Custody

Ledger is partnering with a Hong Kong public trust company to offer institutional-grade crypto custody solutions

The Block/Benjamin Friedrich

Quick Take

  • Ledger is partnering with Legacy Trust to offering crypto custodial services to Legacy Trust’s clients
  • The solution enables Legacy Trust’s clients to customize a custody process that best meets their needs

With the $190M QuadrigaCX cryptocurrency exchange hack still fresh in the minds of many, quality custodial solutions are becoming increasingly important.

Today, Hong Kong-licensed and public trust company Legacy Trust and Ledger, crypto security and custody solutions provider are announcing a partnership to launch an institutional-grade custody solution geared at OTC firms, exchanges, and high net-worth individuals.

“The combination of Ledger’s technological versatility in safekeeping digital assets with Legacy Trust’s regulatory standing provides a complete and permanent solution to the issue of custody in the digital asset space, that did not exist until now,” said Vincent Chok, CEO of Legacy Trust.

Legacy Trust’s new custody solution will be powered by Ledger’s Ledger Vault key management solution. “We want the digital asset industry to be mainstream,” Demetrios Skalkotos, Global Head of Ledger Vault tells The Block. “In order for it to become mainstream, the digital plumbing needs to be put in place.”

Legacy Trust, was originally a traditional asset custody provider. The firm began exploring the custody of cryptocurrencies in 2017 after Hong Kong regulators announced that these assets were a form of a commodity. “Two years ago a lot of [crypto] clients and ICOs began coming to us,” Chok tells The Block, emphasizing that there is a need for qualified custodians in this industry. The partnership with Ledger enables Legacy Trust to custody bitcoin and ERC-20 tokens.

Furthermore, Ledger Vault’s unique multi-authorization feature enables Legacy Trust to offer customizable custodial services. With multi-authorization, Legacy Trust’s client can set up a wallet structure that best fits their needs. If a hedge fund client needs quicker access to their funds, they could set a “warm” wallet, requiring fewer private key signatures to release the fund. If a client is a long term investor, they can set up a “cold” wallet, requiring up to six signatures for a fund’s release.

“We designed it to be very flexible for a client’s needs,” Skalkotos tells The Block.

To be sure, Legacy Trust and Ledger aren’t the only custody providers in this industry. More recently, firms like Fidelity and Bakkt announced their interest in offering custody services for cryptocurrencies. Leading businesses like Coinbase and BitGo are also increasingly active in this space. Legacy Trust and Ledger, however, are not concerned.

“This a huge market. The more custodians out there means this is going to become mainstream,” says Chok. Skalkotos agrees, adding that “It is great to see competitors like Bakkt and Fidelity coming into the space,” because “it validates the space.” Skalkotos also notes that, despite launching Ledger Vault in late 2018, the firm is nearing a hundred clients for its solution.