Despite The Cryptocurrency Trading Ban in China, Local Crypto Startup InVault Launches Custody Service

Despite the continuous crackdown for all cryptocurrency-related activities inside China, local crypto startup InVault launches its own cryptocurrency custody service last week. The Shanghai-based startup says that it will work with different cryptocurrency exchanges to help them securely store their customer’s digital asset holdings.

This year, a number of cryptocurrency exchanges were a victim to online hacking thereby losing millions of dollars of investment funds. As a result, number of cryptocurrency companies have been offering custody solutions that offer higher security over traditional exchanges and keep investors’ funds safe and secure.

InVault provides a completely decentralized cryptocurrency wallet service for big corporates and exchanges. As the service is completely decentralized, there is no controlling authority for the safeguarded funds. Unlike many other custody service which hold digital assets, InVault acts as the custodian of users’ private keys. The crypto-startup will hold users’ private keys securely in different physical vaults with only authorized personnel having access to them.

While speaking to the local publication South China Morning Post, InVault CEO and founder Kenneth Xu said that the only way to secure digital assets is by adopting the path of decentralization.

Xu said: “Today, the vast majority of cryptocurrency exchanges globally still involve their senior management in managing the transfer of digital tokens ordered by clients. Putting the private keys to your cryptocurrency assets in the hands of senior management is akin to putting all your money in their control.”

Xu is pretty optimistic that crypto exchange will soon adopt custody services as their major focus rests on providing customers a seamless trading platform, while staying away from the burden of holding their digital assets.

Xu said: “In conventional stock trading, securities are all held at a central depository and not by exchanges. The same should apply in the digital token arena too.”

InVault has already started providing its custody services to clients as CEO XU said that the crypto startup has already received order for storing one million ETH tokens.

This news comes just at a time when the Chinese authorities issued a crackdown on over 124 off-shore exchange websites providing services to Chinese investors. The authorities also banned several crypto-related media outlets calling them as a source of creating speculation and luring investors.