According to a new report from KPMG, the €245 billion cryptocurrency industry needs to do more to secure its digital assets to continue growing. Since 2017, hackers have stolen at least €9.8 billion in digital assets due to weak security or poorly written code, the accounting firm said in its "Cracking Crypto Custody" report. As institutional investors adopted cryptocurrencies such as Bitcoin and Ethereum, this led to competition for a place in their wallets and the protection of these digital tokens is more important than ever. Co-author of the report and co-leader of KPMG's crypto asset services, Sal Ternullo explained why security is preventing investors from acquiring more cryptocurrencies in a statement, saying: "Institutional investors in particular will not take positions in crypto assets if their value "it cannot be held and protected in the same way as traditional assets."
Securing investments in cryptocurrencies
Custodial services for cryptocurrencies have begun to develop and Fidelity Investments, as well as units of cryptocurrency exchanges Intercontinental Exchange, Coinbase and Gemini, have begun offering them to investors. In the same way that cash and certain types of bonds are bearer investments of the person who owns them, so are cryptocurrencies. However, private keys, which are a string stored in a digital wallet or written on paper, are quite easy to fool. When a user loses or steals their private key, the asset is gone forever, so maintaining the keys is a big challenge for traditional financial companies that are more familiar with protecting non-digital assets. KPMG explained why curation is so important to the continued growth of the cryptocurrency market in its report, saying: "Custody, the management of the cryptographic private keys that crypto asset owners use to execute transactions, is an essential part of the constitutionalization of crypto. It is essential to gain customer trust in crypto assets and allow the market to evolve. As crypto assets proliferate, depositors have a tremendous opportunity to profit, both by earning fees from administration to provide simple depository services as well as by offering adjacent services only possible in the nascent crypto ecosystem." If cryptocurrencies are to continue to be bought and traded by institutional investors, then the industry must ensure that they can secure them first. Via Bloomberg