Aug 5, 2020 at 12:00 UTCUpdated Aug 5, 2020 at 12:50 UTC.Hong Kong.Online fintech and blockchain investment platform BnkToTheFuture is moving client assets to a Hong Kong-based trust company citing a "Systemic risk" with traditional banking.
Announced Wednesday, custody provider First Digital Trust will be responsible for storing BnkToTheFuture's client crypto and fiat currency assets.
BnkToTheFuture CEO Simon Dixon told CoinDesk the most important difference will be that client money is "Legally segregated" under a trust structure, but there is no guarantee of segregation at a bank.
This means a bank can further invest client's funds at will, while assets held in a trust cannot be used for other purposes without first obtaining permission from the client.
Shifting assets to a trust would help protect them against a potential "Systemic risk event" in the banking sector resulting from expected economic disruption, Dixon said.
This, he told CoinDesk, would help develop trust among investors and help create an industry standard for crypto custodians.
The move came as Cayman Islands-based BnkToTheFuture was developing new crypto retirement plan products expected to go live later in 2020.Using FDT's trust structure will help enable clients to store assets in perpetuity for inheritance planning, according to the announcement.
First Digital CEO Vincent Chok echoed Dixon's comments, saying that, with a recession approaching, investors need a way to protect their assets from "Exposure to fractional reserve banking."
FDT is the crypto custody arm of financial services company Legacy Trust.
CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.
BnkToTheFuture Steps Away From Banks Citing Mounting Risk to Clients' Assets
Udgivet den Aug 5, 2020
by Coindesk | Udgivet den Coinage
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