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Ledger, Neufund Partnership Latest in Security Token Management Developments

Ledger, Neufund Partnership Latest in Security Token Management Developments

In a press release yesterday, cryptocurrency hardware wallet provider Ledger announced a partnership with blockchain-based equity fundraising platform Neufund to allow users to manage their security tokens on the Ledger desktop app.

The collaboration between Ledger and Neufund will foster a framework developed for securitized tokens, “allowing users to manage real-world assets on the blockchain while creating the safest user-experience for investors”.

Ledger CEO Eric Larchevêque said the partnership “marks a new, important chapter in bringing security tokens to the Ledger platforms”.

The current partnership is built upon an already established collaboration back in November 2017. Then, significant investors backing the Neufund Initial Community Building Mechanism were offered special editions of the Ledger Nano S.

Ledger had recently released its desktop application for crypto asset management and is moving forward with plans to add ERC-20 integration to its app. The app will allow users to manage their blockchain-based security assets through Neufund’s set of protocols.

CEO of Neufund Zoe Adamovicz said: “Currently, Ledger’s hardware wallets are the safest way to set up and manage investments conducted through Neufund’s set of protocols. With operations in the 7-9 digit (EUR) range, security becomes a top priority.”

With security tokens taking deeper roots within the cryptocurrency economy, should security tokens replace or overshadow utility tokens, the race is on to offer the most efficient securitized services to an estimated USD 10 trillion securitized tokens market by 2020.

Recently, Gibraltar Stock Exchange joined Millbrook Accord for security token interoperability. Yesterday, crypto-based fintech operator Bankex expanded its ecosystem to include security token assets trading.

In October, Neufund’s partnership with leading European crypto exchange BitBay allowed investors to purchase security tokens using fiat currencies. The announcement followed other partnerships that involved Malta Stock Exchange and Binance crypto exchange. All in the bid to becoming the first end-to-end primary issuance platform for security tokens focused on equity tokens.

On the other hand, a shift in cryptocurrency investments towards institutions has Ledger expanding shop with plans of including crypto custodian services to its service chain just after making a profit of USD 29.4 million in hardware wallet sales.

The duo further disclosed a planned legal-technical hackathon to be held in Paris, with the objectives of creating a more secure framework for managing real-world assets.

 

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Kyle Samani: Crypto Custodianship Will Release “Big Wave of Capital”

Kyle Samani, hedge fund manager at Multicoin Capital, says the final barrier stopping institutional investment was proper cryptocurrency custodianship, and over the next year investors will recognize that this barrier has finally been broken down, leading to a huge release of capital into the cryptocurrency markets.

Properly licensed and regulated cryptocurrency custodianship is essential for institutional investors like hedge funds and banks to feel safe enough to make big investments in cryptocurrency. Custodians ensure that all government regulations are followed, which is quite a complex and difficult task since regulations are constantly evolving and vary from country to country and even from city to city. Also, custodians are insured, so institutional investors that use a proper custodian don’t have to worry about hacking, theft, or sending cryptocurrency to a wrong address.

Additionally, hedge funds often give large amounts of money to their traders, and by mandating that traders use custodians, it guarantees that the traders won’t spend the money on vacations or expensive personal items. Therefore, using a custodian will give hedge funds peace of mind to expand their operations since they will be able to give their traders more freedom, since the custodian guarantees money given to cryptocurrency traders can’t be misplaced.

Multicoin Capital is using the relatively new Coinbase custody services, which only accepts deposits of USD 10 million or more and charges a fee of USD 100,000 just to set up an account, in addition to 0.1% monthly fees on deposited assets which would be USD 10,000 for the minimum deposit. Clearly, Coinbase custody services isn’t geared towards typical investors, but towards the over 100 cryptocurrency hedge funds that have been created in the last year. Coinbase CEO Brian Armstrong says that over USD 10 billion of institutional money is waiting on the sidelines of the market.

Major Bitcoin wallet BitGo acquired Kingdom Trust, a licensed qualified custodian regulated by the South Dakota Division of Banking that controls USD 20 billion of assets. BitGo is planning on merging with Kingdom Trust in order to roll out cryptocurrency custodian services. Nomura and reputable Bitcoin wallet Xapo have also launched institutional grade cryptocurrency custodian services.

Now, there are several reputable firms offering cryptocurrency custodian services for institutional investors, and if Kyle Samani is right it is only a matter of time until large amounts of institutional capital start flowing into markets to spark what could be the biggest cryptocurrency rally in history.

 

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