{"id":5686,"date":"2023-11-21T11:09:21","date_gmt":"2023-11-21T18:09:21","guid":{"rendered":"https:\/\/jasonsblog.ddns.net\/?p=5686"},"modified":"2023-11-21T11:09:21","modified_gmt":"2023-11-21T18:09:21","slug":"wyoming-based-custodia-brings-secure-bitcoin-storage-to-wyoming-other-states","status":"publish","type":"post","link":"https:\/\/jasonsblog.ddns.net\/index.php\/2023\/11\/21\/wyoming-based-custodia-brings-secure-bitcoin-storage-to-wyoming-other-states\/","title":{"rendered":"Wyoming-Based Custodia Brings Secure Bitcoin Storage To Wyoming, Other States"},"content":{"rendered":"\n

It’s a fact that Bitcoin will never die, as it’s a trustless distributed protocol<\/a> outside the reach of any one government or country, with no central body which can manipulate it. But will the developed nations in the west once they introduce their central bank digital currencies allow it to still be accessible and usable? The KYC and AML regulations already make it onerous to obtain and convert to dollars, but it has also become a wonderful store of value which is deflationary, currently worth $36,856. And when you think of Bitcoin as a payment protocol along the lines of Visa and MasterCard capable of global payments in minutes with low fees, the market cap of $723 billion makes sense especially as the payment megacorps get greedier and greedier. And many of the wealthy have bought large stakes themselves using brokers, so will they protect their investment and plans for the technology? But as the article shows, it’s becoming more institutionalized within banking as it refuses to whither and go away.<\/p>\n\n\n\n

https:\/\/cowboystatedaily.com\/2023\/11\/20\/wyoming-based-custodia-brings-secure-bitcoin-storage-to-wyoming-other-states\/<\/a><\/p>\n\n\n

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Bitcoin will never die. That\u2019s the bet Caitlin Long is making with her Wyoming-based digital asset bank, which has just announced that it can now safely store bitcoin assets.<\/h5>\n\n\n\n

By Ren\u00e9e Jean<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Bitcoin will never die. That\u2019s the bet Caitlin Long is making with her Wyoming-based digital asset bank, which has just announced that it can now safely store bitcoin assets.<\/p>\n\n\n\n

It\u2019s called custody in crypto circles, but it just means that an organization securely holds the digital key that opens a digital asset such as bitcoin, which many in this sector see as the equivalent of gold, just in a digital format that\u2019s more secure and easier to move.<\/p>\n\n\n\n

\u201cIt doesn\u2019t matter what people think about (bitcoin) honestly,\u201d Long told Cowboy State Daily. \u201cIt\u2019s not going to die. Regulators in Washington, D.C., had clearly hoped they would be able to kill it, but they have failed.\u201d<\/p>\n\n\n\n

Long has seen several signs recently that the regulatory door is starting to, be forced open, at least a crack, by that reality.<\/p>\n\n\n\n

\u201cThe Fed, in August, announced that it has a new, novel activity supervision program,\u201d Long said. \u201cSo, it went from saying essentially, \u2018Hell no\u2019 in January to in August saying there\u2019s a novel activity supervision program being set up, and it\u2019s going to reach out to the tech industry fintechs, academics and the banking industry for help.\u201d<\/p>\n\n\n\n

Concurrent with that, the Security and Exchange Commission\u2019s court losses have been piling up when it comes to cryptocurrency assets. In the most recent loss, courts rejected the federal regulator\u2019s reasoning for blocking Grayscale\u2019s giant bitcoin trust from converting to an exchange-traded fund, pointing to what it said were inconsistencies in its treatment of exchange-traded funds (ETFs) tied to bitcoin derivatives. Grayscale\u2019s proposed product is to be built on actual bitcoin.<\/p>\n\n\n\n

A more significant defeat before that case was the rejection of an oft-repeated position by the SEC that basically all cryptocurrencies are securities. That had been central to the federal regulator\u2019s case against Ripple\u2019s XRP cryptocurrency.<\/p>\n\n\n\n

A Safe Way To Custody Bitcoin<\/h4>\n\n\n\n

Custodia Bank\u2019s first offering was U.S. dollar deposits, including Fedwire Funds and ACH services, working through a partner bank, which was announced earlier this year.<\/p>\n\n\n\n

Bitcoin custody, though, has long been Custodia\u2019s reason for being. Long is quick to advocate self-custody for people owning bitcoin, but businesses can\u2019t really do that. SEC laws don\u2019t allow asset managers to both manage and provide custody services for client assets. As a result, investment fiduciaries typically use third-party custodians for all asset types as a matter of routine, even if it\u2019s not a security.<\/p>\n\n\n\n

Long believes that has created a window of opportunity for a safe, secure bitcoin custody service.<\/p>\n\n\n\n

\u201cWe have built our own custom platform without relying on third-party integrations,\u201d she said. \u201cThat\u2019s the safe way to do bitcoin custody.\u201d<\/p>\n\n\n\n

