Bitcoin-only Exchange Swan Pledges To Launch New Custodian With Bitgobitcoinmagazine.com/business/bitcoin-exchange-swan-custodian-bitgo?utm_source=carrot&utm_medium=partner&utm_campaign=carrot_share
1160 sats \ 6 comments \ @BitcoinIsTheFuture 14 Sep 2023 bitcoin
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60 sats \ 5 replies \ @k00b 14 Sep 2023
If they choose to acquire, he said they aim to be live with customers by Q1 2024. If, instead, they build a new trust, the goal is to go live by Q3.
Haven't they already cycled through all the existing trusts? I'd guess they're going to build their own which would make Q3 2024 pretty ambitious.
BitGo has held all of Swan users’ custodied coins in cold storage since June, which will continue. He claims Fortress does not custody Swan clients’ coins except for small amounts temporarily when satisfying withdrawal requests.
There must be some important legal distinction between a trust and a custodian.
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772 sats \ 4 replies \ @elvismercury 15 Sep 2023
I was wondering about this -- someplace (can't find where) I thought Cory said there was some reason why it complicated things substantially if Swan does custody on its own holdings, which is why they've so incessantly looked elsewhere for that service. I'd like more details about this, but don't know where to find them.
Oh, wait, here's the Swan announcement on Twitter. I guess this is the answer:
Custody rules for traditional assets do not allow exchanges to also serve as custodians for good reason, as we've seen throughout Bitcoin history, from Mt. Gox to FTX.
Since River does this now, I guess the issue is that they want to be super duper conservative and operate as if btc is a traditional asset subject to those rules?
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81 sats \ 3 replies \ @k00b 15 Sep 2023
Since River does this now
As does Strike and that's just among Bitcoin-onlys.
I guess the issue is that they want to be super duper conservative and operate as if btc is a traditional asset subject to those rules?
It's an explanation. Having customer funds migrate regularly doesn't seem very conservative, but its not like they chose that. It is conservative from a regulatory perspective though.
From the article it sounds like trust just handles funds in transit. Sounds like a tough biz.
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0 sats \ 2 replies \ @elvismercury 15 Sep 2023
It's an explanation.
Haha, I sense you're not on board with it. Do you have something else in mind?
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0 sats \ 1 reply \ @k00b 15 Sep 2023
Nothing devious. It does sound a bit spun though. For a company that so vividly documents the failure of others, a lonely appeal to precedents feels lacking.
When you have ten seconds to maintain a customer's trust, it makes sense. A lot of their business is on the line.
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709 sats \ 0 replies \ @southside263 15 Sep 2023
'pending regulatory approval' - must be a tough gig fr
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