Owning cryptocurrency is however considered a take a chance past institutional investors, co-ordinate to a March 2 KPMG report shared with Bloomberg. The accounting business firm estimated that more than $nine.8 billion worth of crypto has been stolen since 2022.

The findings revealed that lax security and poorly written code were responsible for almost thefts. As institutional investors adopt Bitcoin (BTC) and Ethereum (ETH) to their portfolios, securing the tokens condign a critical issue, KPMG argues.

The need to satisfy this market place need resulted in several companies offering custody services, both from traditional companies like Fidelity and Intercontinental Exchange, also as crypto players like Coinbase and Gemini.

Sal Ternullo, co-loader of KPMG's crypto nugget services and one of the written report's authors, explained that lack of proper custody is a major concern for institutional investors:

"Institutional investors especially will not risk owning crypto assets if their value cannot be safeguarded in the same way their cash, stocks and bonds are."

Opportunity for custodians

The double-edged sword of cryptocurrency decentralization is the ease with which it can be stolen and then used. Ownership of cryptocurrency is defined by only knowing the individual primal, with no ties to identities or regime records.

Though not all exploits compromised actual private keys, fairly securing funds has been challenging for existing custodians such as exchanges. Twelve of them take been hacked in 2022, including Binance, for a total of almost $300 million stolen.

Dedicated custodians are positioned to do good massively from the growth of the crypto ecosystem, according to KPMG. The firm wrote:

"As crypto-avails proliferate, custodians have a tremendous opportunity to profit — both by earning management fees for delivering straightforward custodian services, and also by offering adjacent services only possible in the emerging crypto ecosystem."

The report likewise mentioned the need to improve compliance methods for storing cryptocurrencies for customers. Anti-coin laundering and know your client regulations must be observed past all industry participants, including banks and exchanges. Only even for established institutions with mature compliance processes, KPMG believes their methodologies need to be improved in light of the "unique considerations for crypto-assets and related data-management challenges," the study states.