Why the difference between an investment and the custody of the asset is fundamental
At Sygnum Bank, our clients own their crypto - no matter what.
The difference between an investment, and the custody of the assets you have invested in, is fundamental. News over the last week has shone a light on this distinction.
Fabian Dori, our Deputy Group CEO and Head of Asset Management, highlights the concepts and risks behind this fundamental difference:
Company investments are made with the expectation that value will appreciate over time. The main bet is on the team as well as their strategy and execution. Investments into assets like Bitcoin come with a similar expectation of value appreciation, with the bet in this case being on the asset class.
For crypto assets held under custody on the other hand, investors need the peace of mind that their assets are completely safe and always accessible. The trust that is essential here is in the custodian; the robustness of their security, the quality of their governance – and this factor is not to be underestimated – the rules they run by, and the values they live by.
These risks and concepts should be rigorously segregated and clearly communicated. Unfortunately, this is not always the case, as we have seen recently.
One of Sygnum Bank's founding precepts was to be regulated from the very start in the high-quality, politically stable hubs of Switzerland and Singapore. We didn’t want to retrofit, but to send a clear message that we are playing the long game. We believe that the positive regulatory developments, especially in Switzerland and Singapore, give investors the trust and clarity to play that long game too, and ensures that their bet is on the crypto asset class – and nothing else.
Sygnum is a fully regulated bank, and our clients own their crypto, no matter what.
Our client assets are fully segregated, held off-balance sheet and present zero counterparty risk to clients in the very unlikely event of a Sygnum bankruptcy. And this principle naturally extends to the security of our client wallets, which are segregated from each other (unlike Omnibus or collective wallets at some exchanges), as well as between different asset types in the same client wallet.
Our mission, from day one, is to empower everyone, everywhere to own digital assets with complete trust.
In challenging times like these, it’s clear that trust is still the most valuable asset you can hold.
This document is purely for educational purposes and has been issued by Sygnum Group. It is not intended for distribution, publication, or use in any jurisdiction where such distribution, publication, or use would be unlawful, nor is it aimed at any person or entity to whom it would be unlawful to address such a marketing communication. It does not constitute an offer or a recommendation to subscribe, purchase, sell or hold any security or financial instrument. It contains the opinions of Sygnum Group, as at the date of issue. These opinions and the information contained herein do not take into account an individual‘s specific circumstances, objectives, or needs. No representation is made that any investment or strategy is suitable or appropriate to individual circumstances or that any investment or strategy constitutes personalized investment advice to any investor. Therefore, you must verify the above and all other information provided in the document or otherwise review it with your external advisors. Some investment products and services, including custody, may be subject to legal restrictions or may not be available worldwide on an unrestricted basis. The information and analysis contained herein are based on sources considered as reliable. Sygnum Group uses its best efforts to ensure the timeliness, accuracy, and comprehensiveness of the information contained in this document. Nevertheless, all information indicated herein may change without notice.