BitGo Receives Regulatory Approval to Custody Crypto Assets

Crypto security startup BitGo has received approval in the U.S. to act as a qualified custodian for digital assets.

The company, which has spent most of 2018 attempting to launch a regulated custodian entity, announced that the BitGo Trust had been approved by the South Dakota Division of Banking on Thursday, meaning it can now offer institutional clients a regulated storage solution for digital assets, said chief compliance and legal officer Shahla Ali.

Ali told CoinDesk that this may mark the first time a regulated custodian was designed and built from scratch specifically to target crypto assets.

Although BitGo Trust was specifically approved by South Dakota regulators, Ali noted that "Generally other states will give you reciprocity in the sense that other states have money transmission laws and they'll exempt you from money transmission requirements."

Although BitGo has customers who are ready to begin storing their assets with the Trust, under South Dakota regulations, the general public has 30 days to file an appeal against the decision.

Once it does launch, BitGo will immediately begin taking custody of assets, indicated Ali.

Ali said the BitGo team has worked to ensure that its custodial offering matches what they believe customers will need to be comfortable storing digital assets.

"That's certainly our hope, we believe that will happen, we've obviously engaged with many many large market makers who do not engage with the cryptocurrency space because they can't custody their assets," she explained.

BitGo has been working to launch as a regulated custodian since January 2018, when it originally announced it would acquire the Kingdom Trust Company.

At the time, Kingdom Trust was a digital asset custodian with roughly $12 billion in assets under storage, as previously reported.