Investable cryptocurrency holdings will be powered by BlockVault Inc., a new subsidiary that provides institutional-grade custodial and investment services for blockchain assets
Goldmoney Inc. today unveiled the addition of vaulted Bitcoin and Ethereum as secure and fully-reserved offline investable assets within the Goldmoney® Holding, a major enhancement that allows qualified clients to buy, sell, and exchange cryptocurrencies with nine global currencies as well as gold, silver, platinum and palladium bullion. With today’s launch, Goldmoney becomes the world’s first publicly traded and regulated financial service to offer insurable, auditable, and Anti-Money Laundering (“AML”) compliant exposure to cryptocurrencies.
For over 15 years, Goldmoney has been the market leader and original innovator providing direct online access to securely vaulted and insured precious metals. As the market for blockchain assets continues to grow, Goldmoney clients have approached the Company seeking ultra-secure and financially transparent solution for custody of blockchain assets, where an institutional-quality solution still does not exist in the digital asset marketplace. As a result of many months of engineering and product development to meet client demand, the Company is pleased to offer the following services and innovations for eligible Goldmoney Holding owners:
- Buying and selling of digital assets that are safely secured in vaulted cold storage. Cryptocurrency offerings currently include Bitcoin and Ethereum; additional leading digital assets will be added over time.
- Funding of Goldmoney Holdings with 50 types of cryptocurrency, enabling wallet holders to sell a variety of cryptocurrencies and fund their Goldmoney Holding with fiat currency to access precious metals and other Goldmoney service offerings.
- Will seek the establishment of peer-to-peer (“P2P”) lending capabilities on digital assets in partnership with Lend and Borrow Trust, allowing owners of Bitcoin and other assets to safely borrow against their positions.
ColdBlocks by BlockVault to be launched by year end: Cryptographic innovation for the reification of blockchain cryptocurrencies into institutional-grade investable assets
Trillions of dollars in managed institutional money cannot currently be invested in public blockchain assets such as Bitcoin due to a lack of custodial transparency, institutional-grade insurance, AML standards for chain of integrity, and auditability under IFRS or GAAP accounting standards. Other issues such as counterparty risk in settlement and custody and regulatory compliance also preclude qualified custodians and regulated institutions from participating in the space. ColdBlocks by BlockVault endeavours to solve these industry constraints.
Like London Bullion Market Association (“LBMA”)-approved precious metal bullion, ColdBlocks are prefilled units of cryptocurrency that, through a novel cryptographic method and a physical security aspect, are insurable and auditable as vaulted-custodial assets at any LBMA-eligible vault location around the world that currently secures precious metals. ColdBlocks can be created using any SHA-256 cryptocurrency and have other features that ensure the chain of integrity for the underlying cryptocurrency, knowing precisely where and when each unit was mined and ensuring the cryptocurrency value is never commingled with those belonging to other clients. Through Goldmoney’s experience and expertise in dealing and vaulting precious metals with analogous requirements and standards, the Company’s new BlockVault subsidiary is well positioned to deliver such solutions.
Due in part to the market opportunity, BlockVault will offer ColdBlocks cryptocurrency vaulting and dealing as a B2B API offering. Additionally, a sales team of financial services industry professionals will be hired in the Company’s Toronto office to build the new business line by offering these services to regulated financial service providers, brokerage firms, investment managers, and high-net-worth-individuals.
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While institutional markets wait for a bitcoin ETF or other inefficiently-securitized financial structures, we’ve applied our first-principles approach to lowering counterparty risk and increasing accessibility in precious metals to develop a novel solution for secure and insured ownership of blockchain assets,” said Goldmoney CSO Josh Crumb, inventor of the ColdBlocks standard. “
With today’s launch of digital asset dealing and cold storage custody, Goldmoney becomes one of the first publicly traded financial service companies to offer custody services for blockchain assets and one of the only market providers globally with fully transparent and audited Company financials; assurance of one-for-one backing of offline cold storage; and best-in-class regulatory oversight, including know-your-customer (“KYC”) AML policies. With nearly $2 billion in client assets and more than 1 million user signups, Goldmoney has immediately established itself as one of the largest and most well-capitalized providers in the digital asset and cryptocurrency sector.”
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s the market for Blockchain assets and cryptocurrencies has transitioned from its original premise of powering payments and remittances with a decentralized proof-of-work token to becoming a nascent speculative asset class, it has been perplexing to watch multiple technology companies serve as custodians for these assets – often safeguarding billions of dollars of wealth – while providing nearly zero accountability, transparency, or compliance with what are the most basic standards in the financial services industry,” said Goldmoney CEO Roy Sebag. “
For example, not one of the five leading cryptocurrency custodians publishes an annual or quarterly audit, which has undoubtedly prevented most institutional investors from participating in the cryptocurrency space. The idea for ColdBlocks came about when one of our leading institutional investors asked us to devise a way for regulated hedge funds to buy and sell cryptocurrencies while providing the regulatory assurances mandated by their prospectus offering under securities-law. We have invested significantly in R&D over the last few months and used our experience and relationships in cryptography, vaulting of physical assets, insurance, financial regulation, and investment management best practices to develop our first-to-market solution.”
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While we’re excited to launch these new services and solve these persistent challenges for our clients, we feel it’s important to remind investors that there are still significant risks when investing in this nascent asset class. Blockchain assets can likely never achieve the store of value, low volatility, and duration risk-free properties of precious metals, as precious metals possess these three related properties physically in nature – not due to economic theory or network effects in markets. While cryptocurrencies likely possess revolutionary new forms of information utility and transactability, and may be an important asset class for speculation, diversification, hedging the risks and unintended consequences of extreme-centralization in markets, we remain cognizant of the risk that any or all of these assets may ultimately lose all of their value or be deemed illegal by local governments or regulators. It is with this view in mind that we proceed cautiously yet optimistically on behalf of our stakeholders, but continue to value capital preservation over short-term gains when inappropriately risk-adjusted,” added Crumb and Sebag in a joint message to clients and shareholders.
