March 26, 2019

March 26, 2019

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March 25, 2019

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Australia's First Crypto-Custody Vault is Open for Business

Australian companies Decentralised Capital and Custodian Vaults have recently announced a partnership to launch Australia’s first insured crypto-currency custody vault.  This follows the earlier commencement of Coinbase’s crypto-custody service in the USA and Europe.  These offerings are in response to growing investor demand for reliable and secure crypto-currency storage.

The Australian offering sees Custodian Vaults expand beyond its traditional service of storing precious metals.  It will allow crypto-currency to be stored in a secure ‘cold storage’ facility as a means to address the ongoing wave of security concerns surrounding the currency’s vulnerability to hackers.  This new custodial service will provide customers with direct access to their holdings and includes security features such as physical surveillance, biometric identification, pin codes, CCTV monitoring, alarms and fire control systems.

Crypto-currency advocates expect the emergence of such custodial services to pave the way for institutional investors to enter the market.  Such investors have been seen to be hesitant as they are concerned about the security of their holdings, especially as they may have to rely on unregulated third party services to obtain and hold their crypto-currency.  We expect that these custodial services will soon face regulatory scrutiny followed by a consultation period, which will then result in a robust regulatory framework.

Maria Downie contributed to this piece.

Copyright 2019 K & L Gates

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About this Author

Jim Bulling, KL Gates, financial services lawyer, funds management attorney
Partner

Mr. Bulling's practise focuses on banking and financial services and he acts for a range of entities in the financial services and funds management industry. His clients include Australian and international investment managers, banks, trustees of superannuation funds, wholesale and retail investment trusts, funds management companies and financial planning groups.

His main areas of focus include banking and financial product disclosure issues, financial services compliance issues, financial product distribution issues and superannuation and...

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Edwin Tan, KL Gates, investment fund attorney
Lawyer

Mr. Tan is a commercial and regulatory lawyer with a focus on the financial services industry. He advises on a range of Australian regulatory and compliance issues relevant to FinTechs, fund managers, financial advisers and other financial services entities.

Mr. Tan also provides advice on governance and compliance measures targeted at the prevention of bribery, corruption and anti-money laundering.

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