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Coinbase Custody Launches New International Institutional Grade Crypto Service to European Clients

With its operations based in Dublin, Ireland, Coinbase Custody launched its institutional-grade crypto asset storage service to clients in Europe.

The cryptocurrency exchange launched Coinbase Custody in 2017 for institutional clients such as hedge funds and family offices. Its assets under management have over $7 billion in cryptocurrency assets, with its acquisition of Xapo’s institutional custody business in August 2019.

According to the press release, Coinbase Custody International will be serving broad digital asset coverage to its European clients in a “localized way, with local staff, localized SLAs, and in compliance with local laws.”

The report read, “By offering our services from the same region in which our clients are located, it’s our goal that they will benefit from greater legal and regulatory clarity.”

The international launch is said to meet the demands of institutional investors in Europe and beyond. Due to client demand, the company expressed that Europe is its fastest-growing geographic segment. The company is planning to support more digital assets in the future, along with new features.

Coinbase has also been awarded a new patent from the US Patent and Trademark Office for an automated system to flag and removes non-compliant user accounts. According to the patent, the automated system will be accompanied by a scoring mechanism that would be ruling out non-compliant user accounts, ones that are suspected of trafficking in illegal activity.

Coinbase was awarded an e-money license in October 2019 in Ireland by the Central Bank of Ireland and has allowed the company to expand its Irish operation and “deliver a better product to its customers across some of their fastest-growing markets. It will also enable them to secure passports for their customers across the EU and EEA.”

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Coinbase Becomes First Custodian to Pass Two Major Security Evaluations

Coinbase Custody has become the first cryptocurrency custodian to pass two new security evaluations.

In a press release published on Feb. 12, Coinbase Custody announced it had been awarded both Service Organization Control (SOC) 1 Type 2 and SOC 2 Type 2 reports by accounting firm Grant Thornton.

What is SOC?

For Coinbase Custody clients, these reports reinforce that the system requirements, service commitments, and data protection safeguards of the custodian meet the rigorous standards necessary to provide the safest custody solution in the crypto ecosystem.

The evaluation was conducted by the Grant Thornton accounting firm. On the firm’s website, it is explained that SOC reports provide and evaluation of the strength of “financial, operational and information security controls in an organization.”

SOC 1 deals specifically with an organisation’s ability to audit itself effectively while SOC 2 reports provide information on the “security, availability, processing integrity, confidentiality and privacy.”

The press release confirmed that Coinbase Custody, “Will continue to perform regular SOC 1 and SOC 2 examinations to maintain the same level of rigorous security and oversight standards that has established us as the largest and most trusted leader in the space.”

In Jan 2020, cryptocurrency exchange and custodian Gemini was also awarded a SOC 2 Type 2 evaluation in partnership with Big Four firm Deloitte.

Crypto Custody Turning Mainstream

As reported by Blockchain.News, many German banks have filed for a license to offer crypto custody services.

Germany’s Federal Financial Supervisory Authority, popularly identified as BaFin, has received over 40 applications from German banks interested in offering crypto custody services.

At the beginning of this year, BaFin updated the Anti-Money Laundering Act, therefore, permitting the banks and other financial institutions to extend their offerings beyond traditional securities like bonds and stocks to include digital assets such as XRP, Ether (ETH), and Bitcoin (BTC).

The new law gives those institutions, which are already offering such digital assets, a transitional period till November 2020. They, however, must notify the regulator about their intention to obtain such a license by the end of March. In other words, the new regulations require financial institutions to have an operational license if they want to offer custody services.

The legislation triggered a run on the license among German banks. The volume of applications has outstripped the expectation of the finance ministry. The regulator has already received more than 40 applications from licensed banks for a license for custody and other services related to cryptocurrencies.

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Cardano Breaks Correlation with Bitcoin Price with Recent Partnership with Coinbase and Shelley Mainnet Launch

Cardano recently partnered with Coinbase Custody to allow ADA holders to stake and store their funds in a secure cold wallet. The launch is expected in Q4 of 2020, once the staking rewards on Cardano’s Shelley mainnet becomes available.

The Shelley mainnet launch was the biggest upgrade to the Cardano blockchain so far, with the deployment of the Shelley code confirmed to have been successfully released on the mainnet on June 30.

Participants on the Cardano network will be able to interact with the Shelley mainnet from July 7. Holders of the Cardano cryptocurrency, ADA can transfer their funds to the upgraded Shelley wallet for staking rewards on the mainnet.

The new custody agreement will allow IOHK, the blockchain engineering company behind Cardano, to be able to provide institutional-grade storage solutions to the Cardano community while allowing users to participate in the network.

Cardano’s cryptocurrency ADA could potentially be listed by Coinbase in 2020. In a Coinbase blog dated in July 2018, five new cryptocurrencies were being considered, including Cardano (ADA), Basic Attention Token (BAT), Stellar Lumens (XLM), Zcash (ZEC), and 0x (ZRX). Five of the mentioned cryptocurrencies have been listed, except ADA.

Ethereum killer and Bitcoin breaker

As of press time, Cardano ADA price has topped $0.101, with no bearish signs ahead. Cardano price has seen a 400% surge in the past four months, accompanied by a huge increase in price volume, which could be linked to the Cardano Shelley launch recently.

Cardano has climbed 20% since the launch of the Shelley mainnet. The recent bullish announcements have set ADA swinging high, breaking the correlation in price with Bitcoin. Cardano could continue its rally while Bitcoin price has been flirting with its support level.

Data from analytics firm IntoTheBlock showed that ADA price was highly correlated to Bitcoin price between January and mid-May, and has since broken that correlation in mid-May and has reached its yearly lows this week.

The Shelley hard fork, a remaining step towards full decentralization on the Cardano blockchain is expected on July 29, which marks another significant milestone for IOHK.

IOHK recently announced that it is launching a technology ecosystem fund—cFund, with Wave Financial Group, with investments made globally with a typical size of $250,000-$500,000. In partnership with the crypto asset management fund Wave, the fund will total in $20 million, which will provide money for companies and projects in the Cardano ecosystem. IOHK will be committing to half of the fund, $10 million, while Wave will be raising the other half.