OKX Partners with CoinShares and Komainu to Boost Institutional Adoption of Digital Assets
Summary:
Digital asset exchange OKX, asset manager CoinShares, and custody provider Komainu have formed a collaboration. The partnership will allow for 24/7 trading of segregated assets in a bid to increase institutional participation in the digital asset sector. These measures are part of a strategy to reduce counterparty risks and provide a robust mechanism for mutual asset management, making the digital asset trading landscape more appealing to institutional investors.
Digital asset exchange OKX has teamed up with asset manager CoinShares and custody provider Komainu to enable 24/7 trading of segregated assets, a move anticipated to boost institutional involvement in the digital asset space. The collaboration stipulates that CoinShares will conduct trading activities on the OKX platform, while Komainu, an independent custody provider, will be responsible for managing the collateral assets. This initiative is aimed at reducing counterparty risks, such as situations where a trading transaction goes wrong because one party fails to deliver on its obligations. According to Sebastian Widmann, Komainu's Head of Strategy, adopting this approach will attract institutions into the digital asset space by replicating existing financial market infrastructures. Widmann added that offering third-party custodial services for collateral assets provides clients with substantial assurance throughout their trading lifespan. OKX's Chief Commercial Officer, Lennix Lai, expressed that the new setup tackles one of the major obstacles to institutional traders - counterparty risks. He elaborated that with the current provision of secure custody solutions, deepening liquidity, and evolving regulatory frameworks, the last existing challenge was the counterparty risk posed to institutional traders. Lai added that this safeguard bolsters institutional traders' confidence and trust, thereby providing a more substantial environment for digital asset transactions. Previously, in a conversation with Cointelegraph, he noted the importance of enhancing compliance standards to attract more traditional financial investors into the crypto sector. On a related note, CoinShares's Head of Hedge Fund Solutions, Lewis Fellas, stated that the current collaboration creates a secure mechanism for mutual asset management. In Fellas's view, the partnership demonstrates the firm's proficiency in establishing intricate tripartite agreements that cover collateral, security, and legal risks, all of which are relevant for institutional investors. According to Magazine, the partnership represents the hard-hitting success story of Polygon's Sandeep Nailwal.
Published At
11/15/2023 8:00:00 AM
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