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- Venture firm Two Sigma and blockchain company ConSensys have
invested $8 million into digital-asset custody provider
- The startup tackles one of the key challenges in
cryptocurrencies: safely holding digital assets in a way that
protects them from thieves but also allows the rightful owner to
get quick and easy access.
- The funds will be used to develop new products, move into
additional asset classes, and expand internationally.
A company looking to solve one of the biggest pain-points in
crypto just raised $8 million from two heavyweights.
London-based Trustology on Thursday announced it had raised funds
from Two Sigma Ventures, the early-stage investor tied to one of
the world’s largest hedge funds, and ConSensys, the blockchain
company led by Ethereum founder, Joseph Lubin.
Trustology tackles one of the key challenges in cryptocurrencies,
safely holding digital assets in a way that protects them from
thieves but also allows the rightful owner to get quick and easy
access to it, say for purposes of intraday trading. With digital
currencies, investors hold a so-called key that gives them access
to their account.
Many firms have developed processes around “cold storage,”
effectively an offline wallet. But that can make it difficult get
access to holdings quickly, making it less attractive for those
who want to trade in and out of markets quickly.
On Wall Street, custody banks such as State Street and BNY
Mellon safeguard large amounts of wealth for other institutions
while abiding by strict regulatory requirements. But
in crypto, custody firms are just emerging.
A number of notable crypto investors
have said that solving custody is one of the last remaining
challenges holding back an influx of institutional money.
Galaxy Digital Ventures and Goldman Sachs recently made a $15
million investment in crypto custodian BitGo Holdings.
Fidelity Investments has even announced a crypto custody
solution that it expects to roll out next year.
The company’s first product combines private-key protection with
fast execution capabilities by keeping the keys inside “tamper
proof” hardware pods that are hosted in secure data centers,
according to the statement. Encrypted backups are held in the
A tag line on the firm’s website sums it up: “Safer than
cold storage at hot wallet speeds.” Trustology’s founder,
Alex Batlin, previously led blockchain innovation as UBS Group
and Bank of New York Mellon.
“Trustology has developed breakthroughs in key
management and is providing support services to clients seeking
unparalleled safeguarding for digital assets,” Lubin said in a
statement. “By prioritizing security without the need to
sacrifice accessibility, Trustology will serve current digital
asset holders and attract new institutional and individual
investors to the space.”
Funds for Trustology will be used to develop new products, move
into additional asset classes and expand internationally, the
The funding comes despite a crash in the market for
cryptocurrencies. Bitcoin, the largest, has fallen 80% percent
since its December 2017 peak. Ethereum has slumped more than