“One of the things that they really want to figure out is the custody of the assets—who exactly holds these assets. If I’m going to be trading on Gemini, who is it that is exactly holding? So that’s the number one concern that most investors have,” explains Eugene Ng, Head of Business Development for APAC at Gemini, identifying the single greatest barrier to institutional cryptocurrency adoption.
With over 15 years of experience spanning traditional finance at Barclays, Deutsche Bank, and Citibank, followed by building institutional crypto relationships across Asia, Ng has witnessed firsthand how custody concerns that barely register with retail investors become existential issues for institutional treasuries managing billions in assets.
Ng’s perspective on crypto custody reflects a deep understanding of how institutional risk management works in practice. His traditional finance background exposed him to sophisticated custody frameworks developed over decades to protect institutional assets. His crypto experience revealed how digital assets require fundamental rethinking of asset protection, control, and operational security. The collision between institutional custody requirements and crypto’s unique characteristics has created the industry’s biggest challenge. It also created the industry’s greatest innovation opportunity.
“Custody has always been the primary consideration when it comes to family offices and financial institutions when it falls right back to us in cryptocurrency,” Ng notes, highlighting how custody concerns often overshadow discussions of returns, volatility, or strategic allocation. For institutions accustomed to mature custody infrastructure, crypto’s custody complexities represent unacceptable operational risks. Those issues must solve before meaningful adoption can occur.
The Fundamental Departure from Traditional Custody
Ng’s institutional experience provides crucial insight into why crypto custody creates such profound concerns for traditional investors. “It is a departure from our traditional securities where we buy a stock and it gets sent into one of our CDPs (central depository) in Singapore. But in crypto, it is slightly different. The exchange is also the carrier, It’s also the broker, It’s also the custody. So that’s a great departure and that requires a shift in thinking on this investment,” he explains.
This structural difference represents more than operational complexity. It challenges fundamental assumptions about how financial assets should be held, controlled, and protected. Traditional securities custody relies on established intermediaries, regulatory oversight, and legal frameworks developed over generations. Central depositories provide standardized custody services with clear regulatory supervision, legal recourse, and insurance protection. Institutional investors take that for granted.
Crypto Custody Introduces New Risks
Crypto custody eliminates these familiar safeguards while introducing new risks that traditional risk management frameworks struggle to address. Private key management, smart contract risks, exchange insolvency, regulatory uncertainty, and technological vulnerabilities create new threat vectors. They don’t exist in traditional asset custody. For institutions managing fiduciary responsibilities to beneficiaries, these risks often appear unmanageable regardless of potential returns.
Ng’s derivatives trading experience across global banks provides a perspective on how institutional custody requirements evolved to address complex financial instruments. The sophisticated custody frameworks that enable derivatives trading required decades of development, regulatory coordination, and operational standardization. Crypto custody faces similar challenges but with accelerated timelines and less regulatory clarity.
The convergence of exchange, broker, and custody functions that Ng identifies creates particular concerns for institutions. It specifically concerns institutions accustomed to the separation of duties and checks and balances in traditional custody arrangements.
When a single entity controls trading, settlement, and asset custody, traditional risk management frameworks break down. They require new approaches to operational security and counterparty risk management.
Institutional Due Diligence and Custody Standards
Ng’s front-line experience building institutional relationships reveals how custody concerns dominate institutional due diligence processes. “A lot of these financial institutions feel very much comfortable with Gemini, because of our regulations and the fact that we play by the rules,” he notes. Thus, he highlighted how regulatory compliance becomes a proxy for custody security in institutional decision-making.
The institutional comfort level that Ng describes reflects more than regulatory compliance. It represents comprehensive custody standards that address institutional risk management requirements. These standards encompass technical security measures, operational procedures, legal frameworks, insurance coverage, and audit protocols, which provide institutional-grade asset protection.
Ng’s traditional finance background helps him recognize how institutional custody requirements differ fundamentally from retail investor needs. Individual investors primarily concern themselves with preventing theft or loss of assets. Institutional investors must additionally consider fiduciary responsibilities, regulatory compliance, audit requirements, legal liability, and operational risk management. They create much more complex custody needs.
The evolution from “very lukewarm” institutional interest to “all in-bound” inquiries that Ng observed reflects growing confidence that crypto custody can meet institutional standards. This transformation required the development of custody solutions. They address not just technical security but also legal, regulatory, and operational requirements that institutions demand.
