Category Archives: custody

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Crypto360 Exclusive: Inheritance, Custody – Crypto Deserves Same Protection as Traditional Assets

Crypto360 Exclusive: Inheritance, Custody – Crypto Deserves Same Protection as Traditional Assets

As the blockchain and cryptocurrency industries mature, firms are beginning to use the technologies to create increasingly sophisticated alternatives to mainstream financial services. Beyond cryptocurrency exchanges, startups have created solutions for cryptocurrency loan services and futures trading, with many expected to see a Bitcoin exchange-traded fund in action later this year.

Based in Italy, Crypto360 is one such company offering an innovative finance solution as a digital currency custody provider. The project has two main selling points: 1) it offers a legally compliant platform to administer digital currency inheritance and 2) it provides a custody solution suitable for institutional and retail traders alike.

Ivan Rossi, who works at the company’s front desk, told Bitcoin News:

”We want to give to cryptocurrencies the same protection that traditional assets have on the hereditary front, and we do it in a different way from the competitors without taking possession of the asset.”

Crypto360’s founders claim they were ”not amazed” by other custody solution providers in the market but appreciated that these alternatives confirmed that custody is valid if integrated with the possibility for assets to be handed down in the face of decisive events.

Contractual and conditional custody on the go

The firm provides an ”ad hoc solution” for institutional investors, offering them different contractual conditions from that of other investors. 

A major group of users is expected to be those looking for a way to manage their cryptocurrency for inheritance with full legal compliance. Rossi explained, ”It is compatible with local tax laws because cryptocurrencies are not yet included as goods in the hereditary asset. The Crypto360 service has been conceived as an encrypted custody of private keys and the aspect of succession is an integrative character that makes its sphere of application complete.”

As well as inheritance, clients can assign a designated beneficiary to assume funds in the event of a particular incident that is contractually identified. 

The platform does save a copy of clients passwords but this is protected by a double level of encryption and stored in protected archives. If somehow the account was accessed fraudulently, any request to redeem funds in the account would be met with a request to verify the individual’s identity.

Rossi told Bitcoin News that the security process on Crypto 360 means the usual storage precautions needed to protect your private key does not apply. ”Clients can pin their password up on the wall or store it freely on multiple clouds. He could adopt any duplication and storage solution without countermeasures for the secret protection of the data, all in order to prevent its loss and without the fear that someone can use it,” he explained.

Because Crypto360 securely stores an encrypted copy of clients’ security details, if you lose your password through your own negligence you have not lost access to your account. As the company’s white paper cites, in 2017, as much as 23% of mined Bitcoins had been lost forever due to human error, so this is a way to help prevent client holdings from joining that statistic.

Security is, however, still a huge issue for cryptocurrency traders as compromised exchanges continue to make the headlines. Most recently it was revealed QuadrigaCX was given another 45-day extension for creditor protection, meaning any clients who lost money when the exchange lost control of USD 134 million in cryptocurrency will be unable to begin legal proceedings against the exchange during this time period. The exchange claims it lost control of the funds when its founder, who had sole control of the funds, died suddenly without passing on the private keys.

Rossi stated that Crypto 360 offers a different service to that of cryptocurrency exchanges, also operating with a unique security protocol which means incidents such as that experienced by QuadrigaCX would not happen on their platform. He added, ”It is important for users in the crypto world to understand that it is not safe to hold cryptocurrencies within exchanges. They are at risk of hacking and in the absence of countermeasures aimed at protecting the loss of access to funds, customers will lose their cryptocurrencies.”

How popular will crypto custodial services be?

It is no secret that cryptocurrency prices are not having their best moment. The success of projects such as Crypto360 is dependent on a large enough demand for its services, something directly correlated to the popularity of cryptocurrency and largely market prices also.

As the firm sees it, as the market matures there is a natural selection of projects as there was last year, but it is unlikely that performance similar to that of 2018 are repeated. ”Our vision on the market remains optimistic and we assume that it is a trend that is constantly growing, but in a more natural way that allows it to be consolidated,’ Rossi told Bitcoin News. 

Crypto360 also faces the potential problem of competition as more blockchain firms emerge to offer similar cryptocurrency solutions. Being one of the very first players, however, they are confident they will stay at the top of the game.

”We pride ourselves on being the first to think of a custody solution that keeps the clients’ funds private. It is very likely that the next competitors will be the banks, which as they currently do with the other assets, will keep the cryptocurrencies coming directly into possession,” Rossi affirmed. 

