodial services to their clients. The company were unable to achieve the proper licensing until September 2018. Now, BitGo seeks to bring a more traditional wealth management approach to the forefront of the cryptomarket.
Digital Asset Custodial Services
BitGo currently offers its clients a host of services including wallets, regulated custody services, and enterprise blockchain solutions. Clients have access to both online (hot) and offline (cold) storage options. As these services are now regulatory compliant, they can provide certain protections that major investors, financial firms, and businesses seek.
In order to achieve this higher level of protection, the firm created the BitGo Trust. This trust operates in a fully regulated manner and is compliant in South Dakota to the current anti-money laundering (AML) and Know Your Customer (KYC) protocols.
BitGo Trust allows, for the first time, registered advisors and broker-dealers a safer entry point into the digital market. In the past, large crypto investors were forced to hold their crypto personally. This situation leaves digital asset holders in a tricky predicament where they are fully responsible for protecting their assets from would-be criminals, both online and offline.
Protecting Your Crypto
The lack of regulations prior to this point created some unexpected side effects. For one, this lack of protections helped spawn a growing crypto insurance market. Those holding large amounts of crypto can now pay a fee to any of the many crypto insurance companies to keep their hard-earned Satoshis safe. BitGo even provides these services.
Putting trust into digital currencies: CSO @tompageler details what BitGo's insurance policy covers and how it’ll protect your assets in the event of an incident: #digitalcurrencies #cryptocurrency #custody
— BitGo (@BitGo) February 19, 2019
These firms offer large investors more protection. Unfortunately, many of these companies are not a realistic option for medium and small-sized crypto investors due to their fee structure.
Rise In Thefts
As Bitcoin prices rise, so do the number of thefts within the market. Aside from your traditional hackers, scammers, and fraudsters, you now see a growing number of armed robberies. In one such incident, a Dutch crypto investor was tortured with a power drill in an attempt to get him to reveal his private keys. BitGo recognized the growing dangers surrounding large scale crypto investments. The firm believes it can provide the cryptocommunity with a safer and more cost effective solution than what's currently available
BitGo developed its custodial services from the ground up. This approach to the market is unique. It's the first time a regulated custodial service specifically designed for digital assets is available to investors. BitGo's chief compliance and legal officer, Shahla Ali, recently spoke on the matter. She explained how the new platform is unlike anything currently in existence.
Ali explained that BitGo hopes to build their platform out in a manner that shows both customers and regulators that digital asset custodial services are a crucial part of the marketplace. She hopes that the new services will entice more traditional investors to enter the market. Analysts continually point out a lack of traditional investment capital as one of the main hindrances to large scale crypto adoption. BitGo may have found the answer to this issue.
BitGo is now in a position to help guard large scale investors in the market store their assets in a more secure and familiar manner. If BitGo is successful in its efforts, you could see the firm catapulted to the forefront of the digital economy. For now, it’s a smart move to monitor this platform as it develops.