Accounting giant KPMG says that almost $10 billion worth of crypto has been stolen by hackers since 2017.
A new report from KPMG says one reason institutional investors haven’t been embracing cryptocurrency is because its difficult to secure and store.
The report says that institutional investors won’t risk investing in cryptocurrency if they can’t be guaranteed their investments will be safeguarded.
“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,” Sal Ternullo, co-leader of KPMG’s crypto-asset services and co-author of the report, told Bloomberg.
Custody solutions have begun to emerge however, provided by institutionally focused companies including Fidelity Investments, Intercontinental Exchange, Coinbase and Gemini Trust Co.
Being Your Own Bank Can Be Dangerous
As most cryptocurrency holders understand, there are significant dangers with being your own bank – whoever owns the private keys or the seed phrase owns the cryptocurrency and there’s no third party to complain to if it’s stolen.
But KPMG sees this as an opportunity, as much as a drawback.
“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,” KPMG said in its report.
Securing crypto assets has proved challenging for many exchanges. Twelve exchanges were hacked in 2019, including Binance with hackers making off with almost $300 million.
The report also said compliance methods associated with crypto storage needed to be improved, highlighting anti money laundering and know your customer identity verification checks.