Crypto Custody Provider Ledger Extends Reach in Asia With New Institutional Client

Digital asset storage provider Ledger is partnering with FLETA, a South Korea-based block chain platform for decentralized applications (dapps) to provide custodian services compliant with local laws.

The French startup has been trying to extend the reach of its institutional-level services with Ledger Vault, building on the success of its nano wallets which primarily targeted retail crypto holders. 

“Ledger does not just offer the security of storing crypto, it also allows financial institutions to build customized governance rules,” said Glenn Woo, Ledger’s managing director leading business expansions in the Asia-Pacific region. 

Founded in 2018, FLETA launched its mainnet in November and has partnered with the government to build a proof-of-concept network for the nation’s healthcare system, hoping to let hospitals share private data such as research and medical records.  

The firm confirmed to CoinDesk it held a private token sale in August 2018 and a public sale in 2019, but declined to disclose specific figures for the two funding rounds.     

Scaling up

Woo said the partnership with FLETA reflects Ledger’s shift in Asia towards helping large-scale institutional clients be compliant with regulators across different jurisdiction in the region. 

“We are helping crypto companies, such as exchanges, funds and custodians, to basically abide by the regulations when it comes to wallet management,” Woo said. “Our biggest priority is Ledger Vault.” 

Ledger is in progress of building a joint venture with the U.S.-based investment firm Global Advisors and Japanese financial services giant Nomura. The new firm, named Komainu, will offer digital asset managemnet services to institutional investors while helping clients integrate crypto with traditional investments instruments such as mutual funds.

According to Woo, one of the biggest concerns for financial institutions is regulatory risks, particularly at a time when many governments are still developing their guidelines for the emerging industry. 

Institutions that choose to be fully compliant may spend large sums of money securing legal opinions and setting up the proper infrastructure and reporting tools. 

Regulatory challenges

Two major issues regulators have with crypto companies are how to secure digital assets and how to protect investors’ interest when these assets are lost. 

Ledger claims its Vault offering requires multiple layers of authorization, which in turn requires a greater degree of involvement from a client’s operations team to withdraw assets. 

“One of the big themes when it comes to regulating crypto institutions on the wallet side is to remove the central point of failure where the CEO of an exchange knows everything,” Woo said. “With this infrastructure, we aim to go into more of the regulations jurisdiction where the crypto institutions are struggling to meet the requirements of the regulations.”

Woo said Ledger further backs up its clients’ assets with a customized insurance policy, referencing the company’s partnership with Lloyd’s of London syndicate Arch.

In November, insurance broker Marsh arranged a $150 million insurance policy from Arch for users on the Ledger Vault technology platform. 

“My experience is that insurance is actually very hard to get for many crypto startups because they don’t have a track record,” Woo said, noting insurance could be critical when a crypto company seeks approval for financial regulators.  

Bitcoin Outshines Gold for First Time Since June

Bitcoin logged double-digit gains in October, outperforming gold for the first time since June.

The world’s biggest cryptocurrency by market value ended last month with a gain of 10.26 percent, snapping a three-month losing streak, according to Bitstamp data.

Meanwhile, gold gained just 2.74 percent in October, having dropped 3.17 percent in September – the biggest monthly drop since June 2018.

Bitcoin scored gains for five straight months from February to June – its longest winning streak since August 2017.

Gold, however, registered losses in February, March and April. The yellow metal did inch higher by 1.7 and 7.9 percent in May and June, respectively, although gains were meager compared to bitcoin’s 62 percent and 25.89 percent rise in the same months.

While BTC outshone gold by big margins in the five months to June, the tide turned in favor of the yellow metal in the third quarter.

Bitcoin fell by 6, 4 and 13.5 percent in July, August and September, respectively. Experts associated the sell-off with fears of Facebook’s Libra fast-tracking regulation for cryptocurrencies in general, overbought technical conditions and other factors.

Gold gained 0.23 percent and 7.65 percent in July and August, respectively, as markets priced in heightened prospects of aggressive monetary easing by the U.S. Federal Reserve and other major central banks amid escalating China-U.S. trade tensions.

The metal dropped by 3.17 percent in September, but the decline was restrained as compared to BTC’s double-digit sell-off.

Looking forward, gold may underperform bitcoin in November, as the optimism on the U. S.-China trade front may reduce haven demand for the metal.

Further, on Oct. 31, the Fed signaled that it would pause rate cuts to assess incoming data before considering lowering borrowing costs again, in part because of a potential easing of trade tensions, according to The New York Times. Gold, a zero-yielding asset, usually cheers dovish Fed policy and faces selling pressure when the central bank signals a pause or rate hikes.

