US-Based Blockchain Startup Receives Approval To Offer Cryptocurrency Custody Services

In the latest blockchain news, it is worth to mention that the blockchain security startup BitGo, which is based in the US, has received regulatory approval to offer cryptocurrency custody services. With this, the company becomes among the latest in the list that is throwing its hat into the crypto custody ring as the market prepares to welcome large institutional investors that have been previously put off by the substantial custody risk of cryptocurrencies.

According to an announcement on Thursday, September 13th, BitGo had received its regulatory approval in the form of a state trust company charter from the South Dakota Division of Banking. This move now makes it the only regulated custody service available on the market – offered exclusively for digital asset storage.

Even though the market has been in a downward trend for much of 2018, BitGo is potentially opening itself up to a level of regulatory scrutiny that many other startups don’t face, according to its CEO, Mike Belshe.

As Belshe noted, he believes that the market reception for crypto custody offerings will make sacrifices that are worth it. In an interview with CNBC, he stated:

“This is the missing piece for infrastructure — it’s a treacherous environment today. Hedge funds need it, family offices need it, they can’t participate in digital currency until they have a place to store it that’s regulated […] This is early stages in an industry that’s volatile right now. We’re in a down cycle in terms of where we’re going, but the institutions see an opportunity. It’s going to progress quickly.”

The approval will also see BitGo as a regulated startup that can file financial audits and comply with AML and KYC regulations in addition to the monthly disclosure findings. The plan for the company is o now become a broker-dealer – even though there is no certain timeframe when this could happen.