Ledger and Legacy Trust Built New Crypto Bridge For Institutionals
Bridging the gap between traditional institutional investors and the crypto industry is an important step for the mass adoption of cryptocurrencies in the eyes of many. Now, another bridge appears in the form of a custody solution, developed through a partnership between public trust company Legacy Trust and hardware wallet manufacturer Ledger.
The purpose of this solution, called Ledger Vault, is said to be “[accelerating] the flow of institutional money into digital assets,” partners announced.
The new product is a multi-authorization wallet management tool for digital assets that offers both hardware and software security benefits. It will allow cryptocurrency exchanges, OTC (over the counter) desks and investment funds to appoint an independent qualified custodian, as well as tailor the rules to transaction authorization individually for all accounts, according to the announcement. The custodian will be able to make transactions without the need for multi-signature participants to be physically together, speeding up the usually slower process, it added.
The Ledger Vault works by having three Shared Owners each create a seed, which combines to generate the Vault’s master seed. Then, they appoint Administrators and determine the number of authorizations required to validate an administrator operation. Administrators are responsible for defining transaction rules and they, in turn, appoint Operators and grant them permissions like viewing, creating, approving, or aborting transactions.
Legacy Trust already provides custody services to exchanges, OTC desks and investment funds. According to Vincent Chok, group CEO of Legacy Trust, “The combination of Ledger’s technological versatility in safekeeping digital assets with Legacy Trust’s regulatory standing provides a complete and permanent solution to the issue of custody in the digital asset space, that did not exist until now.”
In an interview last year, Ledger CEO Éric Larchevêque told Cryptonews.com that in 3-5 years, the revenue share of its wallet business is estimated to drop to one third, compared to 95% now, as the company intends to extend security solutions to enterprises. This and other steps, such as IoT (internet of things) related solutions, will help to diversify business and become more resilient to the volatility in the crypto market.
Ledger Vault is not the only custody solution targeting institutional investors. Aegis Custody, a subsidiary of financial management company Aegis Capital Management, announced in January that they are launching their custody solution for US investors. While asset management giant Fidelity Investments has recently begun offering a bitcoin custody service for financial institutions.
Custody as a solution for blockchain security
(A discussion at Web Summit in November 2018)