Crypto custodians are independent storage institutions or third party security service providers that store crypto and digital assets on behalf of large institutional and professional investors. Since digital assets have a high potential for loss or theft, top crypto custodians provide a secure storage facility in exchange for a fee.
How Does Crypto Custody Work?
Crypto custody is a service that securely stores and manages digital assets, like cryptocurrencies, on behalf of clients. The custodian uses strong security measures, such as keeping the assets offline (cold storage) and safeguarding private keys. Clients go through a verification process to start using the service. Custodians provide regular reports on the assets, offer insurance for protection, and follow strict regulations. When needed, clients can request withdrawals or transfers.
Best Crypto Custody Providers
Despite being fairly new, the cryptocurrency custody services niche has a growing competition and there are several cryptocurrency custody solutions in the market. The following are the top digital asset custodians.
BitGo Crypto Custody
BitGo is a qualified crypto custodian with up to $250M in insurance. Its custodial product allows you to secure your digital assets with a combination of custodial and self-managed cold and hot wallets.
As one of the best crypto custodian for institutions, it offers custody solutions to a wide range of customers, including retail platforms, hedge funds, exchanges, crypto startups, and family office crypto custody solutions.
Kingdom Trust Crypto Custody
Kingdom Trust is a crypto custody institution regulated by the South Dakota Division of Banking. It is designed for US family offices, RIAs, individual and institutional investors, broker-dealers, hedge funds, advisory firms, etc.
Choice offers two options for bitcoin and digital asset custody. The first is cold storage with high security, keeping coins offline to prevent hacking. The second option allows you to choose your own wallet within an IRA-owned trust, giving you more control and security features, like multi-signature.
Coinbase Crypto Custody
Coinbase is an insured institutional crypto custodians for investors and high-net-worth individuals under the New York State Banking Law. It operates independently of its parent company Coinbase Inc. If you want to become a Coinbase client, you must have a minimum balance of $1, 000, 000 with an implementation fee between $0 and $10, 000. Coinbase digital custody service supports all types of digital assets.
Tangany Crypto Custody
Tangany is a crypto custody provider for institutional investors and businesses in Europe. It features a modular custody suite that allows clients to choose from a variety of products and services. These include warm wallets, multi-signature cold wallets, node infrastructure and crypto payment processing. Tangany has a wide base of clients in the EU and serves more than 65, 000 wallets.
Onchain is a crypto custody solutions company based in Singapore. It offers cryptocurrency custodial services for asset managers, crypto funds, miners, OTC brokers, and exchanges. Clients can choose between co-managed and full custody solutions. One notable feature is co-signers for transaction authorization. The platform supports 10 digital currencies, including Bitcoin.
Gemini Crypto Custody
Gemini crypto custody is a qualified custodian licensed by the State of New York to store digital assets. It supports over 23 different assets, including bitcoin, and offers its services to institutions and individuals. Gemini Custody enjoys a $75 million crypto custody insurance (insured by Captive Insurance Company called Nakamoto).
HexTrust Crypto Custody
HexTrust is a fully-licensed digital asset custodian catering to foundations, financial institutions, and the Web3 ecosystem in Asia, Europe and the Middle East. The crypto custodian provides features like cold storage and multi-signature wallets. It also offers insurance coverage of up to $100 million in losses.
Being a regulated custodian, HexTrust Crypto Custody adheres to strict security and compliance standards. It is also a member of reputable industry associations, such as the Virtual Currency Association (VCA) and the Cryptocurrency Security Standards Association (CCSS).
Bitcoin Suisse Vault Crypto Custody
Bitcoin Suisse is Swiss digital custody serving corporations, financial institutions, and private investors in Europe and other parts of the world. The Bitcoin Suisse Vault uses cold storage to hold digital assets. Customer assets are held on individual blockchain addresses, making them easily accessible for trading, transfer, and for any other purpose. Bitcoin Suisse supports the storage of bitcoin and other cryptocurrencies.
Anchorage Crypto Custody
Anchorage Digital Bank is the only crypto-native bank that has been chartered by the U.S. Office of the Comptroller of the Currency (OCC). As a qualified custodian, Anchorage Digital Bank works closely with its regulators to meet stringent compliance requirements. This makes it a reliable and secure option for storing digital assets.
OSL Crypto Custody
OSL provides insured custody, brokerage and exchange services for digital asset holdings. OSL insures digital assets against theft, loss, damage, or destruction. OSL offers crypto protection for both cold and hot wallets using state-of-the-art encryption, private key protection, and multi-layer authentication. The OSL levels of protection are divided into 5 categories; physical defense, process defense, digital defense, slippage detection, and insurance.
Protect Your Crypto Assets: Top Cryptocurrency Custody Providers
There are many digital asset custodians in the market today. They provide essential services for wealthy individuals, family offices, and businesses holding digital assets. With their help, you can protect your assets from theft and effectively manage your crypto holdings. However, the diverse range of providers available requires careful consideration of factors like security levels, custody fees, insurance, and supported digital assets.
Digital Assest Custody FAQs
What is a crypto custodian?
A crypto custodian is a company that securely stores and manages digital assets. They offer features like cold storage (offline storage), multi-signature wallets, and auditing services to protect and track your assets.
What are crypto custody risks?
The risks associated with crypto custody can be divided into three main categories:
- Technology risks: These risks are related to the technology used to store and manage cryptocurrencies. For example, if a cryptocurrency exchange is hacked, it could result in the loss of customer funds.
- Business risks: These risks are related to the business practices of the custodian. For example, if a custodian does not have adequate security measures in place, it could increase the risk of theft or loss.
- Operational risks: These risks are related to the day-to-day operations of the custodian. For example, if a custodian employee makes a mistake, it could result in the loss of customer funds.
Can banks custody crypto?
Yes, banks can custody crypto. In fact, a growing number of banks are starting to offer crypto custody services. This is because the cryptocurrency market is growing rapidly and banks are looking for ways to get involved.