OKX
has expanded its partnership with asset manager CoinShares and custody joint
venture Komainu to offer derivatives trading with a feature—mitigating
counterparty risk associated with assets held on the exchange.
The
initiative comes on securing trading practices within the cryptocurrency space,
particularly after the notable events surrounding FTX last year. In response,
several industry players have sought ways to facilitate off-exchange trading
and settlements within the confines of custody setups.
Lewis Fellas, Head of Hedge Fund Solutions at CoinShares, Source: LinkedIn
While
off-exchange settlement is relatively straightforward for spot markets,
derivatives trading introduces additional complexities. Lewis Fellas, Head of
Hedge Fund Solutions at CoinShares, emphasized the significance of providing a
similar secure arrangement for derivatives.
He
explained: “We’ve taken a collateral mirroring agreement and embedded that
so we can trade the full suite of OKX products in the derivatives
platform. This is a lot more complicated because you’ve got margin financing,
you have to deal with risk mitigation on the downside.”
Sebastian Widmann, Head of Strategy,Komainu, Source: LinkedIn
The
collaboration between OKX, CoinShares, and Komainu involves the development of a
standardized legal agreement, facilitating its adoption by multiple
counterparties. Sebastian Widmann, Head of Strategy at Komainu, highlighted the
effort to establish standards in the marketplace as more institutional players
enter the cryptocurrency space.
“We
are trying to bring standards into the marketplace as more firms enter,
especially institutional players who are accustomed to having custody and exchange
segregated,” Widmann stated, emphasizing of creating a framework for the
landscape.
Our innovative collaboration with @CoinSharesCo and @KomainuHQ empowers institutional investors to trade on #OKX while crypto is held by Komainu, solving the counterparty risk challenge & accelerating institutional adoption.
Learn more: https://t.co/bLAN1vDBTn pic.twitter.com/ay4hr470yj
— OKX (@okx) November 15, 2023
OKX’s Financial Report: $11.2 Billion in Cryptocurrency
Holdings
In September, OKX
released its eleventh consecutive monthly Proof of Reserves (PoR) report,
revealing holdings of $11.2 billion in assets like Bitcoin (BTC), Ethereum
(ETH), and Tether (USDT), Finance
Magnates reported. The report covers 22 digital assets, maintaining a
reserve ratio exceeding 100% for 11 months….
