According to a Bloomberg report published on March 2, 2020, auditing giant KPMG has stressed that the cryptocurrency industry must improve how it secures digital assets in order to keep growing.
KPMG Emphasizes the Security of Digital Assets
Bitcoin (BTC), the first cryptocurrency developed during the aftermath of the 2008 financial crisis has been in existence for close to 12 years now. However, despite the decade-long existence, the cryptocurrency has, time and again, found itself plagued with scams and carefully orchestrated hacks that have swindled investors to the tune of billions of U.S. dollars.
Per a recent report published by KPMG, at least $9.8 billion worth of cryptocurrencies have been stolen by hackers since 2017 due to loose security or poorly written code. The accounting firm added that due to the exponential rise in the demand for major digital currencies including Bitcoin, and Ether (ETH) among institutional investors, the job of safeguarding digital assets has now become more critical than ever.
Sal Ternullo, Co-Leader of KPMG’s crypto-asset services and Co-Author of the report, said:
“Institutional investors especially will not risk owning crypto assets if their value cannot be safeguarded in the same way their cash, stocks and bonds are.”
Notably, several companies with the financial backing of major technology and financial services companies have entered the fray of crypto custody services, including the likes of Fidelity Investments, Coinbase Inc., Intercontinental Exchange Inc., and Gemini Trust Co.
The report reads in part:
“As crypto-assets proliferate, custodians have a tremendous opportunity to profit — both by earning management fees for delivering straightforward custodian services, and also by offering adjacent services only possible in the emerging crypto ecosystem.”
The Industry Must Comply with Strict KYC and AML Measures
Although the report sounds bullish on the future prospects of the nascent crypto industry, it sternly stated that the budding space must comply with heightened rules on storing digital assets for customers.
The firm said that akin to most banks and financial services firms, crypto custodians and brokers must also abide by know-your-customer and anti-money laundering rules.