Mike Belshe Claims BitGo Outsmarts the SEC’s Custody Rules

Core Insights - BitGo positions itself as the only provider offering all custody options described by the SEC, following its recent regulatory approval to operate as a bank, which enhances its institutional services [2][4]. Group 1: Custody Options - BitGo allows institutions to combine self-custody and third-party custody into a single hybrid strategy, creating custom risk profiles that are unique to its platform [3][4]. - The SEC bulletin outlines two primary models of crypto custody, but BitGo enables clients to utilize both models simultaneously, providing flexibility [4]. Group 2: Asset Storage and Security - Under BitGo's framework, 90% of client assets can be stored in BitGo Trust cold storage, ensuring regulatory compliance, insurance, and security, while the remaining 10% can be in self-custody hot wallets for operational flexibility [5]. - This hybrid approach reduces single points of failure, as assets in the trust remain safe even if self-custody keys are lost, unlike traditional exchanges that risk freezing all funds during insolvency [5]. Group 3: Regulatory Compliance and Insurance - BitGo Bank & Trust, NA, a federally chartered national bank, supports the platform's third-party custody solution and is subject to regular SOC 1 Type 2 and SOC 2 Type 2 audits [6]. - The bank supports over 1,400 coins and tokens under segregated accounts, backed by a $250 million insurance policy from Lloyd's of London syndicates [7]. - BitGo maintains strict 1:1 custody standards, ensuring that client assets are not rehypothecated, lent, or commingled [7].