Cryptocurrency exchange Binance is making a move into the hardware wallet industry, with its venture capital arm investing in cold wallet platform Ngrave.
Binance Labs has made a strategic investment in Belgian hardware wallet company Ngrave and will lead its next Series A round, the company officially announced on November 21.
Founded in Belgium in 2018, Ngrave specializes in self-custody, providing a security suite comprised of three main elements, including the Zero login hardware wallet, the Graphene key backup tool, and the Liquid mobile app.
Yi He, co-founder of Binance and head of Binance Labs, pointed out that security remains one of the biggest challenges for crypto adoption. “Self-custodial wallets are one of the most secure methods for storing digital assets,” he said, adding that Binance seeks to continue supporting startups that improve user security.
“Binance Labs is excited to capitalize on the emerging hardware wallet industry and partner with Ngrave to bring sophisticated wallet products to retail and institutional users,” added Binance Labs Chief Investment Officer Tyler Z.
It does not seem clear if Binance has ever invested in hardware wallet companies like Ledger or Trezor. In early November, Binance partnered with hardware wallet maker Ledger to allow Binance users to stake crypto through Ledger directly with their bank cards.
Binance did not immediately respond to Cointelegraph’s request for comment.
As previously reported, the ongoing cryptocurrency winter has accelerated the growth of the hardware wallet industry as many centralized crypto exchanges scramble to maintain operations. Unlike exchanges, hardware wallets give users more control over their funds by securing a private key. According to data from multiple studies released in July, the crypto hardware wallet industry may grow at a faster rate than exchanges in the near future.
On Nov. 14, Binance CEO Changpeng Zhao even admitted that centralized exchanges may no longer be necessary as investors switch to self-custody solutions. “If we can have a way to make it safe and easy for people to keep their own assets that 99% of the general population can do it, centralized exchanges won’t exist or probably won’t need to exist. , which is awesome,” Zhao said.
Related: Trezor Announces 300% Increase in Revenue Due to FTX Contagion
The latest news comes shortly after Ledger Pascal Gauthier argued that Binance-owned software wallet Trust Wallet must offer the Ledger Connect option in order to offer better security to its users. “Otherwise it’s just plain dangerous,” the CEO said in a tweet on Nov. 13. The login option basically allows Trust Wallet users to store their keys on a Ledger device instead of storing them on a mobile phone or computer.
—Pascal Gauthier @Ledger (@_pgauthier) November 13, 2022
A Trust Wallet spokesperson told Cointelegraph that the platform plans to release the integration with Ledger Connect as soon as the feature is on its priority schedule. The rep also pointed out that Trust Wallet users have “full recoverability” to access their funds on a chain as long as they remember their passphrase or a private key.