Several high-profile failures at other companies have been caused by piecing together third-party infrastructure, Long said.<\/p>\n\n\n\n

Third-party infrastructure \u201cis one of the things that bank regulators don\u2019t like,\u201d she said. \u201cBecause third parties can be security holes. So, if you\u2019re doing Bitcoin custody, you really do need to build your own platform, which is what we did.\u201d<\/p>\n\n\n\n

While Custodia will be able to convert bitcoin to U.S. dollars, Long is quick to stress that the bank is not serving as an exchange. Down the line, one of the services Custodia is working to offer is connection to entities that are exchanges.<\/p>\n\n\n\n

\u201cWe believe from a control basis that that\u2019s the right approach,\u201d she said. \u201cIt clearly was dangerous for exchanges, custodians and money managers all to be the same legal entity. That\u2019s part of the fraud that we\u2019ve seen in this industry.\u201d<\/p>\n\n\n\n

Chief among the most recent examples of that danger is the FTX crytpocurrency exchange, whose spectacular failure has stoked widespread mistrust in the cryptocurrency industry, leading to a regulatory crackdown.<\/p>\n\n\n\n

\"Custodia<\/figure>\n\n\n\n

First To The Table<\/h4>\n\n\n\n

Custodia\u2019s announcement makes it the first of Wyoming\u2019s Special Purpose Depository Institutions to provide live, digital asset management.<\/p>\n\n\n\n

\u201cKraken applied before we did and got their SPDI charter before we did,\u201d Long told Cowboy State Daily. \u201cAnd of course, they\u2019ve been operating as an exchange globally for almost a decade, but their Wyoming SPDI bank, to my understanding, is not operating yet.<\/p>\n\n\n\n

\u201cSo yes, Custodia is the first of the Wyoming legal entities that got bitcoin custody up and running, and we\u2019re actually the first of the Wyoming legal entities that got U.S. dollar services up and running as well.\u201d<\/p>\n\n\n\n

The bank doesn\u2019t solely operate in Wyoming, however. It has branches operating as Custodia Bank in California, Colorado, D.C., Florida, Indiana, Kansas, Maryland, Massachusetts, Missouri, New Hampshire, Puerto Rico, South Carolina and Vermont.<\/p>\n\n\n\n

It\u2019s operating as Custodia Digital Services in Alaska, Alabama, Georgia, Minnesota, Montana, North Dakota, Nebraska, Pennsylvania, Rhode Island, Texas, Utah, Virginia, West Virgina and Washington.<\/p>\n\n\n\n

The arrival of bitcoin custody has been a long time coming for Custodia, which has survived significant obstacles along the way.<\/p>\n\n\n\n

Earlier this year, the Federal Reserve rejected Custodia\u2019s application for a master account in an 86-page order which, aside from the eye-popping length, contained several new policy statements. Taken together, those statements appear to be rejecting Wyoming\u2019s state charter for digital asset banks in general.<\/p>\n\n\n\n

Custodia has filed a lawsuit over the handling of its application for a master account. Wyoming, meanwhile, tried to join the suit, although a judge rejected it.<\/p>\n\n\n\n

The case is set for a bench trial in April after the Federal Reserve tried and failed three times to get the case tossed out.<\/p>\n","protected":false},"excerpt":{"rendered":"

It’s a fact that Bitcoin will never die, as it’s a trustless distributed protocol outside the reach of any one government or country, with no central body which can manipulate it. But will the developed nations in the west once they introduce their central bank digital currencies allow it to still be accessible and usable? […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"class_list":["post-5686","post","type-post","status-publish","format-standard","hentry","category-tech"],"blocksy_meta":[],"featured_image_src":null,"author_info":{"display_name":"Jason","author_link":"https:\/\/jasonsblog.ddns.net\/index.php\/author\/jturning\/"},"_links":{"self":[{"href":"https:\/\/jasonsblog.ddns.net\/index.php\/wp-json\/wp\/v2\/posts\/5686","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jasonsblog.ddns.net\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jasonsblog.ddns.net\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jasonsblog.ddns.net\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/jasonsblog.ddns.net\/index.php\/wp-json\/wp\/v2\/comments?post=5686"}],"version-history":[{"count":1,"href":"https:\/\/jasonsblog.ddns.net\/index.php\/wp-json\/wp\/v2\/posts\/5686\/revisions"}],"predecessor-version":[{"id":5688,"href":"https:\/\/jasonsblog.ddns.net\/index.php\/wp-json\/wp\/v2\/posts\/5686\/revisions\/5688"}],"wp:attachment":[{"href":"https:\/\/jasonsblog.ddns.net\/index.php\/wp-json\/wp\/v2\/media?parent=5686"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jasonsblog.ddns.net\/index.php\/wp-json\/wp\/v2\/categories?post=5686"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jasonsblog.ddns.net\/index.php\/wp-json\/wp\/v2\/tags?post=5686"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}