Blockchain Guardians: Marathon Digital VP, Other Industry Leaders Push For Transparency In Custody

As digital assets continue to reshape financial systems, custody solutions are emerging as a central concern for retail and institutional investors.

During a panel at the recent Benzinga Future of Digital Assets conference, industry leaders explored the evolving role of custody in safeguarding digital assets, balancing security with accessibility, and building trust through transparency.

Kevin Maloney, CEO of iTrustCapital, explained how his platform accommodates over 55,000 users by collaborating with custodians such as Fire Blocks and Coinbase Prime. Our clients want safety and peace of mind without the technical burden of managing their keys," Maloney explained. The company employs a blend of offline cold storage and controlled online withdrawal access, providing security and functionality.

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The ability to meet user demands while maintaining robust safeguards has become an essential focus for custody providers. As Maloney described, this approach ensures assets remain secure while accommodating the needs of users moving funds in and out regularly.

Building Trust Through Transparency

Paul Giordano, vice president of digital asset management at Marathon Digital Holdings, highlighted how public companies depend on audited, federally chartered banks to store digital assets. "Transparency and accountability are non-negotiable. It's the foundation of our strategy," Giordano said.

Maloney proposed adopting regular spot checks for custodians to bolster trust. "Annual audits don't go far enough. Investors need to see proof of reserves more frequently to have real confidence," he stated.

The panel also addressed past industry failures and their lessons. Giordano pointed to rehypothecation, where assets are repeatedly pledged as collateral, as a critical risk. "This practice creates instability and can lead to systemic failures during market downturns," he warned.

Accountability as a Path Forward

While custody technology has become more reliable, the panelists agreed that human errors and unethical practices often create the most significant risks. Ben Spiegelman, vice president at Figment, emphasized this point: “The real issues have been about bad actors misusing assets rather than technical vulnerabilities."

Looking to the future, the panelists expressed optimism about greater collaboration between traditional financial institutions and digital asset providers. Giordano remarked on the involvement of established players like State Street, which he believes could help bring more clarity and order to the industry.

Maloney also emphasized education as a vital component of adoption. "The more transparent and clear we are, the easier it will be for new participants to feel confident in this space," he said.

By addressing past missteps and prioritizing transparency, custody providers are laying the groundwork for a more secure and trustworthy digital asset ecosystem. As Spiegelman aptly summarized, "Building trust is essential to encouraging adoption and delivering meaningful value to users."

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