Partnership aims to mitigate counterparty risks and enhance trust for institutional traders
Leading crypto exchange OKX has announced a strategic collaboration with custody provider Komainu and asset manager CoinShares. The partnership aims to facilitate round-the-clock trading of segregated assets, with the goal of driving institutional adoption of digital assets.
Under the agreement, CoinShares will conduct trading activities on the OKX exchange, while Komainu, a trusted third-party custody provider, will hold the collateral assets. This arrangement helps mitigate counterparty risks, ensuring that both parties fulfill their obligations in trading transactions.
Sebastian Widmann, head of strategy at Komainu, emphasized the importance of this collaboration in attracting institutions to embrace digital assets. He stated that by acting as independent, trusted, and regulated custodians, they provide additional assurances to clients throughout the trading process.
Lennix Lai, the chief commercial officer at OKX, highlighted that this development addresses a key concern for institutional traders - counterparty risks. He explained that while secure custody solutions, regulatory frameworks, and exchange liquidity have improved, counterparty risk remains a significant obstacle. The collaboration aims to reinforce trust and confidence among institutional traders and create a more reliable landscape for digital asset transactions.
The partnership also demonstrates CoinShares' expertise in negotiating complex tripartite agreements that cover collateral, security, and legal risks, according to Lewis Fellas, head of hedge fund solutions at CoinShares. Fellas added that the collaboration establishes a legally robust mechanism for the mutual management of assets, which is crucial for institutional investors.
In a previous interview, Lai emphasized the importance of raising compliance standards to attract traditional finance investors to the crypto space. This collaboration represents a step towards achieving that goal.
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