Family offices and financial institutions operate under different risk tolerances and regulatory requirements than individual investors. Ng’s experience reveals how custody solutions must address these varied institutional needs. At the same time, they should maintain the security and operational efficiency that makes crypto assets attractive.
Innovation Driven by Institutional Requirements
The institutional custody concerns that Ng identifies have catalyzed unprecedented innovation in crypto asset protection and management. “When I first spoke with institutions six months ago, the response was very lukewarm. Fast forward today, they’re actually sending us a lot of inquiries. It’s all in-bound. So that’s really a 180-degrees change,” he observes, describing the transformation enabled by custody innovation.
This institutional adoption acceleration reflects the development of custody solutions that bridge traditional finance requirements with crypto asset capabilities. Multi-signature wallets, hardware security modules, cold storage protocols, insurance coverage, and audit procedures have evolved rapidly to meet institutional standards. They also preserve crypto assets’ unique properties.
Ng’s institutional conversations reveal how custody innovation extends beyond technical security. It encompasses legal frameworks, regulatory compliance, and operational procedures that institutions require. Qualified custodians, fiduciary insurance, legal opinions, and regulatory oversight provide institutional comfort. They also enable access to crypto asset returns and diversification benefits.
The custody infrastructure development that Ng witnesses mirrors evolution in traditional finance. Here, complex custody frameworks enable sophisticated investment strategies while protecting institutional assets. Just as traditional custody innovation enabled derivatives markets, international investing, and alternative asset allocation, crypto custody innovation unlocks institutional access to digital asset markets.
Institutional custody requirements have also driven the development of new business models and service offerings. They separate custody functions from trading and investment management. This separation addresses the functional convergence concerns that Ng identifies. It also provides institutions with familiar operational structures and risk management frameworks.
Regional Variations in Custody Adoption
Ng’s experience building relationships across Australia, Hong Kong, and India provides insight into how different regulatory environments affect institutional custody adoption. His regional expertise reveals how custody solutions must navigate varying legal frameworks, regulatory requirements, and institutional practices across multiple jurisdictions.
“The type of conversations, a lot deeper, a lot more thoughtful,” Ng notes about institutional inquiries, describing how custody discussions have evolved from basic security concerns to sophisticated analysis of operational procedures, legal frameworks, and risk management protocols. This evolution reflects growing institutional sophistication about crypto custody capabilities and limitations.
Asian institutional investors, with their emphasis on operational security and long-term asset protection, have proven particularly demanding about custody standards. Ng’s experience suggests that meeting Asian institutional custody requirements often exceeds global standards, creating competitive advantages for custody providers that achieve Asian institutional approval.
The cultural emphasis on wealth preservation that characterizes Asian investing translates into particularly stringent custody requirements that go beyond regulatory minimums. Family offices, sovereign wealth funds, and corporate treasuries that manage generational wealth demand custody solutions that provide not just security but also operational continuity and regulatory compliance across multiple jurisdictions.
The Future of Institutional Crypto Custody
For Eugene Ng, institutional custody concerns represent temporary barriers rather than permanent obstacles to crypto adoption. His experience suggests that custody innovation will continue accelerating as institutional demand creates economic incentives for comprehensive solutions that meet fiduciary standards while preserving crypto assets’ unique benefits.
“It’s really increasing the Sharpe ratio of that entire portfolio. And with the innovation that we’re seeing in crypto space today, you don’t just buy bitcoin and hold it, there are so many other use cases,” Ng observes, highlighting how custody solutions must evolve to support sophisticated institutional investment strategies rather than simple buy-and-hold allocation.
The custody infrastructure that Eugene envisions will likely combine traditional finance’s institutional-grade security and compliance with crypto’s programmability and global accessibility. This evolution requires continued innovation in technical security, legal frameworks, regulatory compliance, and operational procedures that together provide institutional investors with confidence in crypto asset custody.
As institutional adoption accelerates, custody concerns that once represented insurmountable barriers are becoming innovation opportunities that drive the development of more sophisticated, secure, and institutionally compliant crypto asset management. Eugene Ng’s insight reveals how addressing institutional custody requirements isn’t constraining crypto innovation—it’s expanding the market to encompass the world’s largest pools of investment capital.