Dutch bank ING sells digital asset tool Pyctor to GMEX

GMEX has acquired ING's Pyctor business to connect CeFi and DeFi amid growing demand for hybrid finance.

ING Group, a Dutch multinational banking and financial services company, has spun off its Pyctor digital asset business to multi-asset trading infrastructure company GMEX.

GMEX has acquired ING's institutional-grade digital asset custody solution, Pyctor, in a multimillion-dollar deal, the companies said in a joint announcement on Monday.

The Pyctor offering complements the MultiHub service from GMEX, a cross-platform institutional company launched last year with a mission to bridge the gap between centralized finance (CeFi) and decentralized finance (DeFi), said Hirander Misra, CEO of GMEX, to Cointelegraph.

Pyctor extends MultiHub with a number of digital asset-focused features, including smart contract functionality, post-trade custody and institutional network capabilities like private key sharding.

Pyctor is also designed to support regulatory compliance, including a major anti-money laundering framework by the Financial Action Task Force (FATF) called the Travel Rule.

“There is a market need for this type of bank-designed offering for banks, asset managers and corporate clients, who can now operate in a neutral environment for institutional participants,” said Misrah. Institutions are increasingly looking to expand their digital asset trading and settlement capabilities in a way that is interoperable with existing CeFi systems and asset classes, the CEO added, stating:

“This necessitates the need for hybrid finance, or HyFi, which provides a hybrid digital market infrastructure solution with the interoperability of multiple blockchains and API integration into traditional systems to ensure a consistent approach."

ING launched Pyctor as an incubated project from its innovation arm ING Labs in Amsterdam in 2018. Pyctor's technology manages private keys by sharding them and distributing them among blockchain nodes hosted by regulated institutions.

ING completed the first proof of concept of Pyctor in 2019, then formed a working group for sandbox testing, with participation from major global banks and corporations such as BNP Paribas, Citi, ABN AMRO, Society...