Faced with a flurry of sophisticated hacking attempts, ever-evolving regulatory frameworks, and operational bottlenecks, institutions entering the virtual digital assets market are forced to look beyond traditional custody measures.
A digital assets custodian safeguards large-scale digital assets on behalf of institutions, helping them focus on expansion, scaling, and other critical operations. Besides offering secure asset custody, a digital assets custodian also helps institutions navigate the intricate regulatory environment and enhance operations efficiency through automation. A reliable digital assets custodian should be easy to integrate and must offer timely support for the resolution of issues.
The Need For Bank-Grade Security For Digital Asset Institutions
Banks in TradFi are successful because they have the trust of individuals and businesses alike. The rigorous set of security measures implemented by banks ensures that the assets are secure even in an adverse scenario. Banks embrace sophisticated technology and features like 2FA to prevent fraud, unauthorized access, or theft. On top of that, banks also provide insurance coverage for additional assurance.
Institutions jumping on the digital assets bandwagon expect custody solution providers to emulate this bank-grade security and rightly so. The digital assets market has serious security risks, rug pulls, regulatory challenges, and operational bottlenecks. Bank-grade digital assets custody is paramount to tackling these risks. But what does bank-grade security in digital assets actually mean?
Since the emergence of the traditional financial system, bank-grade security has been the gold standard for financial institutions. Reason? It encompasses the highest levels of protection and reliability. To draw a parallel between bank-grade asset custody in TradFi and DeFi, one could cite examples of custodians implementing features like multi-sig authentication and 2FA, a comprehensive insurance policy, and certifications like CCSS. This blog sheds light on the top 3 digital assets custodians with bank-grade custody.
Top Digital Assets Custody Solutions With Bank-Grade Security
Liminal Custody:
Liminal is the first custodian with a CCSS Level 3 certification for private key management and certified digital assets custody platform. It offers a robust and secure wallet infrastructure to digital assets-native businesses and institutions. Liminal allows digital assets institutions, including exchanges, OTC platforms, dapps and digital assets-native businesses to manage their digital assets securely with plug-and-play wallet architecture. One of the key outstanding features of Liminal is its zero-key leakage tolerance approach to eliminate the risks associated with digital asset transfers.
Built by seasoned wallet engineers and digital assets custody experts, Liminal offers digital assets custody solutions in 12+ countries. It already secures assets worth over $700 Million. The platform has helped 80+ businesses process transactions worth over $10,000 Million and save 1000+ manual hours.
Liminal supports 1200+ different virtual digital assets and secures 50 Million+ Web3 users from security risks in this space. Some of the outstanding features of Liminal are:
Automated Wallet Balances and Transactions
Besides securing assets, Liminal helps digital assets businesses optimize wallet balances and operational efficiency through its cutting-edge features like auto sweeping, refilling, and smart consolidation features. This ensures that funds are readily available whenever the need arises.
Firewall Monitoring for Risk and Compliance
It allows businesses define custom rules for monitoring, detection, and applying actions based on specific criteria through an intuitive rule-based configuration. The platform is also equipped with a firewall that prescreens all transactions for security, compliance, and anomaly threats, adding an additional layer of security.
Institutional Staking
Liminal allows institutions to seamlessly manage custody, maintenance, and validator run-time in staking, allowing them to stake and manage rewards in a unified manner.
Fireblocks:
Fireblocks is another enterprise-grade digital assets custody platform that secures transactions worth a whopping $4 Trillion. Trusted by 1,800+ leading digital assets businesses around the globe, the platform protects its partners from ever-evolving security threats. Fireblocks is a pioneer in world-renowned SGX and MPC technologies. It supports 50+ blockchains and all the leading token standards. The platform promises 8x transaction speed and a 90% reduction in transaction fee, as compared to legacy multi-sig systems.
Fireblocks integrates with best-in-class compliance solutions to provide real-time transaction monitoring for AML, KYT, and Travel Rule on the platform itself. It has a robust security architecture built through a combination of MPC-CMP and hardware security that eliminates single point of compromise. Some of the leading beneficiaries of Fireblocks’ enterprise-grade custody solution include exchanges, neo-banks, trading desks, and hedge funds.
Here are a few outstanding features of Fireblocks:
Reduction In Gas Fee
Fireblocks promises reductions in transaction fees (as compared to legacy multi-sig solutions) through its robust architecture, allowing institutions to scale seamlessly.
dApp Protection and Transaction Simulation
Fireblocks recently introduced its new security features – dApp Protection and Transaction Simulation, to empower institutions with real-time threat detection. The feature provides businesses using Fireblocks’ custody solution with clear insights into contract rolls, helping them keep a check on malicious activities and design effective preventive measures.
Ultra Flexible Deployment Models
Fireblocks makes it super convenient for businesses to deploy its platform with its flexible deployment models. Businesses can integrate the custody platform with their platform using SaaS, Private Cloud, or On-Prem options, leveraging MPC Wallet, Secure Enclave, or HSM for key management. Fireblocks supports Azure, AWS, GCP, and Alibaba Cloud.
Digivault:
Founded by leading IT solution delivery experts, Digivault is focused on providing bank-grade security for institutional businesses in the digital assets space. It offers both deep cold storage (Kelvin) and warm storage (Helios). Its cold storage named Kelvin, is stored in the highly secure vaults of Malca-Amit — an industry-leading vault service provider. It provides end-to-end solutions designed for Web App. Digivault’s API is easy-to-integrate and easier to manage. Real-time mobile support is cherry on the top.
One of the reasons it features in the list of digital assets custodians with bank-grade security is that it combines the best of physical and virtual security to minimize security risks and counter-party exposure. Kelvin, Digivault’s cold storage security, protects users’ private keys with ‘Key Sharding’. Also, the transactions are air-gapped to minimize the risks of hacks and breaches.
Here are a few key outstanding features of Digivault:
Multi-Layer Security Architecture
Institutions leveraging Digivault’s warm storage Helios, get enhanced security with a multi-layer security architecture. Helios leverages distributed physical storage of private keys, alongside a design that requires multiple sites to cooperate for any transaction. This eliminates a single point of failure risk.
Interoperability
Helios is equipped with a secure and seamless API for optimum interoperability with Kelvin for a unified end-user experience. This allows institutions to route and re-route their assets without any hassle or delay.
Live Trading
Digivault’s ExchangeConnect allows institutions to safely hold their assets within their Digivault FCA-registered custody account whilst trading with them on leading exchanges, including Bitfinex.
How To Choose?
Choosing a digital assets custodian with bank-grade security is crucial for institutions to safeguard their digital assets effectively. Platforms like Liminal, Fireblocks, and Digivault offer robust security features, ensuring the highest level of protection and operational efficiency. In the end, it all boils down to the same question – ‘How to choose a digital assets custody solution with bank-grade security?’
Besides the security features and easy implementation, there are a few other critical points to consider. This includes: security standard certifications, KYC/AML obligations, and operational licence in the area of operation to ensure seamless operations. It is equally important to scan the history and reputation of a digital assets custodian and ensure that they offer real-time support for timely resolution of issues.
