G4S Has Announced It Will Be Venturing Into Cryptocurrency Custody Solution
Multinational company G4S is well known for its security and prison services. But now the firm is offering custodial services of a very different nature.
UK-based security firm G4S provides a wide range of security services, operating a network of prisons and detention centres, providing security for events and storing huge amounts of money for many companies. But now G4S has announced it will be venturing into cryptocurrency custody solution. The global security service provider will offer a cryptocurrency custody service aimed at protecting people’s digital assets from criminals. It is the FTSE 250 company’s first foray into the fast-growing digital asset industry but seems to have come at the right time.
A lack of trusted custody solutions is presenting a huge barrier to institutional investors thinking of entering the cryptocurrency market. According to American cybersecurity company Carbon Black, around $1.1 billion of cryptocurrency was stolen in the six months of 2018. A big chunk of this was stolen from exchanges who are often targeted by hackers. An example of this is the $500m hack of Japanese exchange Coincheck in January.
Tracing stolen coins can prove very tricky because most cryptocurrencies are held anonymously. In fact, criminals have gone as far as to kidnap people in order to extract their crypto assets from them. Therefore, cybersecurity is a big issue for many crypto exchanges seeking secure storage solutions and the crypto custody sector is beginning to take off.
Already in 2018, a number of existing crypto companies and traditional finance firms, including Nomura, Goldman Sachs, Northern Trust, Coinbase and Bakkt, have been developing their own security measures. Plus, global investment giant Fidelity announced just week how it is launching its own custody company for the digital currency. They have all introduced products and services featuring security solutions developed for people who don’t really feel at ease putting in their very own virtual asset garage answers.
These companies are hoping that their approaches to securing virtual belongings will restore confidence in institutional investors who have previously been deterred by the threat of cyber theft. G4S got involved in providing secure storage options to a cryptocurrency exchange based in Europe.
In a statement, Dominic MacIver, the senior risk analyst at G4S’s risk consulting division, said:
“The sector has attracted the same old threats for financial systems including robbers, scammers, market manipulators, and many others. Our innovative security solution helps protect against some of those threats by taking the assets offline and storing them in high-security vaults.”
Before now, digital coins have often been stored in ‘hot wallets’ or online customer accounts which are accessed via the internet leaving them more vulnerable to be hacked into. But custody experts are now developing so-called ‘cold storage’ services, where private keys are stored on a hard drive and kept separately from the internet.
Now, for the first time ever, G4S will be offering crypto protection via a ‘secure vault storage’ service that can be accessed anywhere in the world. This means crypto holders can enjoy extra peace of mind with the product’s additional protection which uses technology to fragment private keys and put them on storage devices in secret closely guarded locations – safely out of the reach of cyberthieves and armed robbers.
Holders can access their digital funds using a unique alphanumeric password which works in a similar way to a bank card PIN. It is vital that this key is protected from cyberthieves.
G4S will apparently charge customers according to how many different offline storage devices they use to store their private keys. It will be using its own existing vaults for the service, rather than building new facilities.
By Joy Lewis.