Group 1: Company Overview - Ledger, a crypto hardware wallet manufacturer, is preparing for a U.S. initial public offering (IPO) that could value the company at over $4 billion, highlighting the growing importance of crypto custody for institutional investors [1] - The IPO plans involve leading financial institutions such as Goldman Sachs, Jefferies, and Barclays, with potential execution as early as this year, although timelines may change [1] Group 2: Market Context - The New York Stock Exchange listing plan positions Ledger among several crypto firms seeking U.S. listings, benefiting from a more favorable regulatory environment under President Donald Trump, who aims to establish America as a hub for digital asset innovation [2] - BitGo recently listed on the New York Stock Exchange, raising up to $213 million at a nearly $2 billion valuation, marking a significant event in the crypto IPO landscape [2] Group 3: Market Conditions and Predictions - The outlook for crypto IPOs is mixed, with some stocks experiencing declines despite major stock indices nearing all-time highs, indicating volatility in the crypto market [3] - Predictions suggest that if macroeconomic conditions tighten in 2026, crypto IPOs may face challenges in both uptake and post-listing price appreciation [4] - Bitcoin is currently trading at $89,147, down 6.6% over the past week, with the total crypto market cap above $3 trillion, reflecting a slight decline [4] Group 4: Industry Trends - The theme of custody is becoming increasingly significant across major jurisdictions, aligning with Ledger's core business, as tighter custody regulations and rising institutional interest in virtual assets could enhance demand for Ledger's services [5]

Crypto custody company BitGo has raised $212.8 million in its initial public offering.By completing this form, you agree to receive marketing communications from PYMNTS and to the sharing of your information with our sponsor, if applicable, in accordance with our Privacy Policy and Terms and Conditions .Complete the form to unlock this article and enjoy unlimited free access to all PYMNTS content — no additional logins required.The IPO, the first by a digital asset firm this year, values BitGo at $2.08 bill ...

Core Viewpoint - The U.S. Securities and Exchange Commission (SEC) has clarified the custody requirements for broker-dealers handling crypto asset securities, moving from regulatory ambiguity to clear operational expectations [1][2]. Group 1: Custody Requirements - Broker-dealers must maintain exclusive possession of crypto asset securities by controlling the private keys used for access and transfer [2][4]. - A broker-dealer can only claim possession of a crypto asset security if it has direct access to the asset on the relevant blockchain and the ability to transfer it [4][5]. - Access to the private keys must not be shared with customers or third parties, including affiliates, without the broker-dealer's authorization [4][6]. Group 2: Assessment and Risk Management - Broker-dealers are required to assess the blockchains and networks of crypto asset securities before custody and to conduct regular assessments thereafter [5][6]. - Firms must evaluate various factors such as performance, security, governance, upgrade processes, and risks like hard forks and 51% attacks that could impact ownership records [5][6]. - If a broker-dealer identifies material security or operational weaknesses in a blockchain network, it should not consider itself to have possession of the asset [6]. Group 3: Historical Context - The SEC's statement comes after years of broker-dealers claiming that crypto custody was effectively impossible under previous SEC interpretations [7]. - From 2022 to 2024, the SEC's approach was heavily influenced by accounting and structural constraints that deterred traditional firms from entering the crypto space [7].

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].

Core Viewpoint - The SEC has issued new guidance to help retail investors safeguard their cryptocurrency holdings, emphasizing the importance of understanding crypto custody models and associated risks [1][2]. Group 1: SEC Guidance on Crypto Custody - The SEC's Investor Bulletin outlines standard crypto custody models and highlights the risks of holding digital assets, particularly in the context of third-party custodians [1][3]. - The crypto custody sector is growing at nearly 13% annually and is projected to reach $6.03 billion by 2030, indicating a significant expansion of assets held outside traditional financial infrastructure [2]. Group 2: Risks Associated with Third-Party Custodians - Investors are urged to scrutinize third-party custodians, as issues such as hacking, shutdowns, or bankruptcies can lead to loss of access to crypto assets [3][4]. - The SEC warns that some custodians may rehypothecate or pool customer assets, which can amplify losses during market stress by spreading risk across institutions [4]. Group 3: Self-Custody Considerations - The bulletin acknowledges the appeal of self-custody for investors seeking direct control over their holdings, but it also emphasizes the full responsibility that comes with managing one's own wallet [5][6]. - The SEC cautions that lost credentials in self-custody typically result in permanent loss of assets, with little chance of recovery [5][6].

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Core Insights - Standard Chartered has expanded its partnership with OKX to provide a custody solution for institutions in the European Economic Area, allowing them to trade crypto without direct deposits to an exchange [1][6] - The custody service is designed to minimize risk for institutions making large trades, as it secures assets with bank-grade custody [2][4] - The partnership aims to build institutional trust in crypto trading, especially in light of past incidents like the FTX collapse, which have made institutions wary of platform risk [4][6] Group 1 - The custody solution enables institutions to trade crypto while their assets are secured by Standard Chartered, enhancing trust in the trading process [1][6] - The partnership initially launched in the UAE and targets institutions making eight- or nine-figure trades, addressing their concerns about risk exposure [2] - OKX provides liquidity by mirroring crypto deposits on its platforms, ensuring that institutions can trade effectively while their collateral is secured [3] Group 2 - The ability to trade large amounts of crypto without relying on a centralized exchange is appealing to institutions concerned about security [4] - Institutional trust in crypto exchanges has been diminished due to previous hacks and insolvencies, making this new product a significant development [4] - The new custody solution is expected to mitigate risks and restore confidence among institutional investors in the crypto market [4][6]

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