The prediction that 2019 will be the year of the cryptocurrency institutional investor had perhaps the largest consensus of all the year’s forecasts. In Rossi’s view, the time has already arrived: “[Custody soloutions] are a need very felt by the market and there are already large institutions ready to enter this business.”

 

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Swiss Bank Vontobel Launches Digital Asset Custody Vault

Swiss Private Bank Vontobel Launches Compliant Digital Asset Custody Vault Solution

Switzerland-based investment bank Vontobel announced today that it is launching a custody solution with a digital asset vault service for its customers.

Per the announcement, this will allow financial intermediaries such as banks and asset managers to offer their customers a more secure and easy way to buy, hold and transfer their digital assets, within an unprecedented infrastructural standard. The product features Hardware Security Module (HSM) technology embedded in the bank’s infrastructure.

One of the largest financial custody providers in Switzerland, the bank touts the new Digital Asset Vault business solution as the first in the world offering “industry-standard quality standards within the established and regulated environment”. Some of the perks include granting owners of the digital asset direct access to holdings with exclusive privilege to their private keys.

Custody solutions are currently being explored by many financial institutions, where an emerging client base built on the economy of digital assets will have a flexible channel to securely manage their holdings. Head of Vontobel Investment Banking Roger Studer said, “Digital Asset Vault is a logical evolution.”

Choi Kyung-pil, Director of the Center for Future Finance Research at the Korea Institute of Finance has also said that “traditional assets are in danger too, and the custody market is in place”.

With the expected influx of institutional investments, the need for such integrated services becomes ever necessary, with security being the most essential requisite.

Other key figures in the crypto industry such as Coinbase and BitGo have also ventured into the custodial business, aiming at servicing sophisticated investors.

Switzerland continues to shape its blockchain and digital asset industry to become one of the most conducive environments for its development. Its most recent activity includes adapting its existing laws to accommodate blockchain. Moreover, newly-elected president Ueli Maurer, who has been supportive of the development of the industry while being finance minister, has filled crypto adopters in the country with hopes of more positive outcomes.

 

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Canadian Digital Safety Deposit Box Launches for Crypto Firms

Canadian bank VersaBank announced on Thursday that its digital safety deposit box is ready for use by cryptocurrency firms.

The VersaVault project is “initiating commercialization of its services” after successfully completing beta testing, a press release reports. The custody solution can be used to “securely” store cryptocurrency assets, while the bank says it will also provide multi-signature services for digital currency investment funds and exchanges.

According to VersaBank’s Director of Investor Relations Wade MacBain, VersaVault has already prompted over 200 inquiries.

MacBain has emphasized that alongside top security, clients can also ”enjoy absolute privacy”, with the bank unable to access or view funds in a clients account; the account holder is the only entity capable of accessing or knowing what is inside their digital storage facility.

Despite producing a significant product in terms of secure cryptocurrency storage solutions, VersaBank is far from a leading financial institution in terms of size. After becoming the world’s first branchless, electronic only bank in 1993, it remains Canada’s smallest bank in terms of asset size.

Major banks have shied away from the still risky business of releasing a cryptocurrency custodial solution, with some pundits saying a secure storage product will entice more institutional investors into the cryptocurrency market.

”While many are considering ideas and plans for a digital safety deposit box, we have designed and built it,” said David Taylor, President and CEO of VersaBank.

The project was first announced in January, with two beta users signed on in March for the final stages of testing.

Gurpreet Sahota, former lead architect of cybersecurity at Blackberry, joined the project shortly after its announcement in January and has spearheaded the security aspects of the project since.

 

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Mike Novogratz: Institutional Investments in Bitcoin During Q1 2019 to Bring New Highs

Notorious Bitcoin bull and seasoned investor Mike Novogratz no longer stands by his USD 10K Bitcoin price prediction for 2018, instead suggesting that institutional investors may push it to that total early next year.

Novogratz’s comments came in a Bloomberg Television interview where he defended his previous prediction, saying the cryptocurrency process has been a learning curve with everything taking ”longer than expected.”

He compared the whole crypto ecosystem to a fourth grader being expected to materialize into a graduate. One of the issues Novogratz pointed to is the need for internal committees and testing to solve custody problems that leave investors ”screwed” if anything illicit happens to their assets.

The conversation turned to Fidelity Investment’s announcement of a ”world-class custody solution,” to quote Novogratz, aimed at institutional investors. Considering cryptocurrencies as bare financial instruments, this class of investors has been held back from entering the market due to uncertainty surrounding the storage of cryptographic keys that allow access to the assets

Fidelity is offering them insurance that they can pla