During a tense Senate Banking Committee hearing on Tuesday, in which Facebook blockchain lead David Marcus was skewered over the social media company’s ambitious Libra project, Sen. Mike Rounds (R-S.D.) started his remarks with a brief announcement:
“Mr. Marcus, thanks very much for appearing here before us today. Before I begin my questions, I just want to take a moment to commend the South Dakota Division of Banking for their forward-thinking and willingness to allow for innovation in the digital currency space. Another founding member of the Libra Association, Anchorage, just received permission from the Division of Banking to become a South Dakota chartered trust company.”
Observers may have found it odd given the tenor of the hearing, but indeed, Rounds had it right. “Anchorage, which is a Silicon Valley crypto startup,” he said, “has chosen to open its second headquarters in Sioux Falls.”
Amidst the fear, uncertainty and doubt hanging over the hearings, Anchorage was improbably enjoying its moment in the sun.
The startup recently raised a $40 million Series B on the promise of crypto custody services for institutional investors that are “both more secure and more usable.” Anchorage’s technology avoids the traditional dichotomy of internet-connected hot wallets and offline cold storage in favor of specialized hardware security modules (HSMs). The company’s custom HSMs “will process a given transaction only when certain criteria are met,” according to a company blog post from April.
In June, Anchorage also snagged a seat at the table of the Libra Association alongside some of the world’s most powerful brands. (Anchorage investors Andreessen Horowitz and Visa are also founding members of Libra’s initial 28-company consortium.)
CoinDesk spoke with Anchorage CEO Nathan McCauley the day after the Senate hearing about why shopping jurisdictions made sense and what the benefits of launching a subsidiary in South Dakota are expected to be.