Bitcoin Startup BitGo Obtains Permission For Custodial Services
The American company BitGo, providing a multi-signature bitcoin wallet, has received the approval from the South Dakota Division of Banking and can now deliver qualified custodial services, Coindesk reports.
Throughout the year, the startup tried to launch a regulated service for storing and managing assets. According to the BitGo representatives, their company can become the first custodian service with a license from regulators, which was developed solely for operations with cryptocurrencies.
BitGo currently offers the hot wallet for working with tokens. As an alternative to cold storage, the service provides a more secure custodial solution for user accounts, in particular for institutional investors — the target group of BitGo.
In the field of custodial storage of crypto assets, there are yet no specific standards of work and service provision, so the startup team will have to develop its own standards for customer service.
According to Shahla Ali, the BitGo legal advisor, the permission from the regulators will allow the company to attract new customers who previously did not use cryptocurrency because of the absence of reliable custodian services for storing these assets.
The BitGo service meets the requirements for combating money laundering and identifies customers through the KYC system. Ali stresses that regulation can save the industry from suspicion of illegal monetary transactions, drug trafficking, etc.
As previously reported, Citigroup reported on the release of receipts for bitcoins, so the bank's clients will be able to trade cryptocurrency without owning it.