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The Need for Crypto Custody is Rising and Here’s Why

Everyone talks about how to earn more crypto and the powerful tools and strategies, but what’s even more important is how to protect it. Crypto custody is something you don’t want to wait too long to obtain.

 

It’s 2022. We’re all in possession of digital properties – one form or another. Some may have sentimental value while others most likely fall under the category of cryptocurrency. If you’re an owner of the latter, then getting crypto custody should be on the top of your to-do list.

 

It is a dedicated service of safekeeping your digital assets, much more than your wallet (hot, cold, lukewarm, etc) ever could. A qualified crypto custodian puts your mind at ease and your coins in a place no one else can reach.

 

But don’t jump into it head first. Let’s talk more about crypto custody and why groups and businesses, big or small, need it now more than ever.

Crypto custody is the key to over-reliance on cold wallets

 

Crypto custody has the key to your wallet, but in a good way. Part of the reason cold wallets are so popular stems from the fact that we just love anything portable. Some of us are enthralled by it. If you’ve heard of brands like Trezor or Ledger, most of the hype revolves around how easy they are to carry.

 

But the problem with using a cold wallet or a crypto exchange is that, unlike crypto custody, it exposes users to a single point of failure. In other words, if someone wants to steal the coins in your wallet, they only have to get past one threshold. 

 

Having a crypto custodian with decentralized security eliminates all those risks. You wouldn’t need to worry about your private key or remember your super long passphrase. 

 

Your crypto custody providers ensure your digital assets will always be there when you need them. A qualified crypto custodian is an expert on security and will make sure every of your transactions go through a layer of approvers. This is also known as MPC protocol. Every approver will have to verify and accept each request before a transaction can be cleared. You can also assign more approvers if the transaction exceeds a certain threshold. For example, if the transaction is more than $1,000, it’d require two approvers. More than $5,000 would require three, and so on.

 

Crypto custody will also enable you to recover your wallet, which is the greatest advantage you have over using a regular crypto wallet. We’ve all forgotten our passwords at some point and most of the time we brushed it off. If you do that on a crypto wallet, it could be all over. Having a crypto custodian ensures you always have access to your coins.

Crypto custody reduces the risk of putting your digital assets in a crypto exchange

 

The only thing worse than leaving your crypto lying around is giving it to somebody to do as they will with a promise it would still be there when you need it.

 

That’s basically what you do when you put your crypto in an exchange. Unlike using crypto custody where you retain control over your assets, an exchange essentially holds your coins and grants you access to it. All your hard-earned crypto suddenly becomes a luxury to your own possession.

 

To be fair, at some point in the past, leaving cryptocurrency in an exchange had been safe and all there was. Almost instinctive. Unfortunately, as technology advanced, so did hackers. Recent years have proved even the biggest platforms aren’t immune to attacks. 

 

Technically, you can still put crypto in an exchange, but will it be there when you need to withdraw? Who knows. And as of now, not even Sam Bankman-Fried could tell you. When FTX, the second largest crypto exchange in the world collapsed, billions of dollars in customer funds vanished. Those who had entrusted their life savings in FTX are now left wondering if they could ever see even a fraction of it return.

 

When you have crypto custody, you’d never have to worry about your coins being moved elsewhere or exploited in any way.

How to choose a crypto custodian and what happens if you don’t choose the right one?

 

When it comes to crypto custody, security is the main source of priority. To decide whether someone is a qualified crypto custodian, many factors need to be cleared.

 

  1. Credentials. Crypto custody evolves from trust. A crypto custodian needs to be fully audited and licensed by a recognized entity. This is often the threshold before a long term contract.

  2. Technical capacity. Not everyone is savvy enough to use hardware wallets or able to pop off the 24-digit private key on demand. A better option for these users is crypto custody. A qualified crypto custodian must provide innovative features to make life easier for its clients.

  3. Emphasis on security. A crypto custodian must be well equipped for you to entrust your digital assets. Wallet recovery system, wallet policy, MPC, etc.

     

Get to know Atato’s Bring Your Own Chain/Token (BYOC/BYOT) feature that expedites your progress with one click

 

As well-rounded as crypto custody is, it doesn’t come without limitations. Most crypto custodians are burdened with the range of assets they can support. 

 

If you choose a crypto custodian who doesn’t support a particular token or blockchain you need, it may take weeks, or even months for them to integrate it. For services without the technology, the complexity of this process could place a strain on your workflow

 

Bring Your Own Chain (BYOC) lets you add any EVM-compatible network to Atato custody. It’s one of the fastest and least complicated procedures a crypto custodian can offer.

 

Have you ever been told by a custodian that they don’t support a certain chain or token? It’s definitely annoying, but don’t get used to it as BYOC intends to change that for good.

 

With BYOC, you can do all that in a few seconds. To make it even more convenient, you can also use the same wallet address across all EVM networks..


Sign up to Atato custody and enjoy our unique pricing model, which includes a fixed monthly price, no AUM fees, no transaction fees and no withdrawal fees.

About Us

Atato was born in 2017 with the mission of securing the crypto world. Our vision encompasses bringing the next generation infrastructure to the future 100 million cryptocurrency users.  Atato is headquartered in Singapore and a holder of the TCSP License.