KPMG, one of the Big Four accounting firms said on Monday that the cryptocurrency industry which is valued around $245 billion needs to enhance its methodologies in securing digital assets to ensure steady growth.
The adoption of digital currencies, particularly Bitcoin (BTC) and Ether (ETH) among institutional investors has resulted in competition for a place in portfolios, thereby increasing the need to keep these cryptocurrencies secured, according to the accounting firm.
While emphasizing the need to safeguard cryptocurrencies, the co-leader of KPMG’s crypto-asset services, Sal Ternullo explained that “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.”
KPMG’s report today is coming in response to several hacks that hit the cryptocurrency industry over the years now. Over $9.8 billion in digital assets has been lost to hackers since three years ago and according to KPMG, the losses are due to the lax security or poorly written code for crypto entities.
As with all financial transactions, the digital currency industry needs to contend with stepped-up rules on storing crypto securely for customers.
Additionally, financial institutions already observing mature compliance programs should equally improve their strategies to address the unique considerations for crypto-assets, including related data-management issues, per the report.
How Crypto Companies Are Protecting Investors
It’s worth noting that the crypto industry hasn’t relented in introducing services to help store cryptos safely. There has been a launch of several crypto custody services from the likes of Fidelity Investments and exchanges such as Gemini Trust Co., Intercontinental Exchange Inc., and Coinbase Inc.
Recently, Blocknox, a subsidiary of the second-largest stock exchange in Germany, Boerse Stuttgart Group, launched full custody for digital currencies for institutional clients, and other digital assets.
On January 16, Gemini Trust Company introduced a captive insurer dubbed “Nakamoto Ltd,” an insurance firm aimed at increasing the safety of the digital currencies in its custody.
On the other hand, BitGo partnered with an insurance firm, Lloyd’s of London to provide comprehensive insurance that covers up to $100 million to cryptocurrency owners.