KN0X launches institutional custody service with insurance coverage

0:00I'm Ashlyn Addison from event chain for investmentpitch media and FinTech news network and today on blockchain interviews we have Alex desk love CEO of NOx Alex thank you so much for being on the show it's a pleasure to have you on today yeah thanks so much I should great to be here you're welcome I'd love to hear a little bit about NOx but if you could start off with your

0:22background into how you got into the cryptocurrency and blockchain industry that would be great yeah sure so I've been involved in software my whole life Bitcoin itself I started hearing chatter at some point in 2010 I remember kind of summer 2010 building Bitcoin D from stores and really jumping off from there I think I actually built the built the

0:42daemon before I read the white paper but of course shortly thereafter read the white paper started reading some of the close to the community and got more and more interested that's great so you've an early adopter in the space so to say in this short time even though we've only been around for about 10 years so far I'm sure you've seen this space evolve into what it is today now with a

1:02lot more institutional interest yeah that's right certainly I mean it is still a nascent time but I have been waiting in earnest for institutions to come along and certainly have been excited that for the past few years sort of seeing some of the activity increasingly so and I believe increasingly so in the near future as well that's great and can you talk a little bit about Knox's

1:23digital asset custody with comprehensive insurance which sounds like some unique selling proposition of some sort how are you guys changing the way people are investing in the space yeah that's right so I believed for the longest time you know that everyone ought to hold their own private keys and never never delegate them to anybody else so perhaps

1:44if you had asked me five years ago I would have told you I'd never be doing something like running a custodial service but I came to realize of course that in many cases there are mechanisms that can't be you know can't be provided without somebody else holding on to something someone else's keys and so I came to believe there that comprehensive insurance would be critical that if

2:03you're not going to hold on to your own private keys that the full value of the assets are to at the least be insured and so what we offer is yet an insured custodial service where folks can get a dedicated allocation of insurance from our insurance Tower and so we really believe in exclusive allocation so what happens is when we onboard a customer we'll decide with

2:26that customer what percentage of their assets would they like fully insured insured up to the full value of some number oftentimes 100% and then from there what we do is we have our broker actually act as a trusted third party so they'll go and create signed certificates attesting to the full weight of the insurance backing that particular account as you can imagine

2:51insurance of course a complicated piece behind the scenes and so we want to make sure that people understand exactly what's happening and so one of our goal is really with all of this is to say we should be as transparent as possible about the insurance policies that are in place and and make it those clear to the customers mm-hmm wow that's really interesting Alex and now is this

3:10comprehensive insurance is a brand new thing for Knox and for the industry are there many competitors doing this and did you guys just release this yes we're just releasing this now and as far as we can tell really the status quo is to purchase a some insurance policy and then oftentimes firms will overrun their their insurance policy by by substantial

3:35sum so so far as we've we've seen we've not seen anybody you know offering the kind of insurance properties that we offered and that's really for us a very important point for any investors coming in that having this kind of comprehensive insurance should be should be an important question that anybody asks definitely now with these custodial services the a lot of new investors to

3:59the cryptocurrency space are hearing that you know there's there's hacks on exchanges and it's a dangerous place out there so you need somebody to keep your private keys safe and that's another debate that you had whether to hold your own keys or have somebody else do it for you but what kind of or what level so to say of investors are really the target

4:19clients for the people who should be using custodial services with comprehensive insurance yeah so frost really our customer set is people who oftentimes you might be some portfolio manager obviously your entire portfolio might not be on cryptocurrencies I mean in some cases it is but regardless the case oftentimes people are looking for growth in some in

4:42some asset class and they have seen tremendous growth in Bitcoin and other cryptocurrencies and are telling themselves you know I can't I can't miss this boat I need to I need to enjoy the upside that's available here at the same time you know they read the media they see what's happening and they see people sort of often losing their shirts when it comes to thefts and losses related to

5:03to the underlying holdings and so our customer profile is quite quite straightforward it's people who who want that growth and are willing to you know pay a small sum in order to have their downsize capped I had to say I don't I don't want to be susceptible to to theft and loss risk but I do want I do want to see the growth otherwise mm-hmm interesting and for those investors that

5:26they've bought some Bitcoin and now they're looking to trade possibly or rebalance their portfolio between other altcoins where it's aetherium or smaller cap coins or maybe they're looking to possibly state coins does having custodial services holding their private keys prohibit them from doing these things so I think as you see the industry is growing such that you know a

