Crypto expert Vincent Van Code has explained why companies shouldn’t hold on to their XRP holdings amid the rise of government bonds. As part of his comments, he advocated that these companies acquire the token exposure to ETFs and other regulated wrappers rather than owning the coins.
Expert Explains Why Companies Should Avoid XRP Custody
In one X messageVincent Van Code argued that companies accidentally turn themselves into a bank, a security company and a regulated financial institution when they decide to manage their XRP themselves. He further noted that the bill for this error is “massive” as it has some consequences.
The crypto expert noted that most companies think they are holding their own shares own crypto tokens is the same as keeping cash in a bank account. However, he explained that this is not the same as holding XRP is one of the “most complex, expensive and compliance-heavy things” an organization can do. Vincent Van Code then used the altcoin as a case study.
He stated that self-control on a large scale, companies are not just storing a seed sentence, but are now operating a regulated asset environment. The crypto expert explained that this exposes these companies to annual audits, SOC2 checks and cold storage infrastructure. They should also be concerned about documentation of important ceremonies, separation of duties, mitigation of insider threats, and 24-hour surveillance.
Other Implications of Custody
Vincent Van Code further said that companies looking to self-manage their He further highlighted the cost implications of implementing such safeguards.
The crypto expert revealed that the annual fee for a good crypto custody program could easily reach seven figures. He noted that external audits alone cost between $250,000 and $500,000 per year when these companies take into account SOC2 Type II, penetration testing, cyber insurance, regulatory reporting and chain of custody controls.
Vincent Van Code also took into account the staff that these companies must take care of their own management XRP assets. In the meantime, these companies must bear the risk and liability if something breaks, a regulator asks questions, or the accountant discovers a hole in the accounts.
The best way for institutional adoption
Vincent Van Code stated that the real path to large-scale, multi-billion dollar XRP adoption is not through thousands of companies owning the token. Instead, he claimed that this is done through regulated wrappers, such as spot XRP ETFs and institutional treasury firms such as Ripple-backed Evernorth.
He explained that these vehicles shoulder the compliance burden, audit burden, operational risk and infrastructure costs. Vincent Van Code further noted that they allow this companies to maintain XRP exposure without becoming a bank. The crypto expert added that if mainstream companies adopt the token globally, it will be through these structures and not through DIY custodial operations that could succumb to their complexity.
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