Meanwhile, the seasonality is positive for bitcoin – the cryptocurrency has gained in November in six out of the last eight years. More importantly, BTC tends to pick up a strong bid six months ahead of the mining reward halving, according to historical data. The next halving event is due in May 2020.

What’s more, the ongoing rally in the US stocks may bode well for bitcoin. “Prior bitcoin bull runs were characterized by a gradual decline in equity market volatility. For example, we’ve noted its, albeit imperfect, inverse relationship with the VIX Index over longer time horizons (i.e. 2017 run-up),” analysts at Delphi Digital wrote in their monthly report.

The S&P 500 clocked a record high of $3,066 on Friday and the bull market is expected to continue on the back of three big buyers – corporations, foreign investors and US households – according to Goldman Sachs.

Bitcoin’s technical charts are also biased bullish, as seen below.

Daily, three-day and monthly charts

BTC is currently changing hands at $9,170 on Bitstamp.

Prices jumped 28 percent in the three days to Oct. 27 (above left), with trading volumes hitting the highest level since February 2018.

Additionally, the recent pullback from $10,350 to $9,000 was accompanied by a drop in volumes. A low-volume pullback is often short-lived. The 200-day MA has restricting downside since Oct. 30 (above left).

All-in-all, the path of least resistance appears to be on the higher side and prices look set to revisit resistances at $9,600 and $10,000.

The bullish case would weaken if the 200-day MA at $9,106 is breached to the downside. That would validate the bearish view put forward by the descending 5-month MA at $9,268 (above right) and will likely yield a big drop to $8,500.

Note that, BTC repeatedly failed to keep gains above the 5-month MA over the weekend. The bulls, therefore, need progress soon.

Disclosure: The author holds no cryptocurrency assets at the time of writing.

Microsoft Unveils Platform for Minting Enterprise-Ready Crypto Tokens

Microsoft wants building blockchain tokens in the cloud to be as easy as plugging in a printer.

So says Marley‌ ‌Gray, principal architect at ‌Microsoft, following the announcement Monday of the Azure Blockchain Tokens platform.

Just like printers were once a pain to set up – with a mishmash of printer types and their respective device-specific drivers – Gray says enterprise-oriented crypto tokens currently suffer from the same pitfalls.

“You can go and buy a printer or any type of device [now] and just plug it in and it works,” Gray told CoinDesk. “It’s the same analogy here for tokens and that is what we are building in Azure.”  

Announced at the Microsoft Ignite conference in Orlando, Fla., the platform allows businesses to choose from a growing set of token-building templates that conform to the Token Taxonomy Initiative (TTI) – a standards push and enterprise consortium spearheaded by Gray. 

So far there have been a number of TTI-compliant tokens built for uses like loyalty rewards, or to incentivize software teams to meet stated goals, as well as traditional financial instruments like letters of credit in trade finance. 

The TTI has already gone further than other enterprise plays in getting different and competing blockchain factions – from IBM to R3 to ethereum variants – under one roof.

“We are creating a platform in the cloud where any token within the TTI framework can snap into place,” Gray said. “So you can build applications where you want to use tokens with, for example, Dynamics, SAP, applications in the [Microsoft] Office suite or some other business automation process.”

Token taxonomy

The Azure Blockchain Tokens platform is being released alongside a host of example tokens.

They range from a Hyperledger Fabric FabToken built by IBM to Santander’s BOND token to a REWARD token from Intel and ConsenSys and many more. 

A spokeswoman for the Enterprise Ethereum Alliance (EEA), which is where Gray kicked off the token taxonomy, said that while these examples are not yet in commercial production, all the specs are there to download. A tech team can basically say, “I want one of these,” the spokeswoman said.

Gray, who is also the chair of the TTI, was keen to point out that Azure Blockchain Tokens is not just “a Microsoft thing.”

“It is definitely not,” he said. “This includes IBM, R3, Digital Asset. We are partners with them all.”

So how does interoperability work among the giants of Web 2.0?

It’s obviously the case that the IBM Blockchain Platform, for example, runs on IBM Cloud. However, Gray said there should be “portability” of these token types across clouds and networks, depending on whatever infrastructure people need.

He concluded:   

“The industry has suffered from an IBM versus Microsoft thing, Hyperledger versus ethereum, and so on. We are trying to break down those barriers.”

Stop optimizing for programmers and start optimizing for users.

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