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BitGo, a United States cryptocurrency custodian, has launched a regulated platform designed to custody and manage native tokens for Web3 protocols, according to a statement from BitGo shared with Cointelegraph on Sept. 16.
The custody platform enables crypto-native organizations such as foundations and protocols to programmatically manage native tokens for distribution to investors, employees, grant recipients and other stakeholders, BitGo said.&nbsp;
Regulated digital asset custodians are gaining traction in the US among investment managers and fund issuers, but Web3 protocols generally still self-custody tokens in onchain wallets or smart contracts.&nbsp;
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 <img alt="BitGo launches regulated custody platform for native protocol tokens" name="" src="https://s3.cointelegraph.com/uploads/2024-09/0191fbfb-c6f2-796e-87f1-fc4debb5cd25">
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 BitGo insures crypto against some instances of loss or theft. Source: BitGo
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Related: <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/exclusive-fireblocks-granted-new-york-charter-crypto-custody" rel="" target="_self" text="null" title="https://cointelegraph.com/news/exclusive-fireblocks-granted-new-york-charter-crypto-custody">Fireblocks granted New York charter for crypto custody</a>
By “cobbling together a non-custody wallet solution, a smart contract for distribution, and yet another provider for custody,” Web3 protocols introduce “unnecessary pain and complexity, with gaps in security, compliance and transparency,” BitGo said.&nbsp;
BitGo’s token management platform aims to handle everything from “token vesting, unlocking and distribution” to “staking… liquidity management and even tax reporting,” it said.
Self-custody minimizes dependence on centralized intermediaries but introduces its own risks, including cybersecurity exploits and internal misconduct.&nbsp;
On Sept. 16, decentralized finance (DeFi) protocol Delta Prime <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/delta-prime-defi-hacked-6-m-arbitrum" rel="" target="_self" text="null" title="https://cointelegraph.com/news/delta-prime-defi-hacked-6-m-arbitrum">was hacked for at least $6 million</a> worth of virtual assets. Meanwhile, BaseBros Fi, a DeFi protocol on the Base blockchain, <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/basebros-fi-defi-rug-pull-smart-contract-base" rel="null" target="null" text="null" title="null">disappeared after stealing user funds</a> via an unaudited smart contract.&nbsp;
Crypto in BitGo’s custody is insured up to $250 million “against loss, theft and misuse in situations where we hold all keys,” according to its website. Cybersecurity insurance is standard among regulated US crypto custodians.&nbsp;
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 <img alt="BitGo launches regulated custody platform for native protocol tokens" name="" src="https://s3.cointelegraph.com/uploads/2024-09/0191fbfa-e66a-798a-943c-d8f1aa2065b2">
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 New York-regulated virtual currency businesses. Source: NYDFS
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On Aug. 14, <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/exclusive-fireblocks-granted-new-york-charter-crypto-custody" rel="" target="_self" text="null" title="https://cointelegraph.com/news/exclusive-fireblocks-granted-new-york-charter-crypto-custody">Cointelegraph reported</a> that Fireblocks, best known for its self-custody solutions, obtained a charter to act as a regulated crypto custodian for US clients.&nbsp;
The US Securities and Exchange Commission has been <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/sec-charges-galois-capital-ftx-asset-custody" rel="" target="_self" text="null" title="https://cointelegraph.com/news/sec-charges-galois-capital-ftx-asset-custody">cracking down on crypto investment managers</a> that fail to adhere to rules requiring client funds to be held by qualified custodians, such as a registered broker-dealer or bank.&nbsp;
Through BitGo New York Trust Company, BitGo is among several US firms — including Coinbase Custody Trust, Fidelity Digital Asset Services and Paxos Trust Company — chartered by the state of New York to custody crypto for US clients.
Magazine: <a data-ct-non-breakable="null" href="https://cointelegraph.com/magazine/spot-bitcoin-etfs-hackers-risk-caroline-ellison-ftx-prison-hodlers-digest/" rel="null" target="null" text="null" title="null">Bitcoin ETFs may face hacker threats, Ellison seeks no prison time, and more: Hodler’s Digest, Sept. 8–14</a><advertisement>
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BitGo launches regulated custody platform for native protocol tokens

Cointelegraph

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