ING bank spins off its cryptocurrency custody platform to GMEX group

Netherlands-based ING Bank has spun off Pyctor, its cryptocurrency custody and post-trade infrastructure platform, which becomes a service offering within GMEX, a trading technology platform specializing in digital assets.

GMEX CEO Hirander Misra was appointed chairman of Pyctor, which will continue to work with the bank and collaborate with ING’s digital assets team, according to a press release. The financial terms of the arrangement were kept private.

Most banks showed a clear preference for “the blockchain” rather than cryptocurrency, and followed one another in various pilot schemes and private consortia and so on. Meanwhile, ING distinguished itself by exploring advanced cryptography, such as zero-knowledge proofs.

Pyctor, which was incubated in ING Neo’s Amsterdam innovation lab, combines hardware-based security favored by banks with software-based sharding of the keys used to move digital assets, known as multi-party computation (MPC). ING has also tackled anti-money laundering (AML) for crypto via Pyctor’s travel rule module, and also through the bank’s participation with the Travel Rule Protocol (TRP).

GMEX chief Misra said the move was in some way comparable to JPMorgan spinning off enterprise Ethereum client Quorum, which became part of Brooklyn-based ConsenSys. For its part, GMEX has formed a partnership with Amazon Web Services (AWS) to deliver a seamless crypto trading environment for institutional players.

“It made sense for ING to spin Pyctor out and then it becomes much more neutral,” said Misra in an interview. “We’ve got a strong go to market with the likes of AWS and others, and the bank can capitalize on that. These networks are all about wider adoption, so getting beyond a single player or a small set of players.”

Digital Assets Lead at ING Bank Hervé Francois, who was also CEO of Pyctor for four years, said “after this successful exit, I have decided to focus on new endeavors outside the bank,” via a direct message to CoinDesk.

“After spinning off Stemly last year from ING Labs Singapore, Pyctor has been another innovation success story at ING Neo,” said ING’s head of innovation labs Olivier Guillaumond in a statement.