Komainu is a collaboration between Nomura, CoinShares, and Ledger.

Japan’s biggest brokerage and investment bank, Nomura, blockchain security firm Ledger, and digital asset investment house CoinShares have come together to launch Komainu, a custodial service for digital assets aimed at institutions. (Finance Magnates)

Komainu, initially announced in 2018, has been running with a handful of clients since the beginning of the year. Now open for use to the wider market, the Jersey Financial Services Commission regulates it as a custodian and depositary.

Komainu: Hybrid bridge

Komainu provides custody for a range of digital assets on an institutionally compliant platform powered by a Ledger bespoke environment. However, it is also the first hybrid institutional-grade custody platform that can integrate with legacy financial technology.

Jezri Mohideen, Global Chief Digital Officer, Wholesale at Nomura, said: “Through the joint venture between Nomura, Ledger and CoinShares we have successfully bridged the gap between legacy finance and emerging technology, establishing Komainu as a regulated and secure digital asset custody solution tailored to the needs of institutional clients.”

Rising institutional interest in digital assets

Fidelity Digital Assets (itself a custodian service for cryptoassets) issued a report earlier this month based on a survey of nearly 800 institutions in the U.S. and Europe conducted from November 2019 through early March 2020.

A growing number of institutional investors believe that digital assets should be a part of their investment portfolios, the report found.

The report also said that 80% of institutional investors found something appealing about the asset class and that 60% believed they should invest in digital assets.

However, institutions have been hampered by the limited availability of compliant custody services. Especially in the context of frequent instances of hackings, fraud, and theft of crypto assets.

“With cryptocurrencies more prone to vulnerabilities, institutions’ digital assets are weaponized against them without the proper security infrastructure in place,” said Pascal Gauthier, CEO of Ledger, referring to Komainu. “Through our combined experience, we have developed a sophisticated financial and security solution that will be the key institutional partner.”

Komainu team

Coinshares co-founder CEO Jean-Marie Mognetti will lead Komainu. Kenton Farmer, previously of Credit Suisse will serve as Head of Operations. Andrew Morfill, who served at the Vodafone Group, will take on the role of the chief information security officer.

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