In a recent announcement dated October 31st, Harbor has partnered with BitGo to offer industrial-grade security of cryptocurrency funds raised through the Harbor platform. The partnership also benefits investors, as Harbor’s services will now entail BitGo Business Wallets.
How BitGo’s Expertise will Strengthen Harbor
BitGo is known as a world leader when it comes to institutional-grade cryptocurrency security. In 2013 they introduced the world’s first multi signature wallet. They currently offer cold storage technology in bank-grade Class III vaults and support for more than 75 coins and tokens.
In Setpember 2018, BitGo announced their approval by the South Dakota Division of Banking as a public South Dakota Trust Company. The designation allows for them to operate as a qualified custodian— a label required by many investors in a custody bank. Notably, both Coinbase and Gemini share the same status.
Now, in November 2018, they process more on-chain Bitcoin transactions than any other entity. In fact, BitGo processes 15% of all Bitcoin transactions, and handles $15 billion per month throughout the entire cryptocurrency industry.
It is precisely this level of expertise that they will now bring to Harbor, according to BitGo CEO Mike Belshe:
“The Harbor platform will help change the way traditional assets like commercial real estate are securitized. BitGo and Harbor share a commitment to transforming capital markets by creating ways for more people and institutions to participate. We have worked closely to create a seamless experience for issuers and investors, from the provisioning of digital wallets to the custody of funds.”
The Details of the BitGo-Harbor Partnership Explained
Harbor is a platform which allows for the creation and issuance of tokenized private securities. Ultimately, it brings a new method of raising private capital to the financial industry.
The platform entails the Harbor security token stack, which streamlines investor onboarding through KYC, AML, and accredited status verification, smart contract creation, token issuance, and most importantly— algorithmically enforced compliance.
The team behind Harbor claims that tokenization can bring increased levels of liquidity to the private securities sector- much of which falls under an illiquid asset class given the current system.
Through the new agreement, Harbor will provision BitGo Business Wallets for investors as well as enterprise-grade BitGo custody for issuers. BitGo will manage the custody of funds raised during the fundraising process.
As emphasized by Sujay Jaladi— Chief Information Security Officer at Harbor— the new partnership is hopeful in bringing larger players into the security token industry:
“BitGo is a great partner for Harbor because we share a commitment to security and compliance that will help bring institutional investors to the crypto asset market.”
Josh Stein, Harbor’s CEO, also described how BitGo can help Harbor overcome the remaining challenges embedded in the promising security token future:
“Tokenized private securities are the next big wave in capital markets, but roadblocks of complexity, security and compliance must be addressed for mainstream investors. Our partnership with BitGo is key to providing a great user experience on top of an industrial-grade platform that investors, issuers and regulators can trust. With BitGo’s expertise, we will help democratize access to premium private investments in a more liquid, digitized form that allows for value creation in ways that were impossible before. The transition from papered private securities to digitized forms using the blockchain will have a similar impact as the transition from snail mail to email had on written communication.”
What do you think of Harbor partnering with BitGo? Will this add institutional interest to the tokenization of securities? Let us know what you think in the comments below.
Image courtesy of Medium.