March 27, 2024
BitGo and Swan Bitcoin Join Forces
Bitcoin News

New Bitcoin-Exclusive Trust Company Emerges as BitGo and Swan Bitcoin Join Forces

BitGo and Swan Bitcoin have unveiled plans, as of September 15, to establish a Bitcoin-exclusive trust company in the United States, pending regulatory approval, according to their official statement.

This upcoming entity is slated to undertake trust company functions, encompassing Bitcoin custody, administration, and management on behalf of its beneficiaries. Swan CEO Cory Klippsten clarified that their objective is to provide Bitcoin custody services without the complications associated with housing various other cryptocurrencies under the same roof. Klippsten emphasized, “For years, we’ve heard from major clients, partners, and other Bitcoin companies that they would prefer a Bitcoin-only software and services stack that is focused strictly on the best custody that leverages Bitcoin’s unique features.”

BitGo, as stated on its website, specializes in digital asset security and custody, supporting a broad array of over 30 cryptocurrencies. In contrast, Swan’s core business revolves entirely around Bitcoin, enabling users to invest in Bitcoin through both one-time and recurring purchases, with custody of records entrusted to Fortress Trust and Bakkt, while BitGo serves as a cold storage custodian.

This new joint venture is designed to cater to institutional investors, including asset managers, pension plans, family offices, and government and corporate treasuries. It aims to provide an array of Bitcoin-related services, including cold storage, fraud prevention, anti-money laundering (AML), and Know Your Customer (KYC) protocols.

The institutional investor segment within the cryptocurrency space is experiencing rapid growth in the United States, particularly as prominent asset managers seek regulatory approval for a spot Bitcoin exchange-traded fund (ETF). Numerous major Wall Street entities are already offering cryptocurrency custody solutions to institutional investors, including Bank of New York Mellon and Deutsche Bank.

Swan’s CEO expressed optimism, saying, “We believe there is a high likelihood that several ETFs will be approved in 2024 and thus a new round of entrants to the Bitcoin market seeking mature, reputable, technologically proficient partners for a range of needs.” The Securities and Exchange Commission has postponed its decisions regarding spot Bitcoin products, and analysts anticipate the regulator may continue to delay these decisions until early 2024 as deadlines draw near.

Mike Belshe, CEO of BitGo, highlighted the close collaboration between the two companies over nearly a year in crafting robust, qualified custody models. He pointed out, “Early in 2023, we recognized the opportunity to establish a Bitcoin-only custodian, combining the unique capabilities of each company and supporting the innovators that will be at the forefront of pushing Bitcoin adoption.”

Image by pixabay

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