Blockchain security firm Ledger has announced its Vault platform is being implemented by YouHodler, a company that provides crypto-backed loans and savings accounts.
Ledger Vault provides IT infrastructure for financial institutions to ensure that they can reduce the security risks associated with holding digital assets on behalf of their users.
The platform allows companies to adapt a governance framework around their specific needs. For example, this means that transfers of a higher value by employees can go through greater levels of verification before being approved.
According to Ledger, the Vault platform solves a major challenge facing larger crypto firms, as well as financial institutions that deal with digital assets: a lack of professional solutions to ensure virtual currencies can be safely stored and transferred at scale.
And given that an estimated $1.4 billion was lost to thefts, hacks, and fraud in the first five months of 2020, security very much remains a hot-button topic for the industry.
Additional layers of security
Under the wide-ranging agreement, YouHodler’s users will be able to get their hands on branded Ledger Nano devices, which have won plaudits as some of the most secure and sophisticated hardware wallets in the industry.
Ledger is also providing YouHodler access to the $150 million crime insurance policy it has secured from an insurance syndicate including Lloyds of London and Marsh. That pooled crime insurance policy is open to all Ledger Vault clients on an opt-in basis, a Ledger spokesperson told Modern Cnsensus by email.
Describing that insurance policy as “exceptionally high for a new custom insurance policy,” the spokesperson noted that the $150 million policy was not specifically for YouHodler. As a pooled policy it protects the assets of all customers using Ledger Vault. While this means that the policy may not fully cover losses if more than $150 million was stolen in a hack attack affecting multiple Vault clients.
“Security and safety are not a given in the digital asset space,” Alexandre Lemarchand, Ledger’s vice president of global sales, told Modern Consensus in an email. “Ledger worked with YouHodler to prioritize users’ security and protect against malicious cyber-activities all while not disrupting the ease-of-use of the platform’s lending services.”
Take it easy
That last point, ease-of-use, is an important one.
“Client safety, efficiency, and convenience are YouHodler’s primary concern and with our new Ledger Vault partnership, we can proudly say we have these concerns fully covered by one of the best in the industry,” Ilya Volkov, CEO at YouHodler, said in a release. “With these additional layers of security, our users can explore YouHodler like never before, taking full advantage of our crypto savings accounts, instant crypto-backed loans, and our trading/crypto multiplication suite.”
YouHodler allows its customers to take out cash loans that are collateralized with fiat, and said it offers interest rates of up to 12% on crypto deposits into savings accounts. Those sky-high rates come with corresponding risks including flash crashes.
Meanwhile, YouHodler’s integrated crypto exchange allows conversions to be made between fiat, cryptocurrencies, and stablecoins.
Ledger’s been busy
According to Ledger, its Vault platform is now used by a “broad customer” base including family offices, exchanges, payment companies, and custodians. Bitstamp, Uphold and Crypto.com are among some of its bigger-name clients.
Last week, a new crypto custody service called Komainu was launched. It is the brainchild of the major Japanese bank Nomura, alongside Ledger and the digital asset investment firm CoinShares.
Updated at 5:18 p.m. on June 24, 2020 to correct inaccuracies regarding the insurance offering introduced in the editing process.