BitGo gets regulatory approval for crypto custody

13 Sep, 2018
by David Robb
BitGo gets regulatory approval for crypto custody

Cryptocurrency security startup BitGo has received approval from U.S. financial authorities to act as a custodian for crypto and other digital assets. The South Dakota Division of Banking gave the go-ahead for the firm to offer its clients a regulated storage solution for their crypto investments.

BitGo currently offers an online 'hot wallet' solution, that users can download and use to safely store their crypto tokens. The company made the decision to launch its own regulated custodial solution back in May.

Read more: BitGo to create its own digital asset custodian

This will be the first time a custodial solution for cryptocurrencies has been built entirely from scratch and given official regulatory approval. Approval from South Dakota authorities is likely to mean that other states will not stop the firm from operating in their jurisdiction.

BitGo's chief compliance and legal officer Shahla Ali told CoinDesk that the company hopes "to build this platform out, to really demonstrate to regulators and customers that this model can work and we can really build a great trust company that safeguards assets."

The new crypto custody solution will be primarily targeting institutional investors. According to Ali, "many large market not engage with the cryptocurrency space because they can't custody their assets...(an effective custodial solution will) alleviate some of the concerns the governments around the world have that (crypto) facilitates money laundering, that it facilitates drugs."

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