Crypto exchange OKX, custody provider Komainu, and asset manager CoinShares have joined forces to offer 24/7 segregated crypto asset trading for institutions, which aims to promote the wider adoption of digital assets. Sebastian Widmann, Head of Strategy at Komainu, believes that this collaboration is a crucial step for the institutional adoption of digital assets.
Through their partnership with CoinShares, OKX enables trading on its exchange, while Komainu, serving as the third-party custody provider, safeguards the collateral assets throughout the trade. This arrangement mitigates counterparty risks by minimizing the chances of one party failing to fulfill its obligations.
According to Sebastian Widmann, this type of trading closely resembles traditional financial market infrastructure and has the potential to attract more institutional investors to the crypto space. “By acting as independent, trusted, and regulated custodians for collateral assets, we provide additional assurances to our clients throughout their trading lifecycle”, Widmann explained.
According to Lennix Lai, the chief commercial officer at OKX, this new solution addresses one of the biggest hurdles for institutional crypto trading, counterparty risk. He explained:
“Secure custody solutions, regulatory frameworks, and deepening exchange liquidity are in place for institutional crypto trading. But we’re still seeing counterparty risk as a challenge.”
Lai is confident that this solution can foster trust and confidence among institutional crypto traders, thereby establishing a more reliable landscape for digital asset transactions. In a previous interview, Lai emphasized that raising compliance standards is crucial to attracting traditional finance investors to the crypto space.
To Lewis Fellas, the head of hedge fund solutions at CoinShares, this partnership creates a “robust legal mechanism” for managing mutual assets. Fellas further stated that this collaboration showcases the company’s expertise in”negotiating complex tripartite agreements that cover collateral, security, and legal risks” elements that are vital for institutional investors.
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