Standard Chartered’s crypto custodian, Zodia Custody, partners with Algoz to address counterparty risks that caused market volatility in 2022.
Zodia Custody, a crypto custodian that Standard Chartered sponsors, has announced a partnership agreement with Algoz, a quantitative trading firm, to mitigate counterparty risks responsible for substantial market disruptions in 2022.
According to a press release, the collaboration is intended to improve operational security and liquidity in the crypto space, thereby mitigating the risks that have previously resulted in the collapse of key crypto firms.
Algoz clients will have the opportunity to store their crypto in Zodia Custody’s segregated cold storage solutions due to the new partnership.
In an industry still suffering from the collapses of firms such as Celsius, FTX, and BlockFi, among others, this approach is a critical safeguard that reduces the risk of asset seizures or losses.
The custodian observes that, in contrast to conventional custody services, funds stored in its purses can be withdrawn “without a lock-in period.”
The complete transparency that blockchain provides will be advantageous to institutions, enabling them to view all wallets at any moment. Zodia Custody CEO Julian Sawyer said:
By leveraging our off-venue settlement solution, Interchange, and Algoz’s Quant Pro, we give institutions greater efficiency and better security in trading digital assets that simply cannot be found elsewhere”
The collaboration is a component of a broader industry trend toward indirect crypto exposure, which has emerged in response to the high-profile bankruptcies that have excluded numerous investors from their funds.
Zodia Custody has previously collaborated with the Deribit crypto exchange to provide institutional clients with access to derivatives market liquidity while maintaining their assets in segregated cold wallets.
This is not the company’s first such partnership. The most recent action indicates the increasing acknowledgment within the crypto sector of the necessity for effective risk management solutions.
Similarly, other industry participants, such as Fireblocks, have introduced new products to empower startups with blockchain-based tools.
These products include non-custodial key management systems that offer users direct control over their digital assets.
