FTX Token

<p>Mike Belshe, Founder and CEO of digital asset trust company BitGo, <a href="https://n.news.naver.com/article/014/0005067880?sid&#61;105" rel="noopener noreferrer nofollow">emphasized</a> the importance of separating cryptocurrency trading and custody to prevent incidents similar to those involving Mt. Gox and FTX in his keynote speech at Impact, the main conference of Korea Blockchain Week (KBW) 2023.</p><p>Established in 2013, BitGo is currently the world’s largest provider of virtual asset custody services, serving more than 1,500 institutions in over 50 countries, including the US, Switzerland, and Germany. Major exchanges like Bitstamp, Korbit, Bullish, Gate.io, and Crypto.com entrust BitGo with safeguarding their virtual assets.</p><h2 id="header-0">Clear division</h2><p>During his speech, Belshe repeatedly stressed the need for custody services for the sustainability of the virtual asset ecosystem, asserting that separating trading and custody can enhance trust in the industry and attract traditional financial institutions.</p><p>Unlike stock markets, where payment institutions and custodians are separate entities, this kind of separation does not exist in the virtual asset market. To steer traditional financial institutions toward the virtual asset ecosystem, this issue needs to be addressed, Belshe said.</p><p>He went on to cite the <a href="https://www.investopedia.com/terms/m/mt-gox.asp#citation-17" rel="noopener noreferrer nofollow">Mt. Gox hack</a> in 2014 and the <a href="https://www.investopedia.com/what-went-wrong-with-ftx-6828447" rel="noopener noreferrer nofollow">FTX collapse</a> last year as examples that underscored the importance of virtual asset custody. Mt. Gox, once the world’s largest Bitcoin exchange, reportedly lost some 650,000 to 850,000 Bitcoins — worth more than $450 million at the time — due to a hacking incident, leading to its bankruptcy. FTX also faced insolvency after it was revealed that it inflated its assets using its native token FTT and that its management was misusing customer investment funds.</p><p>Belshe suggested that when Mt. Gox employees discovered the Bitcoin theft during the hack, it was already too late. If custody had been treated separately, the theft could have been detected much faster. Regarding the FTX debacle, he argued that even with just a few auditors, the problems in that situation could have been apprehended. FTX’s ability to provide custody of customer assets themselves led to unauthorized activities, including cross trading and insider trading, ultimately resulting in the misuse of customer funds.</p><h2 id="header-1">Korea’s favorable conditions</h2><p>Belshe also assessed that South Korea is well-positioned for the establishment of virtual asset custody systems due to its high trading volume and a solid commitment to drafting crypto-related legislation. Seven such bills are currently underway, reflecting the authorities’ determination to address problems in the ecosystem. Korea thus has the potential to establish itself as a hub in Asia, he said.</p><p>Indeed, <a href="https://medium.com/&#64;coinness.gl/hana-bank-to-establish-joint-digital-asset-custody-venture-with-bitgo-c4d9292c13e2" rel="noopener noreferrer nofollow">BitGo’s partnership with Hana Bank</a> to establish a joint venture for digital asset custody services in Korea is driven by these factors. Through its entry into Korea, BitGo aims to share its extensive knowledge and experience in digital asset business institutionalization and investor protection. It will also apply the expertise and strategies it has accumulated through close communication with regulatory authorities and supervisory agencies in various countries, including the US, to support the integration of virtual assets into the regulated framework in Korea.</p><p>Belshe commented that through this partnership, BitGo will seek to enhance its understanding of Korea and utilize its technology and expertise to boost confidence in the Korean cryptocurrency market.</p>

BitGo CEO Emphasizes Separation of Trading and Custody to Prevent Crypto Bankruptcies

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