Swan, a Bitcoin-focused exchange, has revealed plans to join forces with BitGo to establish a Bitcoin-only trust company, subject to regulatory approval. This partnership aims to cater to the increasing demand for Bitcoin-specific solutions while addressing custody and security requirements within the Bitcoin ecosystem.
Swan Bitcoin recently transitioned from Prime Trust to Fortress Trust and BitGo. However, Ripple’s acquisition of Fortress Trust raised concerns due to Swan Bitcoin CEO Cory Klippsten’s previous allegations of criminal conduct against Ripple executives. Although Fortress Trust experienced a security incident that resulted in substantial losses from its hot wallets, Swan Bitcoin clarified that its clients’ coins were secured in insured cold wallets at BitGo and remained unaffected by the incident.
In light of the acquisition, Swan Bitcoin has decided to collaborate with BitGo to create a dedicated Bitcoin-only trust company. This initiative is driven by the desire to offer a custody solution exclusively for Bitcoin, separating it from other cryptocurrencies to enhance security and innovation.
Swan Bitcoin CEO Cory Klippsten emphasized the importance of building a custodian focused solely on Bitcoin’s unique features, distinct from multi-asset trust companies. Klippsten stated that they would either acquire an existing custodian and aim to go live by Q1 2024 or build a new trust company with a goal of going live by Q3 2024.
The collaboration builds upon Swan and BitGo’s existing partnership, with BitGo already safeguarding Swan users’ coins in cold storage since June. BitGo CEO Mike Belshe expressed support for the Bitcoin-only custodian model, emphasizing the separation of exchange and custody as a well-established and secure approach in the financial industry.
Swan Bitcoin’s Bitcoin-specific trust company aims to address user concerns and reduce exposure to the broader cryptocurrency ecosystem. The company expects to serve asset managers, company treasuries, governments, and other entities seeking dedicated Bitcoin custody solutions.
Swan Bitcoin co-founder and CTO Yan Pritzker highlighted the significance of the Bitcoin-specific trust company, which will offer advanced wallet management capabilities, inheritance planning, and support for emerging Bitcoin standards while providing the best custody for Bitcoin. This initiative reflects Swan’s commitment to enhancing the Bitcoin ecosystem and bolstering its security infrastructure.
