The crypto custody business, which involves safeguarding cryptocurrencies from hackers and fraudsters, is considered high-stakes and expensive due to the risks involved. According to Hadley Stern, chief commercial officer for Solana custody tool Marinade, it costs up to 10 times more to custody crypto compared to traditional assets. However, the crypto custody market is growing rapidly, with estimates suggesting a 30% annual growth rate. Traditional Wall Street banks and startups are looking to enter this market as they see potential for substantial growth. Currently, Coinbase and BitGo dominate the crypto custody space, but traditional firms like BNY Mellon, State Street Corp., and Citigroup have started offering crypto custody services or have announced plans to do so. Regulatory uncertainty has been a barrier for traditional firms, but some banks have received exemptions from restrictions imposed by the SEC's SAB 121 rule. The crypto community is waiting to see how the U.S. presidential election outcome, particularly if former president Donald Trump were to win, could impact the regulatory environment for crypto custody. Overseas players are also keeping an eye on the U.S. market and may make moves depending on the election outcome. Overall, the crypto custody business is expected to continue growing and evolving as more players enter and regulations potentially change.



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