The hardware wallet provider for digital assets Ledger is collaborating with FLETA, a blockchain platform for decentralized applications (dapp) based in South Korea, to provide custody services in compliance with local laws.
The French startup is looking to extend the reach of its services institutionally with Ledger Vault, building on the success of its nano wallets that primarily targeted retail cryptocurrency owners. "Ledger not only offers security in cryptocurrency storage, it also allows financial institutions to create their own governance rules," said Glenn Woo, CEO of Ledger, a leader in business expansion in the Asia-Pacific region.
Founded in 2018, FLETA launched its mainnet in November and collaborated with the Korean government to build a proof-of-concept network for the national health system, which allows for the sharing of data between different hospitals. The company confirmed that it made a private token sale in August 2018 and a public sale in 2019, but declined to disclose specific figures for either case.
Global growth
Woo said the partnership with FLETA reflects Ledger's expansion into Asia with the goal of supporting large-scale institutional clients in complying with regulators from different jurisdictions. Helping cryptocurrency companies comply with portfolio management regulations with Ledger Vault is Ledger's top priority now, Woo said.
Ledger is building a joint venture with US-based investment firm Global Advisors and Japanese financial services giant Nomura. The new company, called Komainu, will offer digital asset management services to institutional investors, helping clients to integrate cryptocurrency with traditional investment instruments such as mutual funds.
According to Woo, one of the biggest concerns for financial institutions are regulatory risks, particularly at a time when many governments are still developing their guidelines for this emerging sector. Institutions that choose to be fully compliant can spend large sums of money to get legal advice and build the proper reporting infrastructure and tools.
Regulatory challenges
Two important issues that regulators will face with companies in the crypto sector are: how to protect digital assets and how to defend the interests of investors in the event that these assets are lost.
Ledger says Vault requires multiple levels of authorization, which means more attention from a customer's operations team to withdraw resources. Ledger backs up its clients' resources with a personalized insurance policy, thanks to the collaboration with the London union of Lloyd's Arch. In November, the insurance broker Marsh signed a $ 150 million insurance policy with Arch for Ledger users Vault.
"I can say that insurance is really difficult to get for many cryptocurrency startups since there is no precedent," said Woo. Note that insurance could be critical when a cryptocurrency company aspires to be approved by financial regulators.
