The market is starting to realize the importance of having enhanced security infrastructure for virtual assets. For a long time, conventional banks and traditional custodians were hesitant to step into the crypto custody market, mainly because laws and regulations for crypto custody were still in a gray area.
However, just earlier this year, South Korean lawmakers voted to place stricter AML regulations for the crypto business. The act will come into effect one year from promulgation and require all crypto firms to register with regulators in South Korea. The authority’s firm stance on establishing the standard for the cryptocurrency is signaling the new business opportunities in the crypto custody market. Banks and custodians are seizing this opportunity faster than anyone else.
A year ago, Hexlant Research put together a complete list of crypto custodians of 2019 in Issue Report. (Click to read the report) From April 2019 to July 2020, there have been some noticeable changes in the market.
First, there have been a series of M&A in the crypto custody market. Xapo, a Hong Kong-based custodian, was acquired by Coinbase, while Bakkt acquired DACC. Another noticeable change was the advent of new mega-custodians with larger insurance coverage. Gemini and Bakkt respectively launched crypto custody services with whopping $200m and $125m insurance coverage.
As more conventional financial firms started to expand their businesses into the field of crypto custody, crypto custodians are offering extensive insurance coverage and staking services to compete with legacy institutions.
South Korean market is also coping with the international trend in crypto custody. Primarily led by conventional banks, new crypto custody services are actively being developed jointly with local law firms and blockchain tech providers to establish common ground before the act is enforced. (Click to read the article)
This fast-paced crypto custody market has been highly volatile due to the uncertainty in the rules and regulations for crypto custody. However, authorities around the world are starting to implement the relevant measures provided by the FATF Recommendations. It is no doubt that the expansion of the crypto custody market is inevitable.
Titled “Why big financial firms are entering the custody market?”, Hexlant Issue Report has predicted that the digital asset will be included in the areas of legacy finance. Our prediction turned out to be accurate. We hope our readers to comprehend the future of crypto custody with this report.
Hexlant Custody Report URL : http://bit.ly/2Iwa8NI
Visit www.hexlant.com for more information!
