Shillings prep new ‘sharded’ approach to crypto custodianship

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September 30 2021
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An Australian crypto custodian is looking to set itself up as the answer to the recent rise in crypto crime.

Crypto custodian Shillings is looking to cement itself as the secure option in Australia’s crypto landscape with the launch of a new custody platform for crypto assets.

Shillings co-founder Will Banks said that the move was a response to the rising interest among institutional investors when it comes to cryptocurrencies like bitcoin and an uptick when it comes to security breaches.

“As the digital asset space continues to mature and the popularity of crypto investments grows, more and more customers and institutional investors will require an institutional-grade Australian custody solution,” he said.

Citing a recent spike in cryptocurrency-related crime as a key driver for the market, Mr Banks said that the typical exchange-based configuration for crypto investment leaves the assets of consumers vulnerable to security breaches.

Instead, Shillings’ new offline storage platform will rely on a new “sharded” approach to verify and authorise transactions.

“By utilising ultra-secure, multi-party computation technology to manage the encrypted shards, blockchain transactions can be signed securely without ever having to refer to the whole keys,” Shilling founder Troy Roennfeldt explained.

Despite the additional layer of security, Mr Roennfeldt emphasised that Shillings would still be able to match rival crypto wallets when it comes to speed and useability.

The move comes following recent comments by Independent Reserve CEO Adrian Przelozny on the perils of existing asset custody arrangements in the cryptocurrency sector.

Speaking on the Senate select committee hearing on Australia as a technology and financial centre earlier this month, he said the absence of clear rules in this space has forced customers to rely on exchanges and custodians to “do the right thing”.

“There will come a time where one of the participants makes a mistake, they don’t have the correct controls in place and something bad happens,” Mr Przelozny warned.

Shillings said that they plan to launch their more-secure crypto custodianship solution in Australia sometime in the fourth quarter of 2021, with a global expansion to follow later down the line.

If ongoing trends around crypto adoption and crime persist, it’s not hard to imagine Shillings take on crypto custodianship riding the broader updraught in demand.

A recent report released by Crypto Head found the number of crypto-related breaches and fraud in 2021 is set to break the current records when it comes to volume.

According to the report, 2021 so far has seen $2.9 billion in stolen crypto and an average around $93 million per breach.

The report suggested that the number of offences in the crypto space has increased by 41 per cent every year on average, with the past 10 years amounting to a total bill of $19.2 billion in stolen assets.

“As hackers and their technology become more sophisticated, it’s clear that breaches are an increasingly big concern for the crypto world,” said Crypto Head editor James Page.

About the author

Fergus is a journalist for Momentum Media's nestegg and Smart Property Investment. He likes to write about money, markets, how innovation is changing the financial landscape and how younger consumers can achieve their goals in unpredictable times.

About the author

Fergus is a journalist for Momentum Media's nestegg and Smart Property Investment. He likes to write about money, markets, how innovation is changing the financial landscape and how younger consumers can achieve their goals in unpredictable times.

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