Cameron and Tyler Winklevoss of the Gemini Exchange claim to have built a better vault system to protect their customers’ bitcoin and cryptocurrency assets.
Gemini Brings On a Bigger, Better Vault
One of the big questions meandering through the crypto space as of late is, “How can we ‘insure’ people’s money? What can we do to protect money and ensure it remains safe from hackers?” After so many instances involving lost funds and personal data over the years, the question makes complete sense.
One of the big problems in the crypto space is the fact that many exchanges are not employing cold storage tactics. Many of the major hacks that have occurred in the past few years, i.e. Coincheck in Japan, are largely blamed on the exchanges themselves for utilizing hot wallet storage, which is far less secure. Cold storage keeps funds stored offsite or offline so that even if the trading platform is hacked, the money belonging to customers cannot be touched.
Now, it appears many firms based in the U.S. and abroad are looking to increase their cryptocurrency holdings tenfold, which means storage needs to increase along with safety features. The Gemini Exchange is looking into these necessities with its new vault system. In addition, it’s also expanding its custody division by including up to 18 new coins such as Bread and Enjin.
Tyler Winklevoss, the company’s CEO, explains:
The maturation of crypto as an asset class depends heavily on the safety and soundness of the custodians that hold individual and institutional funds.
Now, customers have the option of garnering “instant liquidity” through the company’s offerings. They no longer need to wait to receive their assets from cold storage, but rather trades can occur in just a few minutes if not less time, ensuring customers gain access to their funds quickly and without delays.
A separate feature also allows clients such as hedge fund managers to audit and confirm asset amounts in Gemini-based accounts, providing proof to customers that their funds are accurate and well kept.
This Looks Kind of Familiar…
Gemini’s managing director of operations Jeanine Hightower-Sellitto explains:
At the end of the day, to simplify things, it’s sort of like putting your assets in a vault. You want to make sure when you want your assets, they’ll be there… It takes a lot of engineering to build and maintain this system.
What Gemini and other cryptocurrency firms are doing is no different than what standard banks, i.e. JPMorgan, Bank of New York and Citigroup, are doing with Wall Street. These banks and others like them have developed “back-office operations” to support traditional stocks and bonds. Gemini is doing the same, but for cryptocurrencies. Hence, many exchanges (or the coins they offer) are becoming far more in line with their traditional counterparts.