Blockchain Firm BitGo Receives Approval To Launch Crypto Custody Service

News, Regulation | September 14, 2018 By:

Blockchain security firm BitGo has received an approval from the South Dakota Division of Banking to act as a qualified custodian for digital assets.

Founded in 2013, BitGo offers an enterprise-grade, multi-sig, multi-user crypto wallet, as well as API access to its underlying security platform. It is one of the world’s largest processors of on-chain bitcoin transactions, processing 15 percent of all global bitcoin transactions, and $15 billion per month across all cryptocurrencies.

The approval means BitGo can now offer institutional clients a regulated storage solution for digital assets. The new service, called BitGo Trust, will be built using the firm’s institutional-grade, multi-signature security to deliver modern security for modern assets.

BitGo CEO Mike Belshe said that custody has been the missing piece of cryptocurrency market infrastructure and this gap has kept institutional investors out of the market.

“Traditional custodians don’t have experience handling cryptocurrency,” said Belshe. “Exchanges that double as custodians present a conflict of interest and raise regulatory concerns. BitGo Trust Company is a qualified custodian, and therefore the only custody offering that delivers the highest levels of both security and regulatory compliance.”

BitGo Trust will offer 100 percent cold storage technology in bank-grade Class III vaults, support for 75+ coins and tokens, institutional-grade policy controls, multi-user accounts, fast onboarding, and 24/7 support. It will also offer low setup and assets under custody (AUC) fees. After a year, clients may be eligible for a fee credit if their AUC balance is equal to or greater than it was during the prior 12-month period.

While the new service was specifically approved by regulators in South Dakota, Shahla Ali, BitGo’s Chief Compliance Officer, noted that “generally other states will give you reciprocity in the sense that other states have money transmission laws and they’ll exempt you from money transmission requirements.”

The new service is BitGo’s latest attempt to build out its services. In July of this year, the company launched Predictive UTXO (Unspent Transaction Output) Management for fee-sensitive transaction building to address the costs associated with operating high traffic wallets. Last month, it added 11 ERC20 tokens to its wallets and cold storage solutions, bringing the total cryptocurrencies the firm support to 75.