Crypto firm Seba Bank has started its first NFT service, an institutional-grade, certified and independently audited hot and cold storage custody product for blue-chip NFTs.
The rollout comes in response to demands from clients to store their NFTs with the bank alongside other crypto assets, such as Bored Ape Yacht Club, Cryptopunk and Clone X NFTs, which already have been approved. The bank said new collections will be added according to the needs of clients.
Seba Bank hopes to appeal to both investors who see NFTs as an asset class as well as crypto natives with its latest product. There’s a popular saying in crypto — “not your keys, not your bitcoin” — and those who abide by this mantra might balk at locking up their Apes or Punks with a third-party custodian.
But Urs Bernegger, co-head of markets and investment solutions at Seba Bank, points to a growing cadre of NFT holders who feel more comfortable entrusting NFTs and private keys to an institution.
“They don’t want the key because they don’t even know how to store the key and handle the key. They’re more afraid of doing something wrong with the key than giving it to a bank,” he said.
It’s no small problem. Chainalysis estimates that between 2.3 million and 3.7 million bitcoin alone are locked in inaccessible wallets. From Russian politicians to students to engineers, there’s no shortage of stories of those who have lost millions due to losing private keys. Sudden deaths where wallet owners haven’t shared their private keys also have left families unable to access life-changing sums of money.
For crypto natives, Bernegger claims institutional custody can have benefits too. There’s been an uptick in companies offering services where NFTs are used as collateral for traditional banking services such as lending.
These are features Seba Bank is considering in the future. Based in the crypto-friendly Swiss town of Zug, the four-year old bank already supports a variety of investment, credit, lending and Staking solutions for cryptocurrencies and could extend them to NFTs.
“We could do a club of collectors and help them to find other collectors rather than going to the market, for example. There are things we have in mind, but at the beginning we basically set the foundation, the secure storage of NFTs,” he said.