BlockQuake, a New York digital asset exchange launched in beta, has partnered with Nevada-based trust company Prime Trust, the firm announced Wednesday.
Prime Trust began offering custody services for the crypto industry in late 2018, serving crypto firms like Binance, OKCoin and Bittrex, to name a few.
Prime Trust will perform know-your-customer (KYC) and anti-money laundering (AML) checks for the exchange, as well as provide FDIC-insured bank accounts for the exchange’s customers. The custodian will also provide custody for customer fiat and cold storage for crypto.
Crypto-friendly banking services are extremely rare, in part because of the extra work that banks must complete to comply with KYC and AML regulations. Prime Trust farms its deposits out to other banks to provide FDIC coverage for customers of crypto firms.
BlockQuake has begun a testing phase in which the exchange is open to a limited number of customers. The firm aims to launch fully sometime during Q2 2020, but in the meantime is testing its ability to conduct the legally-required KYC checks, hold deposits, execute trades and operate other features of its wallet.
The firm also applied for a New York State BitLicense with the New York Department of Financial Services in January 2020, and is registered with the U.S. Financial Crimes Enforcement Network as a money services business.
“As cryptocurrency trading grows in popularity, the need to regulate the industry and mitigate risk for investors is paramount,” Antonio Brasse, CEO of BlockQuake, said in a press release. “We are seeing new cryptocurrency regulations come into play almost daily. There is also increasing demand to address security issues.”