Cryptocurrency Offline Storing System Developed by Security Services Giant G4S
The custody solution targets virtual asset exchanges as well as institutional investors.
UK-based multinational security firm G4S has launched an offline cryptocurrency storing system in a bid to expand the company’s presence outside of its traditional source of revenue – cash transportation services. The new virtual asset custody offers “physical security to a sector at the cutting edge of financial technology,” according to a press release from Tuesday.
G4S, which operates in around 90 countries around the globe, turned to the crypto industry due to the rise in popularity of virtual coins and higher demand from its clients. The company decided to offer an offline vault storage: the system breaks cryptocurrencies up into independent parts, which as separate fragments have no value, and then store them in vaults. That process significantly reduces security vulnerabilities compared to custodian services offered by some crypto exchanges and online wallets, according to the G4S.
An offline or cold storage means that virtual coins are put in devices without internet connection in contrast to an online or hot system.
“Access to these sites is heavily restricted with multiple layers of security and robust protocols, and only when all the fragments are combined with specific technology can they unlock access to the value stored within,” Dominic MacIver, a senior risk analyst at G4S, said in the company’s statement.
Recent criminal attacks including the $530 million Coincheck hack in January have created uncertainty among institutional investors despite their desire to enter the market, according to G4S. Established virtual asset exchanges also search for reliable custodian services as a way to prevent thefts and to invest in secure infrastructure.
“The original goal of cryptocurrencies was to redesign the fundamental architecture of money. Although some early adopters have made enormous returns, the sector has attracted the same old threats for financial systems, including robbers, scammers, market manipulators and many others,” MacIver explained.
“It has been a justified cliche to describe the cryptocurrency space as a Wild West.”
The custodian services market has become very competitive with several major crypto and traditional players entering it including the recent BitGo US custody approval, the Goldman Sachs plan for offering that type of service to virtual asset funds, or the Coinbase custody platform for institutional players.