Crypto Exchange Bitstamp Taps BitGo for Custodial Services
BitGo has been tapped to provide custodial services for Europe’s largest exchange by trading volume.
Announced Wednesday, Bitstamp will begin to transfer its assets under management to BitGo’s wallets on Oct. 10. Both firms declined to disclose the total amount and which types of assets will be managed.
BitGo uses Class III bank-grade vaults for cold storage and has taken out a $100 million insurance policy through Lloyd’s of London, which covers against theft or the loss of cryptographic keys. A company representative said BitGo has over 300 clients for its custodial and trust services.
“We considered all available options, but believe BitGo is a good match, because we see them as a pioneer in the industry and an essential piece of the crypto ecosystem,” a BitStamp representative told CoinDesk. “That said, we plan on diversifying our custody options in the future in order to serve the different needs of our diverse customer base.”
The firms have a legacy of working with one another. Bitstamp began using BitGo’s hot wallet “years ago,” the spokesperson said.
Bitstamp is one of the oldest cryptocurrency exchanges. Last year the firm partnered with Stockholm-based Cinnober to overhaul the firm’s matching engine, enabling Bitstamp to act as a “de facto” clearinghouse. The firm was also granted a BitLicense from the New York State Department of Financial Services (NYSDFS) in April and will look to expand its New York-based team.
Mike Belshe, CEO of BitGo, said:
“Institutions need a lot more than an app with pretty charts. They need proper security, which includes technology, people, and processes, and they need exceptional client service. We’re proud to have earned Bitstamp’s trust and their business.”
BitGo CEO Mike Belshe image via CoinDesk archives