Komainu, a reputable digital asset custody service for institutional needs, alongside Copper, a leader in institutional digital asset solutions, announced their collaborative effort. This linkage empowers Komainu’s institutional clientele to execute trades through Copper’s ClearLoop, marking a robust partnership for enhancing off-exchange settlements.
Requirement Of Off-Exchange Settlement For Institutional Adoption
In a recent post, Komainu and Copper have joined forces. This partnership is set to enhance Komainu’s institutional client experience by integrating the swift settlement times of Copper’s ClearLoop.
This collaboration promises a mixture of regulated, on-chain custody courtesy of Komainu and the speedy off-exchange settlement facilitated by ClearLoop, with settlements finalized in up to T+4 hours. This implies that trades will now be settled much quicker, within four hours post-transaction, a significant leap in operational efficiency. Moreover, clients will enjoy bankruptcy-remote protection throughout the structure and trade lifecycle, adding a robust layer of security.
As digital asset markets see an uptick in institutional participation, Copper draws from the tried-and-true practices of traditional markets to serve the rising client demand for diversified counterparty risk. The considerations of custody and counterparty risk have gained more significance for digital asset investors in the aftermath of the downfall of the crypto exchange FTX last year.
Since its inception in 2020, Copper’s ClearLoop has been reducing counterparty risk, working alongside exchanges and prime brokers, and now adding Komainu to its list of partners, pending the finalization of legal documentation.
Nicolas Bertrand, Komainu’s CEO, said, “Together with Copper, we are bringing tried and tested best practices and infrastructure from traditional markets to meet the growing demand of digital asset participants to diversify counterparty risk. This partnership provides a best-of-both worlds scenario whereby clients benefit from Copper’s proven processes and connectivity alongside visibility of their assets via our on-chain, segregated and regulated custody platform.”
Off-Exchange Settlements To Increase Liquidity
Multi-custodian off-exchange settlements hold immense potential for facilitating greater institutional adoption of digital assets.
- Enhanced Security: Institutions require robust security frameworks to protect their assets. Multi-custodian off-exchange settlements offer a level of security that can be higher than what’s traditionally found on exchanges. By distributing the responsibility of asset custody among multiple parties, the risk associated with central points of failure is mitigated.
- Operational Efficiency: Off-exchange settlements, facilitated through multi-custodian arrangements, can streamline the transaction process by reducing the number of intermediaries and potentially lowering the associated fees. This operational efficiency can be attractive to institutions looking to minimize costs and transaction times.
- Market Integrity: Multi-custodian arrangements can contribute to market integrity by reducing the risk of market manipulation and fraudulent activities. This is achieved by segregating duties and creating a more transparent and traceable transaction trail.
- Improved Liquidity: By enabling a secure and efficient environment for large transactions, multi-custodian off-exchange settlements can attract more institutional players. This, in turn, can lead to improved liquidity in the digital asset market, which is beneficial for both institutions and the ecosystem.
Dmitry Tokarev, CEO at Copper, said, “Our partnership with Komainu is a proud moment for us, forging ahead our shared mission to shape and secure the financial markets of tomorrow. This spirit of cooperative product development is imperative to spur industry growth, driving forward both technological advancements and trustful engagement within the evolving digital asset landscape.”
Based in Jersey with additional offices in London, Dublin, Dubai, and Singapore, Komainu boasts an OAM registration in Italy. Moreover, it holds an MLR registration under the UK Financial Conduct Authority (FCA) and operates under the regulatory oversight of the Jersey Financial Services Commission (JFSC) and the Dubai Virtual Assets Regulatory Authority (VARA).
