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As institutional investors allocate more capital to crypto investments, custody solutions are becoming more important.
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Digital asset business Fineqia AG has partnered with crypto custodian Copper to provide custody solutions for its exchange-traded note (ETN) business — a move the company says will bolster the reliability and transparency of its products.
Under the new agreement, Copper will safeguard the underlying assets held in Fineqia’s ETNs, which include the Fineqia FTSE Cardano Enhanced Yield ETN, a product that provides direct exposure to Cardano (ADA). The product had more than $45 million in assets under management as of Jan. 29.
The Cardano ETN began trading on the Vienna Stock Exchange roughly 10 months after Fineqia AG was initially granted approval.
The company’s prospectus allows its ETNs to hold other cryptocurrencies, including Bitcoin (BTC), Ether (ETH), Avalanche (AVAX) and Tron (TRX).
Copper is a London-based custodian that is backed by British multinational bank Barclays.
The partnership underscores the growing importance of custodial services for asset managers seeking to attract institutional capital to the crypto space. Through the Copper partnership, Fineqia aims to protect customer assets “from theft, loss or unauthorized access,” the company said.
Cointelegraph reached out to Fineqia AG for comments but did not receive an immediate response.
Related: Coinbase urges US regulators to remove crypto banking barriers
The growth of institutional custody
Crypto firms are rushing to fill the gap in the qualified custodian market, especially in North America, where institutional demand for digital assets has been ramping up.
Last year, infrastructure providers Taurus and Fireblocks expanded their custodial businesses in the region, joining established players like Kraken and Coinbase, which custody digital assets on behalf of institutional clients.
In September, US crypto custodian BitGo established a regulated platform for custody services for Web3 protocols.
In December, Crypto.com announced it too was launching a US institutional custody service. The decision was prompted by the election of Donald Trump and the prospect of improved regulations in the United States.
The exchange also dropped its lawsuit against the Securities and Exchange Commission, citing its “intent to work with the incoming administration on a regulatory framework for the industry.”
Meanwhile, Coinbase has been urging regulators to confirm that financial institutions are allowed to serve crypto businesses. According to Bloomberg, the exchange asked the Federal Deposit Insurance Corporation to clarify whether chartered banks can provide crypto custody and execution services.
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This article first appeared at Cointelegraph.com News
