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.
“Currently … we offer an online hot wallet solution, which is available to anyone to download our software and store their coins. We also offer a custodial solution which is a combination of hot and cold wallet,” she said, although “that offering, though secure, is not regulated like the Trust.”
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.”
BitGo representatives met with state regulators during the process to approve the Trust, she said. Now that it’s been approved, “our hope is to build this platform out, to really demonstrate to regulators and customers that this model can work and we can really build a great trust company that safeguards assets.”
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. The company said it is set to begin operations on a technological level, and will do so once the 30-day period has expired if no appeals are filed.