Seychelles-based Bitfinex and UK regulated Koine’s collaboration targets making custody services safe from counterparty risks
Bitfinex and London-based crypto custody provider, Koine, have announced a partnership that sees the two firms launch an institutional-grade crypto service.
The new offering, announced Wednesday, May 13, provides customers access to an “institutionally oriented” product that allows customers to hold their assets without worrying about counterparty risk.
Users on the UK-based platform will also access a post-trade service that safeguards them against “insolvency and credit risks” related to exchange trades.
It also means that Koine’s customers holding accounts on the British Virgin Island registered Bitfinex will get access to a line of credit on their Bitcoin (BTC), Ethereum (ETH), and other crypto holdings traded on the exchange.
Bitfinex’s partnership with the Financial Conduct Authority (FCA) means that regulated Koine provides the iFinex owned crypto exchange, with an opportunity to lure large investors with an institutional-grade offering tailored to ensure safe storage for client assets.
Bitfinex CTO Paolo Ardoino said that the collaboration provides “another step on the path towards massive institutional participation in the crypto-trading market.”
According to Hugh Hughes, the CEO of Koine, its partnership with Bitfinex will “help bring new funds” to the crypto exchange. It also is another important step in Koine’s evolution.
Hughes added that partnering with a leading exchange such as Bitfinex could see increased institutional participation. The huge capital inflows likely to result from this could spur further growth within the sector. Algorithmic traders can benefit from the added efficiency to significantly surged trading volumes.
Koine’s custody solutions target investors keen on secure storage and “millisecond settlement within [its] eco-system of partner exchanges and brokers.”
The company allows institutional investors to hold and access real-time settlement for both digital assets and fiat currencies.
The company uses the Digital AirlocksTM security model, which dispenses with the more traditional cold storage or hot wallet storage systems. With most exchanges on the hot or cold menu, customer assets are usually at risk because private keys can easily be compromised.
Last week, Bitfinex launched a new derivative product that allows investors to benefit from the rise or fall of Bitcoin’s dominance index. According to the company, the BTCDOM contract is less volatile compared to one that bets on the price of the cryptocurrency.
The Bitcoin Dominance Index is calculated from a comparison of trading volumes with seven cryptocurrencies that make the benchmark cryptocurrency’s most liquid trading pairs. These include Ethereum (ETH), Ripple (XRP), and Litecoin (LTC).
In April, the exchange introduced Pulse, a ‘social trading’ platform it said would allow its community of users to share trading ideas.