Chinese Crypto Custody Companies Continue To Provide Services Despite The Ban

Amidst the debates on whether the central authorities will succeed in regulating the crypto sector, a new Chinese crypto-startup emerged.

This is important because the very same startup that was just launched started offering cryptocurrency services last week. InVault, which is the name of the startup, doesn’t seem to abide by the mainland ban that is going on in China at the moment. This startup is based in Shanghai and its sole purpose is to attract crypto exchanges as primary clients because they want to avoid holding clients’ assets.

Basically, the custodian will hold all of the clients’ securities in electronic form or in physical if there’s cash involved. However, the Chinese ban could prohibit an organization to hold assets that are virtual currencies or belong to companies that have no legal status in the country. InVault, on the other hand, found a way to bypass the crackdown. The company offers a new cryptocurrency wallet service which means that there will not be a central control over the funds. InVault will basically be the custodian of users’ private keys.

The chief executive of InVault said:

‘’Today, the vast majority of cryptocurrency exchanges globally still involve their senior management in managing the transfer of digital tokens ordered by clients. Putting the private keys to your cryptocurrency assets in the hands of senior management is akin to putting all your money in their control.’’

In the meantime, InVault has made its first major deal with a cryptocurrency exchange to be a custodian of one million ethereum tokens.