According to a recent article by CNBC, BitGo, a U.S. cryptocurrency wallet, and security firm have now received a state trust charter from the South Dakota Division of Banking. This means the company will soon be certified to store crypto assets for investors.
Along with Coinbase and Japan’s Nomura Bank, BitGo has announced they will be offering a crypto custody service. And, according to industry leaders, this could be a game changer for the entire industry.
Once established, the new trust company will be subject to the regulatory scrutiny that all trust companies must undergo. This means that BitGo will be required to follow Know-Your-Customer (KYC) protocols and anti-money laundering (AML) checks, as well as filing financial audits and releasing monthly disclosure statements.
As it stands, one of the most significant problems in the industry is that users are responsible for the security and storage of their crypto assets. Therefore, by creating the trust company, BitGo will be providing a solution to the problem and could lead to more people investing in cryptocurrency.
According to Mike Belsch, CEO and co-founder of BitGo, “This is the missing piece for infrastructure – it’s a treacherous environment today. Hedge funds need it; family offices need it; they can’t participate in digital currency until they have a place to store it that’s regulated.”
A Solution For Widespread Adoption
In a recent interview with CNBC, Monica Sommerville of TABB Group, said, “Institutional investors are very interested in finding a solution, but they haven’t seen one that they think is perfect for various reasons. They still self-custody, and manage all their keys.”
Sommerville also added that “Family offices and hedge funds are required by the U.S. Securities and Exchange Commission (SEC) to use a third-party regulated institution to safely store assets if they are worth over $150 million.”. Therefore, the move comes as an excellent solution to the problem and could contribute to the much more widespread adoption of cryptocurrency.
Crypto Is Coming!
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