New York-based regulated digital currency exchange Gemini will start offering a digital asset custody service via a new dedicated offshoot called Gemini Custody.
Expansion in full swing
Gemini Custody will work as a registered and qualified custodian for 5 major cryptocurrencies and 13 ERC-20 based tokens. It includes the likes of Bitcoin, Bitcoin Cash, Ethereum, Zcash, and Litecoin. The custodial service will initially be available for only 18 currencies. However, the Winklevoss twin-led company is planning to expand aggressively into other digital currencies as well.
Gemini is responding to the increasing demand for custodial solutions in the crypto industry, which is not limited to major coins like Bitcoin and Ethereum. There is an increasing appetite for altcoin custody in the market which could provide long-term security from a wide array of risks. Note that small cryptos are more prone to bigger risks.
Tyler Winklevoss commented on the solution, saying, “The maturation of crypto as an asset class depends heavily on the safety and soundness of the custodians that hold individual and institutional funds.”
Paving the way for institutional investments
The exchange is also responding to the higher number of institutional investments in this space. Institutional investments are larger and need better protection from theft and losses owing to operational issues. Gemini is uniquely positioned to fulfill this responsibility. The firm is headquartered and registered in the state of New York and comes under the state regulator’s jurisdiction. The state is known to high standards of regulatory control over cryptocurrency businesses because of which Gemini’s custodial service provides a safer way for investors to hold their assets.
The exchange’s director of operations, Jeanine Hightower-Sellitto commented on the launch of the new service and said that institutional investors had improved their appetite for digital coins. However, they have lacked a solution that could provide them security alongside robust regulatory support.
The custodial solution will support multi-signature access, hardware security modules (HSMs) alongside access-controlled facilities. The users will be allowed to create a whitelist of addresses which could receive withdrawals from their custodial accounts. Their assets will be locked using hardware security keys, adding more security to the mix.
As Gemini is a cryptocurrency exchange, it will also let users trade in assets held in the custodial accounts without transferring them to their exchange hot wallets. This will add additional perks for institutional investors who will get easy trading and secure storage of assets.