Hong Kong Firm to Launch Crypto Custody Services to Meet Institutional Investor Demand

Omar Faridi
  • Hong Kong and Singapore-licensed Fusang Investment Office will soon offer crypto custodial services.
  • Fusang Investment CEO Henry Chong stated that “the way we keep digital assets secure is of paramount importance.”

Fusang Investment Office, an asset management firm serving private Asian family businesses, will reportedly launch cryptocurrency custodial services for in Hong Kong. The service will be called Fusang Vault, and it’s expected to be introduced in Q4 2018.

Fusang Investment CEO Henry Chong stated that partnering with an independent third party specializing in the crypto sector was required in order to offer the crypto-custody services, as it will need to hold and periodically audit clients’ digital assets.

The University of Oxford graduate noted that his company was planning on providing insurance services for its customers’ crypto assets. Speaking to the South China Morning Post, Chong said:

Digital assets are akin to bearer bonds, whereby whoever that is holding the security is presumed to be the owner and there is no registration of ownership information of the security. Hence, the way we keep digital asset secured is of paramount importance.

Henry Chong

Meanwhile, Jolyon Ellwood-Russell, partner at law firm Simmons & Simmons, said that crypto-custody services were not yet regulated. This means that if a user’s crypto funds are lost or stolen, then they will have to rely on only the terms and conditions of their custodian services contract.

He also stated that there were several issues not addressed in the custodial services contract:

For example, in what capacity are the custodians holding the assets? Are they holding them as a bailment, that is, a trust, so the assets are outside the estate of the custodian on an insolvency. Just having segregated accounts does not automatically mean that on an insolvency the investors assets will be protected or recoverable from a receiver or liquidator.”

Jolyon Ellwood-Russell

Institutional Investor Demand

Despite Jolyon’s skepticism regarding custodial services for digital assets, several crypto companies already offer them. Notably, institutional investors have been “waiting on the sidelines” when it comes to cryptos, partly because of a lack of custodial services.

San Francisco-based cryptocurrency exchange Coinbase recently launched custodial services for cryptocurrencies in an attempt to tackle the problem. The company revealed their new service helps safeguard their clients’ assets by requiring multiple signers for all transactions.

The exchange’s crypto custody services also help customers keep their digital funds safe by setting withdrawal limits and providing audit trails. As recently covered, billionaire investor Mike Novogratz believes a “herd of institutional investors” is starting to move into crypto.

Binance Plans Launch of Fiat-to-Cryptocurrency Exchange in South Korea

Samuel Haig

Leading crypto exchange Binance is rumored to be planning the launch crypto-to-fiat exchange in South Korea.

Local media outlet, Block in Press, quoted Changpeng Zhao (CZ), the founder and chief executive officer (CEO) of Binance as stating: “We do not know the details related to the establishment of the Korean branch. We are working with local partners, but we do not know the details." A Binance representative also reportedly told the publication, “We have been in discussions with BXB, but there is no specific decision.”

Binance Seeks Compliance Officer Based in South Korea

Binance is currently seeking to hire a Compliance Officer based in South Korea, further evidencing the company’s intent to open a Korean exchange. The advert for the position specifies that the candidate must possess “Good knowledge on provisions of local laws, directives, regulations and otherwise standards applicable to subject persons and knowledge of upcoming regulation of virtual currency policies is a strong plus.”

Rumors of a potential South Korean Binance exchange first surfaced in January 2019, when The Block reported South Korea to be among 8 countries that the company was considering opening a new branch in.

Binance South Korea Would Comprise Binance’s Fourth Fiat-to-Cryptocurrency Exchange

On July 10, 2019, Binance fully launched its crypto-to-fiat exchange in Singapore. The exchange was launched in partnership with Vertex Ventures China and Vertex Ventures Southeast Asia and India.

Binance SG supports Bitcoin (BTC), Ethereum (ETH), and Binance Coin (BNB) pairings, with customers able to deposit Singaporean dollars (SGD) via the Fast and Secure Transfers (FAST) electronic funds transfer service. Binance SG has expressed to add support for more cryptocurrencies in the future. Binance SG had previously conducted a soft-launch during April 2019, with the exchange reported an average weekly user growth of roughly 20% since then.

During October 2018, the company launched Binance Uganda, with the platform facilitating BTC and ETH pairing denominated in Ugandan shillings (UGX). During January 2018, Binance launched its first fiat-to-crypto exchange in the Crown dependency of Jersey. Binance Jersey supports Euro (EUR) and British Pound (GBP) pairings for BTC and ETH, and currently has a 24-hour trade volume of roughly $380,500.