Hong Kong-based financial technology firm Diginex has launched a digital asset custody service unit aimed at institutional investors.
The unit, called Digivault, provides storage solutions for digital assets such as Bitcoin and Ethereum, a public blockchain-based distributed computing platform, Diginex says in a statement on November 12.
According to the company, the service comes at “a crucial time for the digital asset industry” which has suffered US$4.26 billion of losses from theft, scams and misappropriation of funds thus far this year, sharply up from $1.7 billion in 2018.
It says Digivault has “built scalable infrastructure for digital assets that meets the standards of institutional players”.
“A lack of highly secure, institutional-grade custody solutions has prevented widespread adoption of this asset class by institutional players,” Richard Byworth, chief executive officer of Diginex, says in the statement.
Digivault’s CEO Robert Cooper adds that the goal is to provide “air-tight cold storage custody solutions for sophisticated investors”.
“There is a gap in the market for a top-calibre custody cold storage solution that nullifies human risk, and removes all online electronic attack vectors,” he says.
Cryptocurrencies are becoming more popular among institutional investors, including hedge fund managers. US consultancy Agecroft Partners predicts that hedge funds will allocate $150 billion over the next year to the cryptocurrency and blockchain space, a five-fold increase from $30 billion currently.
Diginex is a two-year-old company that was licensed to provide asset management services and securities advisory services in 2018 by Hong Kong’s securities regulator.