- OKX teams up with Komainu and CoinShares for institutional asset trading.
- CoinShares trades on OKX, while Komainu safeguards assets, mitigating counterparty risks.
- The collaboration establishes a legally robust mechanism, enhancing the reliability of institutional transactions.
In a strategic move aimed at fostering institutional adoption of digital assets, cryptocurrency exchange OKX has entered into a partnership with custody provider Komainu and asset manager CoinShares.
This collaboration, designed to facilitate round-the-clock trading of segregated assets, addresses a crucial concern for institutional traders—counterparty risks.
The partnership comes right on the heels of another OKX partnership with Polygon that saw OKX launch a ZK-powered L2 network built with Polygon CDK.
Mitigating counterparty risks with a traditional touch
In this innovative partnership, CoinShares will execute trades on the OKX exchange, while Komainu, functioning as a third-party custody provider, safeguards the collateral assets. The segregation of assets and the involvement of trusted custodians aim to mitigate counterparty risks, providing institutional traders with a level of assurance mirroring traditional financial market practices.
According to Sebastian Widmann, head of strategy at Komainu, this step is essential to attract institutions to adopt digital assets. By acting as independent, trusted, and regulated custodians for collateral assets, Komainu seeks to instil confidence in institutional clients throughout their trading lifecycle.
Lennix Lai, Chief Commercial Officer at OKX, emphasizes that while secure custody solutions, regulatory frameworks, and deepening exchange liquidity are in place, counterparty risk remains a significant hurdle for institutional traders. The collaboration aims to provide a legally robust mechanism for the mutual management of assets, demonstrating expertise in negotiating complex tripartite agreements covering collateral, security, and legal risks—critical aspects for institutional investors.
This partnership aligns with the ongoing trend in the crypto industry, focusing on enhancing infrastructure and risk management practices to attract traditional finance investors. As institutional interest continues to grow, initiatives like these contribute to creating a more reliable landscape for institutional transactions in the digital asset space.