After major losses due to hacker attacks suffered Cryptocurrency exchange Coincheck, there was a need to develop new ways of protection of investors. Japanese trust banks have suggested — to take control of the exchange of cryptocurrency for themselves.
Such services, according to representatives of these financial institutions will ensure the safety of customer funds even in the event of bankruptcy of Cryptocurrency Exchanges.
Traditional activities of the Japanese trust banks is lending and accepting savings, and the implementation of trust operations, usually in property or pension funds.
Covering the cryptocurrency industry, they can significantly expand the range of services offered. The proposed plan, users of the cryptocurrency exchanges will, as before, spend on their trading operations, but to manage their funds banks. Thus, the exchanges will be assigned the role of mediator between cryptocurrency investors and public financial institutions.
First one is expected in April, will offer a similar service, will be Mitsubishi UFJ Trust and Banking. Sumitomo Mitsui Trust Bank also plans to provide similar services.
The new law on payment services, which was adopted by the authorities in April 2017, commits to share resources and users of the exchange and the exchange itself.
However, many Japanese cryptocurrency exchanges are small start-UPS with limited investment opportunities, and often use the assets as their own.
Guarantee of refund to investors in case of fraud, hacking or bankruptcy, as a rule, are not provided. This problem and aimed to solve at Mitsubishi UFJ Trust and Banking. The legislation requires that the assets of the managed trust banks, and in the case of cryptocurrency exchanges, it is assumed that assets will be stored on a cold wallet without a network connection. Additionally, the Bank will generate numerous keys to online wallet this will reduce the risk of unauthorized access to the accounts and the implementation of large-value payments.
Such cooperation will definitely provide a higher level of security when working with cryptocurrency exchanges. But it is impossible to deny the possibility that the presence of another participant in the chain of payments reflected in the speed of transactions. However, as shown by the incident with Coincheck, security of client funds increasingly come to the fore.
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