BnkToTheFuture Steps Away From Banks Citing Mounting Risk to Clients’ Assets
Hong Kong (fanjianhua/Shutterstock)
BnkToTheFuture Steps Away From Banks Citing Mounting Risk to Clients’ Assets
Online fintech and blockchain investment platform BnkToTheFuture is moving client assets to a Hong Kong-based trust company citing a “systemic risk” with traditional banking.
- Announced Wednesday, custody provider First Digital Trust (FDT) will be responsible for storing BnkToTheFuture’s client crypto and fiat currency assets.
- BnkToTheFuture CEO Simon Dixon told CoinDesk the most important difference will be that client money is “legally segregated” under a trust structure, but there is no guarantee of segregation at a bank.
- This means a bank can further invest client’s funds at will, while assets held in a trust cannot be used for other purposes without first obtaining permission from the client.
- Shifting assets to a trust would help protect them against a potential “systemic risk event” in the banking sector resulting from expected economic disruption, Dixon said.
- This, he told CoinDesk, would help develop trust among investors and help create an industry standard for crypto custodians.
- The move came as Cayman Islands-based BnkToTheFuture was developing new crypto retirement plan products expected to go live later in 2020.
- Using FDT’s trust structure will help enable clients to store assets in perpetuity for inheritance planning, according to the announcement.
- First Digital CEO Vincent Chok echoed Dixon’s comments, saying that, with a recession approaching, investors need a way to protect their assets from “exposure to fractional reserve banking.”
- FDT is the crypto custody arm of financial services company Legacy Trust.
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