The firm said clearing the regulatory hurdle had the potential to drive more institutional investors towards crypto custody solutions.
Financial regulators in the U.K. have approved Digivault, the security token custody arm of digital assets group Diginex, to register as a custodian wallet provider.
In an announcement from Diginex today, the firm said the Financial Conduct Authority, or FCA, had given the green light to Digivault to register as a stand-alone digital asset custodian in the United Kingdom. The move implies Digivault i in compliance with the financial watchdog’s rules on Anti-Money Laundering and Combating the Financing of Terrorism.
According to the custodian, Digivault aims to “provide compliant and secure custody services to corporate and institutional investors in crypto assets.” The firm said its custody solutions include having digital assets in cold storage in physical vaults owned by Hong Kong-based security firm Malca-Amit.
Digivault CEO Rob Cooper told Cointelegraph that the growing view that Bitcoin (BTC) “is a true store of value for the future” has led to a greater demand for secure crypto storage solutions. A large number of institutional investors including Tesla and MicroStrategy have entered the crypto space in the last year by purchasing BTC as a reserve asset.
“The FCA AML approval is huge news not only for Digivault but also the sector as a whole because it means businesses are now moving from the temporary register to the full approval. This sets a precedent that the regulators support for this new asset class is indeed there, and is an enabler to drive more institutional flow.”
The FCA has expanded its purview in recent months as the crypto space has developed. In October, the financial watchdog announced companies in the U.K. could no longer offer crypto derivatives products including futures and exchange-traded notes. This year, the FCA said it would also require crypto firms to submit yearly financial crimes reports.