You’ve seen the likes of these in movies like Mission Impossible. A protagonist is carrying a futuristic breifcase, only to reveal a ruggedised computer that starts transferring a billion dollars after a biometric test is passed.
But this one is real, and it is helping to bring digital assets, like cryptocurrencies, to a traditional custodian. GK8‘s Cold Vault is now being used by Prosegur – a multinational security company, headquartered in Madrid, Spain – that has 160,000 employees and a presence in 26 countries.
And that’s significant because the service, Prosegur Crypto, is the first time that a cash management company has entered the digital asset space, offering custody of cryptocurrency. And, importantly, it does it without accessing the internet, which closes the security gaps found in other crypto storage solutions.
“GK8’s Cold Vault was designed as an enterprise-grade solution for financial institutions – mainly banks, crypto exchanges, and custodians that manage a large volume of digital assets,” Lior Lamesh, CEO and cofounder of GK8, told me. “What makes GK8’s Cold Vault solution so unique is that it’s the only real cold wallet solution available today: all other cold wallets in the market may store private keys offline but require some form of internet connection in order to execute a transaction to the blockchain. The moment these devices are connected to the internet, an attack surface is created and can be exploited by a skilled hacker. GK8’s Cold Vault is 100% offline, being the only air-gapped solution that can create, sign, and send blockchain transactions without being connected to the internet.”
That begs the question, how do transactions between parties work in practice without an internet connection?
“GK8’s solution is based on patented cryptography (seven USPTO pending patents) that enable the vault to create, sign, and send blockchain transactions in a unidirectional connection,” Lamesh said. “The signed transaction is sent in a patented outbound-only communication, without receiving any digital input that can include malicious code.”
GK8’s Cold Vault is backed by a $500m insurance coverage, offered to GK8 customers using its custody platform. According to the company this is the highest insurance available today on digital assets.
So what are the plans for the company’s future, and the future of this solution?
“It’s important to see the launch of Prosegur Crypto in the wider context of the institutionalization of crypto,” Lamesh said. “Over the last year we’ve seen a dramatic shift in the way digital assets are perceived by financial institutions around the world, from a niche investment channel to a mainstream financial asset, held by millions of individuals globally, and acknowledged by regulatory entities all over the world – led by the U.S. OCC and Germany’s BaFin.”
And this is in line with the continued adoption of digital assets into the mainstream.
“We can really sense this change in our talks with banks,” Lamesh said. “After sitting on the fence for months, they finally seem to realize that they must adapt themselves to the crypto economy to meet the evolving market demands.”
It’s just the beginning for solutions like this, but the market seems to be moving quickly towards the adoption of digital assets in traditional finance.
“Crypto custody is just the tip of the iceberg of how our solution can serve financial institutions in the digital economy,” Lamesh said. “As a platform for secure management of digital assets, our platform serves as the building block for other revenue-generating channels over the blockchain, such as Staking, DeFi, and Tokenization of traditional assets. These services enable financial institutions to generate new revenue, reduce feed and costs, and inject new liquidity to the market by expanding services to include a wide consumer base.”