Why did we choose Bitgo as our custodial solution?

Hey Lantern Community,

You might have seen this line on our website: All custodied crypto is fully insured and stored in BitGo (up to $250MM).

But what does it really mean?

But first, market update!

BitGo Introduction

Let's break it down:BitGo started in 2013 as a pioneer in crypto security, and today they're trusted by over 1,500 institutions worldwide, managing more than $100 billion in digital assets.Here's why we chose BitGo:

1. Qualified Custodian

Bitgo uses a qualified custodian model that adheres to the highest regulatory and security best practices and standards vs regular custody vendors. Unlike the generic way "custodian" gets used in crypto, a "qualified custodian" is a regulated entity with a fiduciary duty that holds client funds in segregated accounts and meets rigorous regulatory standards.

2. Comprehensive Insurance Coverage

BitGo offers some of the most extensive insurance protection in the industry:

Industry-Leading Policy Limits

BitGo maintains insurance coverage of up to $250 million for digital assets where BitGo Trust Company holds all the keys.The policy covers critical risks, including:

• Copying and theft of private keys

• Insider theft or dishonest acts by BitGo employees or executives

• Loss of keys

Their insurance policy is provided by insurers in the Lloyd's of London and European Marketplace, which are known for insuring some of the world's most valuable assets. All of Lantern’s borrower collateral is stored with BitGo’s insured cold storage.

3. Institutional-Grade Infrastructure

BitGo's security infrastructure is designed specifically for institutional requirements like ours:

Cold Storage Excellence

BitGo implements deep cold storage solutions with a bank-grade physical vault.Their approach includes sharding keys across multiple physical vault locations and requiring multiple people to be physically present to unlock institutional funds.

Rigorous Control Environment

BitGo has established institutional-quality control environments with comprehensive policies and procedures for digital asset management:

• Qualified custody certification under the Advisers Act of 1940

• Strong Know-Your-Customer (KYC) and Anti-Money-Laundering (AML) oversight

• SOC 1 and SOC 2 Type II certifications that demonstrate the strength and reliability of security and financial controls

• Membership in the CryptoCurrency Security Standard (CCSS) and Financial Services - Information Sharing and Analysis Center (FS-ISAC)

What this means for you

When you're evaluating where to get a crypto-backed loan, security should be your top priority. The crypto industry has seen too many stories of lost funds and platform collapses.With Lantern, you get:

• The security of BitGo's multi-signature technology

• $250 million in insurance coverage

• Cold storage in physical vaults

• A US-based company operating under robust regulations

We didn't choose BitGo because it was the easiest option. We chose it because it is the most secure option, with a proven track record since 2013 and clear institutional adoption.

If you have any questions about our approach to crypto lending or suggestions for future newsletter content, please reach out.

Until next time,

The Lantern Team