BlockTower Capital Utilizes Closed Banks for Custodianship of Crypto Assets

03/14/2023 22:28 • AI & Tech Insights • 64 views

It is reported that according to the latest regulatory documents required by the investment consultant, four private funds of BlockTower Capital, a crypto asset management company, use the closed Signature Bank and Silvergate Bank as the asset custodian. The total asset value of these funds is about $940 million.

BlockTower Capital used Silvergate and Signature Bank as asset custodians

Analysis based on this information:

BlockTower Capital, a well-known crypto asset management company, has recently disclosed that four of its private funds are using Signature Bank and Silvergate Bank as their asset custodians. The latest regulatory documents reveal that the total value of these funds is approximately $940 million.

The use of closed banks is a significant development in the cryptocurrency industry. It is understandable given the current market climate, where the regulation and oversight of digital assets remain a challenge. Crypto asset management companies like BlockTower Capital are trying to avoid legal and regulatory risks associated with traditional banks that allow investors to deposit funds in cryptocurrencies. Closed banks, which only cater to a limited number of clients, provide a level of privacy and security in asset custody services that is not readily available elsewhere.

The regulatory documents submitted by BlockTower Capital highlight its preference for closed banks as custodians for their raised funds, indicating the company’s trust in these banks’ security protocols. Signature Bank and Silvergate Bank are both regulated, audited, and chartered in the United States, a positive signal for institutional investors who are still wary of investing in this space.

BlockTower Capital’s use of Signature Bank and Silvergate Bank is a significant endorsement of the two banks’ capabilities in safeguarding crypto assets. With a total asset value of around $940 million, the company is exhibiting confidence in the closed banks’ framework, a sentiment that is likely to boost their reputation in the crypto industry.

In summary, BlockTower Capital’s latest regulatory documents reveal its preference for using two closed banks, Signature Bank and Silvergate Bank, as custodians for its private funds, which are valued at $940 million. The use of closed banks in the crypto asset management space highlights the need for privacy and security protocols to protect investors’ assets from legal and regulatory risks, third-party interventions, and unforeseen theft.

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BlockTower Capital Utilizes Closed Banks for Custodianship of Crypto Assets

BlockTower Capital used Silvergate and Signature Bank as asset custodians

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