A new crypto-custody service will be launched by a Hong Kong-based investment firm, in order to respond to the increasing interest in cryptocurrencies from high-net-worth institutional clients. The launching is set to take place by the end of this year. The name of the firm is Fusang Investment office. It is an asset manager focused on Asian private family offices. The opening of its Fusang Vault is slated for the fourth quarter of 2018.
Henry Chong, the CEO, was quoted by the South China Morning Post, saying: “Digital assets are akin to bearer bonds, whereby whoever that is holding the security is presumed to be the owner and there is no registration of ownership information of the security. Hence, the way we keep digital asset secured is of paramount importance.”
We didn’t get more details about the Fusang Vault’s services from the CEO. He nevertheless shared that Fusang Investment was already working with insurers so as to provide cybersecurity insurance coverage for future clients’ digital assets. Reports from SCMP note that cryptocurrency trading has been attracting more and more financial institutions. Some of them include hedge funds and asset managing firms. It then resulted in an increased number of over-the-counter (OTC) transactions and created the need for other asset safekeeping options.
Michael Novogratz, prominent hedge fund manager’s expectation is that more financial institutions come into the crypto space. He said in a speech during the Blockchain Week Korea last week that a “herd of institutional investors” is headed towards cryptocurrencies. He added in an interview with The Street that: “I think institutional investors are slowly coming to the realization that blockchain will be Internet or Web 3.0 and they’ll want to participate just like they want to participate in the Web.”
Earlier this year, Novogratz raised $250 million to launch a Galaxy, merchant bank trading cryptocurrencies, and invest in blockchain projects. According to him, institutional investors will first take part through venture-capital funds. He added that “many of them are already participating because they’ve invested in Sequoia or Polychain or Benchmark or many of the other VC funds that invest in this area.” He says the second step for these players will be to buy coins or even acquire ICOs.