Key Points:
- Swan Bitcoin partners with BitGo to create a Bitcoin-only trust company, prioritizing security.
- Swan Bitcoin’s Bitcoin-only custodian aims to minimize customer exposure to the broader crypto market.
- The partnership addresses the demand for specialized Bitcoin solutions and advanced custody services.
In response to recent uncertainties faced by its users, Swan Bitcoin has unveiled plans to create a Bitcoin-only trust company in collaboration with BitGo, a prominent cryptocurrency custody provider. This strategic partnership addresses the increasing demand for Bitcoin-specific solutions while prioritizing security and custody within the Bitcoin ecosystem.
Swan Bitcoin and BitGo Join Forces for Trust Company
The announcement comes as Swan Bitcoin’s CEO, Cory Klippsten, sheds light on the company’s approach to safeguarding Bitcoin assets. Swan Bitcoin intends to acquire an existing trust company or build one from the ground up. If the acquisition route is chosen, they aim to have the service available to customers by Q1 2024. In the case of building a new trust, they plan to go live by Q3.
Klippsten emphasized the ongoing collaboration between Swan Bitcoin and BitGo, which has securely stored Swan users’ custodied coins in cold storage since June. He clarified that Fortress, another cryptocurrency entity, has limited access to Swan clients’ coins, primarily when fulfilling withdrawal requests.
BitGo’s CEO, Mike Belshe, echoed Klippsten’s statements, emphasizing the close partnership and the joint efforts to create a robust Bitcoin-only custodian. This development follows the bankruptcy filing of Prime Trust, Swan Bitcoin’s previous preferred custody partner, which claimed a shortfall of customer funds.
Swan Bitcoin’s Vision for a Secure Bitcoin Custodian
Despite Swan Bitcoin’s association with Fortress, recently acquired by Ripple, Klippsten seeks to provide a Bitcoin-only custodian that addresses customer concerns and minimizes their exposure to the cryptocurrency ecosystem. Swan Bitcoin actively discourages customers from keeping Bitcoin on its exchange, aligning with industry best practices.
The forthcoming Bitcoin-only custodian is expected to cater to Swan Bitcoin’s users and company treasuries, asset managers, governments, and similar services. Swan Bitcoin’s CTO, Yan Pritzker, highlighted the unique features of the trust company, including advanced wallet management, enhanced key control, inheritance planning, and adaptability to emerging Bitcoin standards.
While some competitors in the Bitcoin-only brokerage sector, like River, have in-house custody solutions, Swan Bitcoin’s move towards a dedicated Bitcoin-only custodian aligns with the industry trend. Klippsten emphasizes the increasing demand for Bitcoin-focused services, highlighting the potential risks of alternative cryptocurrencies.
Conclusion
Swan Bitcoin’s partnership with BitGo to establish a Bitcoin-only custodian reflects a growing need for specialized Bitcoin solutions in the cryptocurrency landscape. With an emphasis on security and customer satisfaction, this strategic move aims to provide users with a reliable and secure way to manage their Bitcoin assets while mitigating the risks associated with the broader crypto market.
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