The recent bankruptcy of Prime Trust has highlighted the perils of relying on third-party custodial solutions for digital asset storage. In a statement released this week, Anchorage Digital CEO Diogo Mónica underlined the key risks posed by such services, emphasizing that “although custodians may control the private keys of the customer, the customer still owns their assets.”
Mónica went on to stress the need for “a secure, secure process for trading and settlement of digital assets.” He noted that self-custody solutions can reduce security and operational risks associated with trusting third-party providers, while helping organizations take full control of their digital assets.
Anchorage Digital is a firmware-based cold storage solution that offers self-custody of digital assets such as cryptocurrencies. Mónica argued that this type of hardware-based solution stands in stark contrast to the risk-prone model offered by third-party custodial services. “Finally,” he added, “investors should not leave their assets exposed to the potential risks associated with third-party custodians, but rather store assets using independent self-custodial solutions, like Anchorage Digital.”