Crypto derivatives exchange giant Bitfinex has partnered with Koine, a London-based digital asset custody provider, to offer institutional-grade crypto custody services to its customers. This partnership will enable Bitfinex investors to mitigate counterparty risk and the use of private keys in the clearing and settlement of cryptocurrencies.
This partnership will also enable Koine customers with an account on Bitfinex to obtain a line of credit on the Bitfinex trading platform using BTC or other cryptocurrencies held with Koine. The Koine service provides settlement and segregated services for cryptocurrencies, along with cryptocurrencies to fiat. It also provides an efficient and real-time solution that bypasses manual post-trade processes.
According to the May 13 report, this partnership will enable Bitfinex to provide a trading environment that meets the needs of institutional investors. It will also provide its fund managers with a separate custody solution while maintaining continuous ownership throughout a trade life cycle.
Koine services have a unique security model which deploys Digital Airlocks. This serves as a replacement for the cold storage and hot wallet model that can compromise the security of private keys. The combination of this new digital asset security model together with fiat custody and DvP settlement enables Koine to provide a post-trade solution that is suitable for traditional capital markets.
Speaking on this collaboration, Hugh Hughes, Chairman and CEO at Koine said this partnership is an extremely important milestone for the company. He added that, giant exchanges like Bitfinex are the ones that will benefit from the shift to a more traditional market structure that will quickly lead to institutional capital participation.
Paulo Ardoino, CTO at Bitfinex, also said that the company has always focused on building a service, fit for institutional trading. He said this partnership is another step on the path towards massive institutional participation in the crypto-trading market.