BitGo and Swan Bitcoin have unveiled plans for the establishment of a Bitcoin-only trust in the United States, pending regulatory approval, as announced on September 15. This forthcoming entity will handle trust-related activities like Bitcoin safekeeping, management, and administration for beneficiaries . The primary objective is to provide Bitcoin custody services while avoiding the coexistence of other altcoins within the same structure, mitigating potential risks associated with multiple digital assets.
Swan Bitcoin CEO, Cory Klippsten, underlined that they have received feedback from prominent customers, partners, and Bitcoin-focused companies, indicating a preference for a Bitcoin-centric software and service stack, concentrating on optimal custody leveraging Bitcoin's distinctive attributes. Although Klippsten mentioned that discussions with state regulators are ongoing, they have yet to formally submit regulatory applications. Currently, they are assessing potential acquisition options.
BitGo specializes in digital asset security and custody services, offering support for over 700 cryptocurrencies. In contrast, Swan focuses exclusively on Bitcoin, allowing users to invest in Bitcoin via one-time or recurring purchases, with records hosted at Fortress Trust and Bakkt, while BitGo acts as a custodian for cold storage.
The joint venture will specifically target institutional investors, including asset managers, pension funds, family offices, governments, and corporate treasuries. It will offer various Bitcoin-related services such as cold storage, fraud prevention, anti-money laundering measures, and know- your-customer protocols.
Institutional investors are becoming a rapidly expanding market within the cryptocurrency space in the United States, especially as major asset management companies seek regulatory approval for spot Bitcoin exchange-traded funds (ETFs). Many prominent Wall Street banks, such as Bank of New York Mellon and Deutsche Bank, provide cryptocurrency custody solutions to institutional investors.
Klippsten also noted that they anticipate the approval of several ETFs in 2024, attracting new entrants to the Bitcoin market who will be seeking reputable partners with technical expertise. The US Securities and Exchange Commission (SEC) has yet to make a decision regarding Bitcoin spot products , and analysts speculate that a decision may be postponed until early 2024 as the deadline approaches.
Mike Belshe, CEO of BitGo, emphasized the collaborative efforts that have spanned nearly a year to create a robust qualified custody model. He expressed their recognition of the opportunity in early 2023 to develop a pure-play Bitcoin custodian that combines the unique strengths of both companies, supporting the ongoing advancement of Bitcoin with cutting-edge innovation.
