The crypto safekeeping platform, Zodia Custody, has teamed up with SBI Digital Asset Holdings to launch crypto custody services in Japan. The partnership will see Zodia Custody working with the crypto arm of SBI Holdings to offer institutional investors crypto asset storage.
Targeting Institutional Investors
The crypto custody platform, Zodia, is supported by one of the UK’s leading banks, Standard Chartered and Northern Trust. The partnership aims to help SBI Digital Asset Holdings attract large investors interested in crypto investment and adoption but are limited by the absence of custodial services that meet the required level of the traditional finance (TradFi) sector.
Julian Sawyer, the CEO of Zodia, stated that the partnership with SBI will ensure that the joint venture offers top-notch crypto custody services to Japan’s institutional investors. Furthermore, the joint venture has a 51-49% ownership split in SBI Holdings’ favor.
But it’s subject to anti-trust and clearances for foreign direct investment along with approval from the Japanese monetary watchdog, the Financial Services Agency (FSA). The rise in crypto custodial services has been steadily increasing.
However, the recent collapse of the FTX exchange accelerates the demand for private wallets to store digital assets. FTX’s spectacular crash is regarded as one of the earth-shattering events in the crypto ecosystem.
It sent shockwaves across the industry such that centralized exchanges are now under scrutiny by regulators, with investors losing faith in them. Centralized exchanges (CEXs) are considered to have poor security infrastructure and a fragile foundation at their base.
Rising Demand For Private Crypto Custody
In addition, CEXs are operated based on the principles of trust, and it is only a matter of when before the platform collapses. According to experts, Decentralized finance (DeFi) is the answer to the constant cases of bankruptcy that have affected the crypto ecosystem because of the centralized nature of exchanges, putting them under the control of an individual.
Thus, the rising demand for private crypto custody has to do with the foundational flaws of centralized exchanges, which puts customers’ assets at the mercy of founders, as is in the case of FTX and Sam Bankman-Fried. Self-custody wallets are now the next trend among crypto investors, and institutional players are keen to embrace such development.