Crypto Exchange UpBit’s Operator Launches Custody Service with Ledger
DXM, a financial services subsidiary of South Korean fintech firm Dunamu, has worked with crypto cybersecurity firm Ledger to launch an institutional crypto asset custody service.
The partnership and the new custodian
Industry news outlet TheBlock reported on Dec. 4 that DXM plans to launch the custodian under the name Upbit Safe and that Ledger Vault, Ledger’s custody arm, will support the initiative with its technology. Upbit safe will reportedly use Ledger’s hardware security technology to make trading more efficient and safer for its institutional clients.
Ledger’s Head of Asia-Pacific region Glenn Woo explained that Ledger Vault offers solutions that allow institutions to customize their custody rules to better fit their needs. DXM Chief Strategy Officer Eric Yoo told the outlet that the firm plans to target UpBit’s customers first. Yoo explained the new enterprise’s outlook:
“We are a subsidiary of the largest exchange in Korea and have an advantage over our peers given that we already have a lot of assets we can bring into our custody. [...] The combination of the Upbit brand, Ledger Vault’s security technology, and DXM’s own technology will give DXM an edge in the Korean market.”
Lack of regulation hinders crypto growth
Still, Yoo admitted that institutional participation in the crypto space in South Korea is largely hampered by unclear regulation. Still, he believes that clarity should improve as soon as next year, bringing new money to the local crypto industry:
“The biggest regulatory risk in Korea is uncertainty and lack of regulations. [...] It’s quite a wild wild west out there. [...] Once regulations become clearer, it’d be easier for us to engage with institutional money and not take the risks from uncertainties.”
Woo also explained that Ledger Vault is still a new service in the space and is still trying to penetrate the market. He hopes that with his company’s help, DXM will be able to help his firm scale its operations:
“DMX has a reputation of being very secure… With the track record that they have in Korea, they can definitely help us scale.”
The number of custody services aiming to secure the crypto assets of institutions is steadily increasing as regulation is making the space more suitable for institutional investors. One of the last examples is the custody feature launched by institutional Bitcoin (BTC) trading platform Bakkt for its entire client base after obtaining regulatory approval in the first half of November.