Coinbase Custody: $1 Billion in Assets Under Management Just 12 Months After Launch

Brian Armstrong, CEO at Coinbase, one of the largest cryptoasset trading platforms, has revealed that Coinbase Custody now has approximately $1 billion in assets under management (AUM).

All Assets Are Regulated, Insured, Subjected To Internal Evaluations

On May 6th, 2019, Coinbase’s management revealed that Coinbase Custody has added more than 20 different cryptocurrencies to its platform (so far this year). In addition to providing support for a wide range of cryptos, Coinbase’s team aims to “offer a safe, regulated and insured storage platform for all the assets [its] clients request and that pass [its] internal evaluations.”

Launched on May 15th, 2018, Coinbase Custody has been adding an average of around “$150 million AUM a month” and 70 institutional clients have registered (so far) to use the exchange operator’s digital asset custodial solution. This, according to Armstrong, whose comments came during an on-stage discussion at Coindesk’s Consensus 2019 event, held on May 15th, 2019.

Armstrong mentioned that institutional investors are also looking for cryptocurrency services such as “staking and voting, [and] doing governance on-chain.” Expressing views that are similar to many other blockchain industry participants, Armstrong believes proof-of-stake (PoS)-based cryptocurrencies will be widely used as their adoption rate is “growing rapidly.”

While most institutional clients are primarily interested in Bitcoin-related investments, Armstrong said that investors are now also more open to investing in other digital assets.

First Custodian To Provide OTC Trading “Directly From Cold Storage”

During the first of this year, Coinbase Custody has been integrating new features and support and it also became “the first institutional-grade, qualified custodian” to provide staking services for cryptoassets held in cold storage (offline). Coinbase Custody is also one of the first platforms to offer over-the-counter (OTC) trading “directly from cold storage.”

Only Around 200 Institutions Are “All In” On Crypto “So Far”

According to Fred Wilson, a partner at Union Square Ventures: “The token funds and venture funds will make up the first two big institutional funds. For them [traditional institutions] to take their chips and go all in, I don’t see that in the next year or two.”

He also mentioned:

When people read in the Wall Street Journal that institutions are coming to crypto, they think Goldman is coming, but in reality, maybe 100 token funds in the US and 100 in Asia are all in so far.

Notably, Armstrong revealed that 60% of Coinbase’s “trading volume” now comes from institutions.

He added:

I would love to be in a world where people could self-custody … and still participate in exchanges, we’re talking to people at StarkWare about that.

Interestingly, Armstrong has also acknowledged that Coinbase is becoming increasingly centralized and that the exchange is “a victim of [its own] success.”

JPMorgan Pays $2.5 Million for Overcharging Cryptocurrency Fees

JPMorgan Chase has reportedly agreed to pay $2.5 million to settle a class-action lawsuit filed against the financial institution in 2018, over it allegedly overcharging customers who were buying cryptocurrencies with Chase credit cards.

According to Reuters, JPMorgan Chase was overcharging users for buying cryptocurrencies as these transactions were being classified as cash advances. As part of the deal, JP Morgan did not admit to any wrongdoing to the 62,000 members of the class-action lawsuit, but a motion filed in Manhattan federal court reads the financial institution agreed to pay customers $2.5 million, noting it will see class members get “about 95% of the fees they said they were unlawfully charged.”

It adds:

.Chase has agreed to enter into this Agreement to avoid the further expense, inconvenience, and distraction of burdensome and protracted litigation, and to be completely free of any further claims that were asserted or could have been asserted in the Action.

One of the plaintiffs, Brady Tucker, reportedly claimed JPMorgan Chase violated the Truth in Lending Act since it did not inform its customers crypto purchases were being treated as cash advances. This saw them pay higher fees, which the bank then refused to refund and led to the class action lawsuit.

At the time the lawsuit was filed JPMorgan was seemingly hostile toward cryptocurrencies, with its CEO Jamie Dimon claiming bitcoin was a “fraud.” Since then, the bank has launched its own stablecoin called JPM Coin.

As CryptoGlobe reported, a report published by JPM late last month showed that using their “intrinsic value calculation,” developed by in-house analyst Nick Panigirtzoglou, bitcoin is correctly valued after the recent halving event.

Featured image by Drew Beamer on Unsplash.