5:48lot of us will be offering these sorts of services as well we can make some announcements in the near future now whether whether we do some of that staking directly or work with some partners to do so is another topic but I believe that the ability to both in some instances have somebody else hold on to your bitcoins oftentimes say with comprehensive insurance will not get in

6:11the way of every other activity that you might wish to engage mm-hmm yeah definitely and when now some ETFs just recently launched for Bitcoin and this is supposed to bring a lot more institutional interest what would you say is the first thing that new investors and fiduciaries need to know about keeping their digital asset safe so yeah I mean the I think it's

6:38important oftentimes for people who are purchasing other products to understand the custodial services backing these so you know just this week we're seeing the launch effect and some other services and I think even there it's it's quite critical that people understand how these you know how the how the coins are being held under the scene behind scenes

6:59yeah you got it now with Knox specifically how are you guys making a sustainable business model and are you taking a cut of the profits of coins or just simply managing fees how does that work with Knox yes our pricing model is quite straightforward when we onboard a customer one of the things we do is we help the customer kind of look at their business understand their own margins

7:23and oftentimes will try to align our own you know our own pricing model to fit theirs so typically we charge a percentage of of a you see piece which is to say whatever you hold some small percentage will be charged in fees and we will vary that based on the extent to which they might want to be fully insured so somebody might come in with 100 million dollars of Bitcoin and say

7:48you know I really need to have one percent of the full but the full value of the assets insured and some of they will come to pay that fee otherwise we can we can reduce the fees based on kind of changing changing the amount which the extent to which their insured it's certainly going forward in the future we're actively going to be trying to reduce fees by working with the

8:08insurance industry to to lower premiums to our knowledge at the moment our premiums are significantly lower than its typical but we still think that there's quite a ways to go yeah yeah it's very competitive out there and now with this new comprehensive insurance that you guys are offering are you relying on that heavily as you continue to market to grow your customer base to

8:29look for other institutional investors throughout North America yes so certainly our initial customers are a guiding light as to the kind of people will be onboarding next and they're really there's this set there's a set of people who really believe that this level of insurance coverage is is important for them yeah you got it now with this release what's next with

8:52the development of Knox do you guys have other major things that you're planning before the end of the year or in the next six months yes we have quite a few products under developments or working with some select clients on some of these some of these future products in many cases I'm sort of much faster say withdrawals in the sort and at the same time for us

9:10insurance is kind of a never-ending never-ending development so much as a piece of software is never complete an insurance program is really never complete we're constantly looking to lower the price of premiums increase the capacity limits that are available to us and the rest of the market and judge continue that way yeah whichever ways you can find to provide value that's

9:32right so as you continue to grow what challenges or obstacles do you foresee Knox may run into yeah so certainly for us kind of the the insurance industry as it stands is still quite nascent when it comes to insuring digital assets as a whole and so that is something that we're constantly constantly developing as I mentioned and so that is certainly

9:56a challenge as we as we grow insuring that we can maintain the coverage that we wish to maintain for each customer and making sure that we're not having to turn people away from from entering just because you know of sort of aggregate capacity limits or anything of the sort that's certainly something that we're looking at and then otherwise on the technical development side you know

10:16there's always more products you can generate so it's really just a story of active development of no software hardware and processes as well as active development to the insurance industry to to support them mm-hmm that's great and are you guys looking for more developers more investors strategic partners or majority customers so I mean as many companies like us we're hiring all the

10:41time so certainly it's certainly always on the lookout for challenging people to join the team we're not ready to announce any specific plans for the next investment round but certainly certainly if there are you know talented programmers or otherwise talented folks in any capacity we would love for those folks to reach out to as well as prospective customers that's

11:04great and if those developers or other customers are looking to get a hold of Knox and get a hold of you what's the best way to get more information yes you can visit our website debt Knox thought I oh that's spelled with a 0x as we said sort of in the beginning in the interview just knocks itself started as a bit of a programmers joke which is not spelled with 0x marketing to the

11:25hexadecimal literal and you can email us at custody at Knox that io4 you know enquiries into custody or otherwise infobox for general information great I'll leave those links in the description box below thank you so much for your time Alex that's all the time that we have today for this interview but let's follow up in the near future and follow the progression of Knox yeah

11:47thanks so much yet and grace PD action so have a great day