In a move aimed at fostering the adoption of digital assets among institutional investors, cryptocurrency exchange OKX has joined forces with custody provider Komainu and asset manager CoinShares. The collaboration seeks to enable round-the-clock trading of segregated assets while addressing counterparty risks that have been identified as a significant hurdle for institutional traders.
CoinShares & OKX: A New Era in Trading
CoinShares is set to conduct trading activities on the OKX exchange, while Komainu, acting as a third-party custody provider, will secure and manage the collateral assets. This approach minimizes the risks associated with counterparties failing to fulfill their obligations during trading transactions.
Sebastian Widmann, Head of Strategy at Komainu, emphasized the importance of emulating traditional financial market infrastructure to attract institutional adoption of digital assets. “By acting as independent, trusted, and regulated third-party custodians for collateral assets, we give our clients additional assurances throughout their trading lifecycle,” stated Widmann in an official statement.
Lennix Lai, Chief Commercial Officer at OKX, highlighted the significance of this partnership in addressing a critical concern for institutional traders—counterparty risks. Lai stated, “Secure custody solutions are live. Regulatory frameworks are taking shape. Exchange liquidity is deepening alongside the development of the trading ecosystem.
However, counterparty risk is a big remaining hurdle for institutional traders.” He believes that the added protection provided by Komainu’s custody services reinforces trust and confidence among institutional traders, creating a more reliable landscape for digital asset transactions.
In a previous interview, Lai stressed the importance of elevating compliance standards within the crypto space to attract traditional finance investors.
Lewis Fellas, Head of Hedge Fund Solutions at CoinShares, emphasized that the partnership establishes a “legally robust mechanism” for the mutual management of assets. Fellas further noted that the collaboration showcases CoinShares’ expertise in negotiating complex tripartite agreements covering collateral, security, and legal risks—essential factors for institutional investors.
This strategic partnership follows the exchange’s recent collaborations, including an expanded partnership with CoinRoutes on August 17, 2023, to provide API-enabled trading services to institutional clients. On July 21, 2023, OKX partnered with liquidity provider Heybit to introduce the ‘Alpha on OKX’ automated trading service to global users.
Additionally, on September 19, 2023, OKX announced its partnership with Solana Mobile to integrate the OKX app into the Solana Saga’s dApp store, positioning it as one of the first exchange apps available on the Solana Web3 smartphone. This collaboration aims to unlock OKX’s industry-leading Web3 products for Saga users, serving as a powerful gateway to the world of digital assets.
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