Crypto Exchange Coinbase’s Custody Service For Institutional Investors Officially Launches

Announcements, News | July 3, 2018 By:

Cryptocurrency exchange Coinbase has officially launched its digital assets custodian service for institutional investors.

In a blog post, Coinbase announced that after accepting its first trial deposit last week, Coinbase Custody is now live for all customers in both the US and Europe. The company said it hopes to open up to clients in Asia by the end of the year.

“Today, we’re proud to announce that we’re officially open for business,” Coinbase Custody’s Product Lead Sam McIngvale said. “Over the coming weeks, we’ll continue on-boarding a set of world-class clients that includes leading crypto hedge funds, exchanges and initial coin offering (ICO) teams.”

First announced in November 2017, Coinbase Custody’s mission is to make cryptocurrency investment accessible to every eligible financial institution and hedge fund in the world. The new custodian service will require a minimum $10 million deposit and a $100,000 initiation fee. It currently supports bitcoin (BTC), ethereum (ETH), Litecoin (LTC), and Bitcoin Cash (BCH), and plans to add support for new assets going forward.

Over the past six years, Coinbase has already stored more than $20 billion of cryptocurrency on behalf of customers through its exchange, but its new custody offering will notably be secured through a SEC-compliant and FINRA-member independent broker-dealer, Electronic Transaction Clearing (ETC). Coinbase Custody’s features include split, offline private keys that require a quorum of geographically distributed agents to use cryptographic hardware to sign transactions, on-chain segregation of crypto assets, multiple layers of security and robust cold storage auditing and reporting.

“Coinbase Custody builds on this expertise to offer a brand new, independent solution for our institutional customers,” said McIngvale. “This new cold storage system has undergone rigorous penetration testing and cryptographic design review, and we plan further, regular third-party examinations to ensure the platform’s ongoing security.”

On top of Coinbase Custody’s cold storage, Coinbase is also planning to add secure, segregated hot wallets and scheduled withdrawals for maximum flexibility.

“Longer-term, we’re already thinking about how to securely enable our clients to participate in the crypto ecosystem through proof of stake and distributed governance,” said McIngvale. “We look forward to partnering with our clients to bring these features to market.”