Pulse Custody Problems with Bitcoin And Other Crypto-Assets PRESTON J. BYRNE, ROBERT V. CORNISH AND STEPHEN D. PALLEY ANDERSON KILL While 2020 may be a year on pause, cryptocurrency is continuing at full speed. Preston J. Byrne, Robert V. Cornish and Stephen D. Palley of Anderson Kill offer their insights.
One of the few bright spots in 2020’s unquestionably challenging business environment has been the Bitcoin and cryptocurrency markets. The prices of Bitcoin and Ethereum, the two most dominant cryptocurrencies in terms of market share, currently hover at yearly highs. Square, a Silicon Valley-based merchant processor, reported that its popular "Cash App" mobile app – one application in one country – generated $875 million in Bitcoin sales in the second quarter of 2020 alone. Interest from the retail segment is mirrored by interest from institutional asset managers and banks. At the
beginning of 2019, asset management powerhouse Fidelity was the first globally significant financial institution to announce that it was launching a digital assets division. At the beginning of August, it was joined by Goldman Sachs. Outward-facing public developments in the cryptocurrency arena also hint at significant furtive work by institutional players to lay the groundwork for future business. A blinking green light for cryptocurrency custody Growth of business and market activity will by necessity bring many legal issues to the forefront, as cryptocurrencies appear poised to make their way into the financial mainstream. One of these issues is “custody” – what it means for financial and other regulated institutions to hold an asset that can be transferred permanently and irretrievably with a private key (akin to a password). CORPORATE COUNSEL BUSINESS JOURNAL
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