Cryptocurrency custody solutions have become big business in recent years. Independent storage and security systems intended to hold large amounts of crypto on behalf of clients can attract institutional capital and retail investors waiting on the sidelines, simply because they remove a major fear: losing access to funds that become unrecoverable.
Due to the decentralized nature of major blockchains like or , when a user loses access to their wallet and does not have a backup of their private keys, the funds it contains cannot be recovered. There is no central entity to go to, and no one can control the blockchain to give anyone back access to their funds.
Storing a private key can be challenging as it needs to be kept away from bad actors, but close enough for the user to access it when needed. To deal with the challenges associated with managing cryptocurrencies, many have left their funds on crypto exchanges, creating massive demand for crypto custody services, to the point that the fifth largest bank in The United States is offering a solution.
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