Singapore-based cryptocurrency exchange Bybit is partnering with Copper.co to offer custodial services on cryptocurrencies for institutional customers.
Bybit expects to have the infrastructure enabling digital wallet safekeeping services available to its institutional clients before the end of Q1 2023. The agreement with Copper enables Bybit’s customers to deploy capital and trade immediately, while maintaining their assets off-exchange. The infrastructure reduces the counterparty risks allowing investment managers to trade through a dedicated and whitelisted custodian.
Copper’s ClearLoop technology also enables Bybit clients to increase allocations, mitigate counterparty risk, and optimize capital efficiency. To move digital assets out of a Copper wallet, the system requires multiple private key holders to approve transactions, which removes the inherent risk associated with keys creation and management. The risks have been demonstrated in the recent past as many crypto wallets and exchanges have been hacked, and customer data has been compromised.
“Our aim is to ensure maximum trust and flexibility for our clients, and provide the reassurance institutions and sophisticated investors demand and expect. This partnership with Copper, is a perfect example of how we continue to listen to our customers, care about their concerns, improve our services and partnerships to provide even higher levels of excellence and commitment,” said Ben Zhou, co-founder and CEO at Bybit.
Dmitry Tokarev, CEO at Copper, added: “Recent events demonstrate that crypto market structure needs to evolve to mirror traditional finance and a key element of this is off-exchange settlement. We’re excited to join forces with Bybit, who share our commitment to asset security, user experience and to setting higher standards for the crypto industry to reach its full growth potential.”
Copper’s solution appeals particularly to investors who require exposure to the digital asset without necessarily wanting to be fully exposed to the risks associated, such as hacking attacks or management of access keys.
One of the unique aspects of Copper’s business is its method of moving digital assets between cold storage and exchange accounts. Over 500 institutions, including Boston-based bank State Street Corp., already custody their cryptoassets with London-based Copper.co, which supports circa 450 different tokens.
Bybit said it its alliance with Copper.co anticipates rising demand for a variety of asset custody and custodial service options to satisfy an increasingly demanding clientele, and signals a renewed focus on higher net worth individuals and institutional clients.