InVault Launches Cryptocurrency Custodian Service in Hong Kong as New Regulations Emerge

[PRIBO247]

Invault , a Shanghai-based cryptocurrency custodian service,
recently launched after Hong Kong imposed new regulations on
cryptocurrency exchange platforms and fund managers, requiring
them to protect and safeguard their clients’ virtual
assets, according to South China Morning Post’s on November
25, 2018.

InVault has taken advantage of Hong Kong’s new regulatory
requirements and seized the opportunity to launch their
cryptocurrency custodian service in Hong Kong.

CUSTODIAN OF DIGITAL ASSETS WILL BECOME THE NORM

InVault protects cryptocurrency assets by holding onto the client’s
private key and storing it in a physical vault. In the past, although
private keys are relatively hard to crack, they have often been
stolen or hacked. Kenneth Xu, the founder, and chief executive
officer of Invault believes that, as the cryptocurrency industry
progresses, licensed trustees or custodians of digital assets will
become a global norm.

"We believe that globally, custodians for cryptocurrency assets
will be regulated and operated under a trust license,” said Xu in an
interview with the South China Morning Post .

It’s not a surprise if the cryptocurrency industry moves in this
trajectory. In the past, cryptocurrency exchanges suffered from
security issues and hacking attempts. In 2018, South Korean
exchange Coincheck incurred losses of $533 million as hackers
stole 523 million NEM tokens. Italy-based Bitgrail lost $195
million after hackers took 17 million Nano tokens, and Bithumb ,
another South Korean cryptocurrency exchange lost $31 million in
11 different cryptocurrencies.

Unfortunately, there have been many reports of cryptocurrency
trading exchanges’ employees stealing clients’ cryptocurrencies
that were deposited in the hot wallet. These situations highlight
the problems concerning human involvement, especially when it
comes to the custody and safeguarding of cryptocurrencies.

DEMAND FOR INSTITUTIONAL CUSTODIAN SERVICES ON THE RISE.

Xu mentioned that demand for institutional custodian services
would increase, especially when regulators release frameworks
designed to protect retail investors. A great example is the
Securities and Futures Commission (SFC), who had just this
month, announced a new framework for cryptocurrency exchange
platform operators. Cryptocurrency exchanges must ensure that
digital assets are guarded and protected. They must choose
between a custodian, an exchange, or undergoing self-custody.

Xu, however, believes the greatest demand will come from Asia,
especially from the region’s well-known fintech capitals
Singapore and Hong Kong . Here regulations concerning
cryptocurrencies and digital assets are clear. Both cities also have
stronger credit rating systems.

InVault has, however, begun offering their services to individual
clients in China who are currently using Invault’s centralized
cryptocurrency wallet. The company also has 1 million ether
protected in mainland China and also has a new trust license form
the Hong Kong regulator. They will begin offering their completely
automated service in December 2018.

Source : https://btcmanager.com