Nov 26, 2018 (China Knowledge) - Shanghai-based cryptocurrency startup InVault will be launching its custodian services in Hong Kong, taking advantage of the region's new licensing regime which requires crypto trading platforms and fund managers to ensure their assets are well protected.
According to the Hong Kong Securities and Futures Commission (SFC), virtual asset fund managers must either safekeep assets with a third-party like InVault, keep them with an exchange or have self-custody services.
The SFC has also added that, insurance coverage should be considered when choosing a third-party custodian to ensure there is compensation for customers in the event a loss of assets takes place. For trading platforms, the insurance policy should have a 95% coverage for cryptocurrency assets held by the operator.
InVault currently which has 1 million Ethereum under its custody in mainland China has just obtained its Hong Kong license and will be offering its fully automated services there starting from December. The company protects its customer's assets by storing their “private key” which is used to access the customer's digital wallet or carry out transactions in a physical vault.’
The cryptocurrency custodian is currently in talks with two insurers that can potentially provide coverage for the assets under its custody and will be included as part of its custodian services. According to InVault's founder, the largest challenge for insurers lies in accurately measuring the risk profile of a custodian and thus pricing its cryptocurrency insurance premium.
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