G4S creates cryptocurrency vaults
Written by Hannah McGrath
Security giant G4S is entering the cryptocurrency market with a new service offering high security offline storage that aims to keep digital assets out of the clutches of hackers.
The firm, best known for its cash storage and prison services, is launching a secure storage vault to help financial services firms and crypto traders guard their holdings in Bitcoin, Ethereum, Litecoin and other cryptocurrencies from the “wild west” of currency exchanges.
The launch comes at a time of increased vulnerability in exchanges, which in the absence of a central bank, often become the main repository for digital assets. The largest exchanges are estimated to process up to $1.7 billion in trading volumes per day.
This creates increased vulnerability at a time when the value of digital currencies is rising rapidly, with the cost of a Bitcoin soaring from $800 to $6,000 dollars in the space of a few years.
G4S highlighted rise in cryptocurrency holdings worth over $1.2billion since the start of 2017, including a $500 million theft in January this year from Coincheck, one of the largest exchanges in Japan.
As a result, customers of G4S Cash Solutions services have been looking for solutions to protect their crypto assets.
Currently, crypto assets are most frequently kept in online wallets, but remain vulnerable to theft from hackers as they are stored on users' computers.
Dominic MacIver, senior risk analyst at G4S Risk Consulting, explained: “The original goal of cryptocurrencies was to redesign the fundamental architecture of money.
“Although some early adopters have made enormous returns, the sector has attracted the same old threats for financial systems, including robbers, scammers, market manipulators and many others.”
He said that offline storage has become more established and secure way of storing crypto-assets.
“In collaboration with clients, our security solution is built on a foundation of 'vault storage'. We not only take the assets offline, but break them up into fragments that are independently without value and store them securely in our high security vaults.”
MacIver added: “Access to these sites is heavily restricted with multiple layers of security and robust protocols, and only when all the fragments are combined with specific technology can they unlock access to the value stored within.”