Bitfinex: a solution for institutional custody
Bitfinex: a solution for institutional custody
Crypto

Bitfinex: a solution for institutional custody

By Marco Cavicchioli - 13 May 2020

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Bitfinex has announced the launch of a new custody solution for institutional investors in partnership with Koine. 

Koine is a company authorized by the UK’s Financial Conduct Authority (FCA), and its custody service is specifically designed for large institutional investors. 

It provides investors with the ability to mitigate counterparty, insolvency and credit risks, as well as reducing the need to use private keys for clearing and settlement.

Henceforth, Koine clients who also have an account on Bitfinex will be able to obtain a line of credit on the trading platform using bitcoin or other cryptocurrencies held on Koine. The service offers an almost real-time solution that eliminates manual post-trading processes.

Bitfinex aims to increasingly establish itself as a crypto exchange that offers a high-level trading infrastructure for the capital market, with state-of-the-art solutions such as algorithmic trading that can dramatically increase capital efficiency and trading volumes through cross-venue trading and real-time settlement. 

The partnership with Koine will provide fund managers with a custody solution separate from the exchange while maintaining full ownership during trading. 

Koine’s security model is based on Digital AirlocksTM, which replaces the model based on cold storage and hot wallet, and DvP settlement. 

President and CEO of Koine, Hugh Hughes, said: 

“Collaborating with Bitfinex to help bring new funds into their trading environment is an extremely important step in our evolution. It is leading exchanges like these that will benefit from the shift to a more traditional market structure that will quickly lead to institutional capital participation and the rapid growth of trading from algorithmic funds”.

The CTO of Bitfinex, Paolo Ardoino, commented: 

“We have always focused on building a service fit for institutional trading. In this collaboration with Koine for the delivery of custody post-trade infrastructure, we make another step on the path towards massive institutional participation in the crypto-trading market”.

The process of merging crypto markets within the global financial system has been underway for some time, and is now unstoppable, mainly due to the growing interest of major global financial players in these new assets with enormous potential. 

Until now, it has probably been precisely the lack of adequate infrastructure, guaranteeing a high level of security for those who have enormous capital to invest in these new markets, that has restricted their access. However, this limit is about to be overcome, and it may not be long before traditional finance enters this market en masse. 

Marco Cavicchioli
Marco Cavicchioli

Class 1975, Marco teaches web-technologies and is an online writer specializing in cryptocurrencies. He founded ilBitcoin.news, and his YouTube channel has more than 25 thousand subscribers.

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