It’s been two years in the making—and now, a digital asset custody service for institutional clients is officially accepting new clients.
Regulated in the Channel Islands off the coast of Great Britain, the new venture will offer custody for a variety of cryptocurrencies, including Bitcoin. In time, Komainu hopes that it will be able to tokenize and issue traditional assets such as stocks and bonds digitally using blockchain technology.
“The growth and maturity of the digital asset industry highlights the true potential for decentralized finance,” CoinShares CEO and co-founder Jean-Marie Mognetti said in a release. “What this partnership has highlighted is the need for credible and solid service providers to support industry participants. Komainu bridges the gap by bringing financial expertise and capabilities for institutional clients to feel confident their assets are in safe hands.”
In what could be a crucial feature to unlock adoption, Komainu’s hybrid custody solution can integrate with legacy financial systems.
A growing space
Komainu is the latest entrant to burst onto the scene. Last December, Fidelity Digital Assets announced that it was extending its custody service to Europe and the United Kingdom following a successful 2018 launch in the U.S.
Given how interest in digital assets is growing, it appears there will be enough clients go around. Last week, a poll by Fidelity Digital Assets suggested that almost 80% of institutional investors find something appealing in this asset class. Meanwhile, Deloitte’s annual blockchain survey recently found that 83% of respondents believe digital assets will serve as an alternative to fiat currencies (or even an outright replacement) within the next decade.
Crypto custodian Komainu’s launch comes at a time when digital assets are becoming more attractive as a candidate for inclusion in investment portfolios, “both as a source of diversification and as a countermeasure to rampant money supply expansion,” CoinShares chairman Daniel Masters said.
Peace of mind
Bridging that gap between financial expertise and security is “foundational” to Nomura’s strategy of becoming one of the “leaders in the institutional digital asset industry,” said Jezri Mohideen, the bank’s global chief digital officer.
Ledger CEO Pascal Gauthier added that such a solution was crucial given how cryptocurrencies are more prone to vulnerabilities—with some institutions having “digital assets weaponized against them without the proper security infrastructure in place.”
Specifically, Komainu was built on the belief that “decentralized finance needs to be institutionalized, regulatory compliant, and secure for institutions looking to incorporate digital assets into their investment strategies,” the firms said.
Achieving that peace of mind for would-be clients appears to be a top priority. Komainu said its goal is to help institutional investors achieve regulatory compliance—complete with insurance for digital assets and built-in security protocols to keep tokens safe.
Crypto custodian Komainu added that it would only work with clients and tokens that satisfy global anti-money-laundering (AML) regulations and know-your-customer (KYC) provenance requirements
Along with his role at CoinShares, Mognetti is taking the helm of Komainu—flanked by an executive team that has worked for traditional financial institutions. Head of operations Kenton Farmer previously worked at Credit Suisse and Hermes Fund Managers, while chief information security officer Andrew Morfill previously led Santander Group’s cyber defense arm. Head of regulatory affairs Susan Patterson has worked for the likes of Credit Suisse and UBS, and was a former regulator.