TransitNet is providing the tools that will assist service providers with title verification for cryptographic assets. Despite the huge influx of institutional investment into crypto over the last year, many larger firms are apprehensive about entering the market because of the anonymity associated with crypto. TransitNet wants to allow crypto holders the option of registering their cryptographic assets and making it a more attractive space for institutions to invest in.
Today Korea IT Times sat down with TransitNet CEO and former head of US marketing for PayPal, Eric M. Jackson to talk about institutional investment and the importance of title registry.
Q: Firstly, why do you think the last year or so has finally seen institutions arriving into the crypto sphere?
The concept of crypto at its core has always represented a great way to store wealth. Now with the huge increase in crypto’s market cap, especially for Bitcoin, crypto has become a more important asset class for many investors. I think there’s no longer a sense that crypto is going to fall and not come back. As a result, some financial institutions are beginning to offer services in response to market demand.
Q: Despite this interest, why do you think so many institutions are reluctant to invest?
Crypto is still a bearer asset. While that’s useful as a cash substitute, it's a barrier to widespread adoption. Institutions are used to investing in something where ownership is so much more transparent. Lack of title is a problem for investors, companies, auditors, and other service providers and regulators have identified this as a major concern.
Q: Regulations appear to be having more and more of an impact on crypto across the world. Do you think this is a problem for crypto?
The world is certainly moving toward more regulation of crypto. Case in point, earlier this week the Chairman of the SEC indicated that crypto in general and DeFi, in particular, should expect to see increased regulations going forward.
Regulation is not in and of itself a bad thing. The question is what kind of regulations get put in place. Lack of clarity about what future regulation might look like is almost certainly worse for the industry than the implementation of a modest, common-sense set of regulations.
Q: Tell us about how TransitNet can make it easier for institutions to get involved in crypto. Why is title verification so important?
Title verification stands to benefit many institutional players.
Firstly, many custodians have a legal obligation to prove the title of assets taken into their possession. This will be vital as regulators aim to stamp down on any crypto assets that may have been illicitly obtained.
Secondly, neither insurers nor auditors can rely solely on clients’ possession of private keys as equivalent to the title. Insurers, for example, will require proof of title in order to underwrite policies related to assets.
Thirdly, Fund Administrators will, of course, need to verify the title of the assets they are given to manage and finally, for exchanges, KYC proves a client’s identity but can’t verify the title of assets acquired elsewhere. Title registry will provide a more comprehensive record of a crypto asset’s ownership.
Q: TransitNet gives investors the ability to turn crypto from a bearer asset to a registered asset. What are some of the benefits for retail investors holding crypto as a registered asset?
So many different financial applications become available when you can register an asset in your name. When you have Proof of Reserve, you can demonstrate that you have control over your own assets. This allows you to use them as collateral and gives you the option of having them insured.
On top of that, when it comes to paying taxes and regulations, both of which are vital for major institutions, a title registry allows for auditability and therefore, proof of compliance.
Q: TransitNet's first tool released is the Asset Collision Identifier. Tell us a little bit about that.
The Asset Collision Identifier (ACI) is a product for service providers, including audit firms and fund administrators. It enables service providers to identify if wallet addresses are claimed by multiple fund managers, helping ensure that ownership of specific assets are claimed by only one fund.
Q: TransitNet has just completed a seed round totaling over $2 million. What notable investors does TransitNet have, both from the seed round and previously?
Our earliest investors, the ones that came on board before the seed round, include some pretty big players in the crypto investment circle such as Alphabit, BKCM, and Kenetic Capital. Our recently completed seed round was then lead by Silicon Valley angel investor Stephen Roulac, and included a number of professional crypto and tech investors.
Q: Finally, can you please tell us a little about what TransitNet has in store for the future?
We’re putting all our energy into launching our crypto title registry to the public later this year and can’t wait to see how the crypto sphere reacts to it.
