Not the city, the $ 57 million cryptocurrency custody account. If someone wants to keep dozens or hundreds of millions of dollars safe in Bitcoin, Ethereum or other coins, he puts them in Anchorage & # 39; s Vault. And now they can act straight out of custody, so they no longer have to worry about being mugged during the transaction.
With the support of Visa, Andreessen Horowitz, and Blockchain Capital, Anchorage has emerged as the darling of the cryptocurrency security startup scene. With the acquisition of the crypto risk modeling company Merkle Data, she is stretching her muscles today and fighting death.
Anchorage has already integrated Merkle's technology and team to drive today's launch of its new trading role. Large crypto owners no longer need to manually custody assets to buy or sell, or to set up their own in-house trading. Instead of achieving an undisclosed spread between the spot rate and the price Anchorage customers pay, a transparent fee of one tenth percent is charged per transaction.
Trading digital treasures is stressful enough. Anchorage gives institutions and token moguls the assurance throughout the process that they can participate and vote while their wealth is in custody. Nathan McCauley, CEO of Anchorage tells me "Our customers want to be able to top up a USD bank account and have it seamlessly converted to crypto that is kept securely in their custody accounts. Amazingly, that's not the norm yet – but we're changing that. "
Anchorage's core business, founded in 2017 by leading companies behind Docker and Square, is the omnimetric security system that captures passwords that can be lost or stolen from the equation. Instead, people and AI are used to check scans of your biometrics, nearby networks, and other data to confirm identity. Subsequently, consensus approval is required for transactions from trusted managers that you have whitelisted.
With anchorage trading, the startup promises efficient order routing, transparent pricing and multi-venue liquidity OTC desks, exchanges and market makers. "Because trading and custody are directly integrated, we can buy and sell crypto from the custody without having to undertake risky external transfers or manage multiple accounts from different providers, ”said Bart Stephens, founder and managing partner of Blockchain Capital.
Since trading is not Anchorage's main business, it doesn't have to force customers to do their transactions and can instead try to keep them happy in the long run. This also sets anchorage up as a fundamental part of the cryptocurrency stack. The terms of the Merkle Data acquisition will not be announced, but the company supported by Pantera Capital is bringing quantitative analysts to Anchorage to make its trading safe and intelligent.
“Unlike most traditional financial assets, crypto assets are bearer assets: in order to do anything with them, the underlying private key must be available. This means that crypto custodians like Anchorage must play a much bigger role than custodians in traditional finance, ”says McCauley. "Services such as trading, settlement, collateral, lending and all other financial activities related to the assets depend on the involvement of the custodian and, in our view, are best performed directly by the custodian."
Anchorage will compete with Coinbase, which offers integrated custody and institutional brokerage through its OTC-only counter. Fidelity Digital Assets combines trading and brokerage, but only for Bitcoin. BitGo offers brokerage from custody through a partnership with Genesis Global Trading. But Anchorage hopes for its experience in dealing with huge sums, clear prices, and credentials like membership in Facebook's Libra Association it will win customers.
According to McCauley, the biggest threat to Anchorage is not the competition, but a blurry regulation. Anchorage is at the heart of the infrastructure of the blockchain economy. However, in order for the largest financial institutions to be able to get involved without any problems, legislators must clarify what is legal.