US Regulators Approve Blockchain Startup Bitgo as a Cryptocurrency Custodian

US Regulators Approve Blockchain Startup Bitgo as a Cryptocurrency Custodian

Bitgo, a blockchain-powered security company, just reported that it blockchain solutions have passed the regulatory approval in the U.S. to offer cryptocurrency custody services, in which are one of the great news for crypto investors in America.

After being approved by the regulators, BitGo becomes the latest company to throw its hat into the crypto custody ring while, at the same time, the market prepares to welcome large institutional investors who have previously been put off by crypto’s substantial custody risk. As it was reported by ccn.

BitGo announced on Thursday, Sept. 13, that it had received this regulatory approval in the form of a state trust company charter from the South Dakota Division of Banking. With the move, it now becomes the only regulated custody service available on the market that is offered exclusively for digital asset storage.

“This is early stages in an industry that’s volatile right now”

While the crypto market has been in a downturn for much of 2018 and BitGo is potentially opening itself to a level of regulatory scrutiny that other cryptocurrency startups do not face, co-founder and CEO Mike Belshe believes that the market reception for a regulated crypto custody offering will make any sacrifices worth it.

“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 […] This is early stages in an industry that’s volatile right now. We’re in a down cycle in terms of where we’re going, but the institutions see an opportunity. It’s going to progress quickly,” said Mike Belshe in a recent article by CNBC.

With the approval, BitGo is now required to regularly file financial audits and comply with AML and KYC regulations in addition to monthly disclosure filings. According to Belshe, the plan is for BitGo to eventually become a broker-dealer, but at the moment there is no set timeframe for this to happen.

BitGo joins a growing number of companies with cryptocurrency custody offerings including Citigroup, Coinbase and Gemini, all of whom are targeting the same institutional investment market

Cryptocurrency Custody: A much needed solution

BitGo joins a growing number of companies with cryptocurrency custody offerings including Citigroup, Coinbase and Gemini, all of whom are targeting the same institutional investment market ahead of the expected entry of traditional investment. Bernstein analyst Christian Bolu belives that there is sufficient space for new market entrants to operate.

“As the crypto-asset class seasons and institutional demand builds, there are a plethora of opportunities for traditional firms to engage in the eco-system. These include the provision of custodial and asset management services as well as traditional brokerage functions like market-making,” he said on CNBC.

Earlier this year, in January, CCN specialized media reported that BitGo acquired the $12 billion digital asset management firm Kingdom Trust, which at the time was at the time one of a small number of regulated custodians offering digital asset custody to institutional investors.