Institutional Custody for Digital Assets: A Primer — Commissioned by Copper
December 9, 2021, 8:02AM EST · 1 min read
Custody has always been a central topic for digital assets with good reason. Properly secured digital assets cannot be stolen or confiscated, this is one of the key differentiators between digital assets and other asset classes.
This report examines how this is possible and the technologies used by modern institutional custody firms to secure billions of dollars in assets. These firms either store customer assets directly or provide them the technology and tools to securely self-custody; this distinction broadly defines today’s custodial landscape. Selecting between these two strategies has real implications for security, operations, and regulatory compliance.
Custody as a sector has received massive investments in 2021, totaling over $2 Billion, and saw acquisitions as large as $1.2 Billion dollars when Galaxy Digital acquired BitGo. Leading custodians such as Coinbase, Gemini, and NYDIG were also active in the M&A space all making acquisitions to bolster their custodial offerings.
This report provides key considerations for companies to make when selecting between direct custodians and self custody, as well as items to consider when selecting a particular custodian.
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© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.