BitGo Receives Regulator Green Light to Provide Crypto Custody Services

BitGo, a provider of cryptocurrency security services, announced this Friday that it has received approval to operate as a trust company. According to a company statement, the South Dakota Division of Banking has approved BitGo Trust Company as a public South Dakota Trust Company.

“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 of BitGo, “BitGo Trust Company is a qualified custodian, and therefore the only custody offering that delivers the highest levels of both security and regulatory compliance.”

Having received the requisite regulatory approval, BitGo Trust Company is now the first purpose-built custodian providing storage services for Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term. Given the company’s history, this won’t come as a surprise to many.

BitGo - King of Crypto Custody

Founded in 2013 by former Google engineer Mike Belshe, BitGo has been targeting the institutional cryptocurrency market for five years now. Among other things, the firm has been offering private Blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tampe Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tampe Read this Term access and institutional cryptocurrency wallets to its clients.

The new custody service will allow institutional cryptocurrency traders to keep their digital assets offline, and away from hackers’ prying eyes, in cold storage. Alongside this, BitGo will provide “institutional-grade” policy controls.

Custody has been an ongoing problem for the cryptocurrency market. More traditional custodians have been unwilling or unable to provide their services to cryptocurrency firms. At the same time, exchanges don’t always have the expertise to provide custody services either.

“Traditional custodians don’t have experience handling cryptocurrency.” Noted Belshe, “Exchanges that double as custodians present a conflict of interest and raise regulatory concerns.”

In its statement today, BitGo did not confirm how much its custodian services would cost cryptocurrency firms. It noted only that its setup and assets under custody (AUC) fees would be low. The custody services provider also noted that AUC fees could be reduced if a company’s AUC balance is equal to or greater than it was during the prior 12-month period.