LGO Markets, a new bitcoin exchange for institutional traders, has revealed more details about its unorthodox approach to custody, including a forthcoming optional hardware wallet.
Launched in March, New York-based LGO bills itself as a one-of-a-kind exchange that will allow clients to control their coins instead of putting them in the exchange’s wallet. The idea is that clients open a multi-signature wallet with LGO that has three keys, two of which are needed to send a transaction: the client controls one key, LGO the second one and the clearing service provider Altcoinomy has the third.
Now, LGO is getting ready to release its own hardware wallet that clients can choose for storage of these keys, the exchange’s CEO, Hugo Renaudin, told CoinDesk.
The device, basically a plastic card with an embedded microchip, will become available sometime in the second quarter.
“All keys are created and stored in the smart cards, which means that they cannot be retrieved by an attacker,” Renaudin said, explaining how the hardware wallet would work. “LGO’s and Altcoinomy’s keys are linked to a computer script stored in the same respective smart card, which limits their usage to the signature of digital asset transactions authenticated by the client.”
Alternatively, LGO announced Tuesday that it has partnered with crypto storage specialist BitGo, which will offer the exchange’s clients custody through its South Dakota-regulated trust company as well as multi-sig wallet services.
Further, beginning this month BitGo will support LGO’s native token, also named LGO, which was sold in an initial coin offering (ICO) in February 2018 and will eventually be used for paying trading fees at the exchange.
“Both BitGo and LGO Markets are committed to the needs of institutional investors,” Mike Belshe, CEO of BitGo, said in LGO’s press release. “Our vision is aligned as both companies believe strongly in decentralized cryptocurrency markets where exchanges do not act as their own custodians.”
Social media giant Facebook is said to be seeking to raise as much as a billion dollars in outside funding for its cryptocurrency project.
Nathaniel Popper, a technology reporter at The New York Times, tweeted Monday that sources have said Facebook is targeting “big sums – as much as $1b” from venture capitalists to support the stablecoin effort. The company would use the funds as collateral to back the token, one person apparently told the journalist.
It must be stressed that, at this stage, the comments have not been confirmed by Facebook or any potential investors.
Facebook has been developing its own stablecoin for money transfers over WhatsApp, as revealed last December. The stablecoin may be pegged to a “basket of foreign currencies held in bank accounts,” Popper’s further tweeted.
Facebook has also been planning to list its stablecoin on cryptocurrency exchanges, telling platforms in February that it expects to get the product out in the first half of 2019.
While Facebook is far from short of cash, involving outside investors in the stablecoin project could help Facebook present the cryptocurrency project as “more decentralized and less controlled” by itself, Popper’s sources suggested. The company had $44 billion in cash and equivalents as of April 2018, according to CNBC.
Earlier this year, Barclays analyst Ross Sandler estimated that Facebook’s cryptocurrency project could yield anywhere from $3 billion to $19 billion in additional revenue by 2021.
The social media behemoth set up its blockchain team in May 2018, aiming to explore the emerging technology. Since then, the company has been looking to expand the team with new hires. It recently had over 20 open positions related to blockchain roles, including a lead commercial counsel.
Earlier this year, Facebook also hired staffers from Chain space, the startup behind a smart contracts platform.
Cryptocurrency exchange Coinbase has launched a Visa debit card allowing customers in the U.K. and EU to spend their cryptocurrencies directly from their Coinbase accounts.
The San Francisco-based firm announced the news in a blog post on Wednesday, saying that with the “Coinbase Card,” customers will be able to spend their bitcoin (BTC), ether (ETH), litecoin (LTC) and other cryptocurrencies “as effortlessly as the money in their bank.”
The exchange said it will “instantly” convert cryptocurrency to fiat currency, such as the British pound (GBP), when customers complete a transaction using the debit card.
The card supports all crypto assets available to buy and sell on the Coinbase platform, and customers can use them to pay for everyday purchases, such as a meal or booking tickets, according to the announcement.
With previously available products of this type, customers had to pre-load a specified amount of cryptocurrency onto the card in order to spend, Coinbase said.
The exchange has also launched an app for the card on both Android and iOS platforms, enabling customers to select which cryptocurrency wallet they will use to fund their spending. The app also offers “instant” receipts, transaction summaries and spending categories.
For the first 1,000 customers, Coinbase said it will waive the card issuance fee of £4.95 ($6.48).
PaySafe, a U.K. payment processor, is the issuer of the cards, a Coinbase spokesperson told CoinDesk.
In a similar development last month, banking startup 2gether said it was launching a prepaid Visa debit card that allows users to spend cryptocurrencies. With the 2gether card, customers will be able to pay with either euros or any of the following seven cryptocurrencies: BTC, ETH, XRP, bitcoin cash (BCH), EOS, Stellar (XLM) and litecoin (LTC).