Zodia Custody, an institution-first digital asset custodian by Standard Chartered in association with Northern Trust, and LMAX Digital, the regulated institutional crypto currency exchange operated by LMAX Group, have partnered to deliver institutional-grade trading infrastructure and custody services for CoinShares.
CoinShares will benefit from a fully segregated custodian solution by leveraging Interchange, the off-exchange settlement product from Zodia Custody, and connectivity to LMAX Digital, a regulated exchange venue which operates with best-of-breed security, compliance, KYC and anti-money laundering policies and procedures.
“CoinShares’ DNA promotes enhanced security and transparency through collaboration with regulated market players. This joint effort with Zodia Custody and LMAX Digital is aligned with our long-term strategy. We are committed to shape a reference standard for digital asset management. This underscores the importance of our duty of care for our stakeholders. We are expecting the rest of the industry to follow through,” said Jean-Marie Mognetti, CEO, CoinShares.
The collaboration between three institutional participants in the digital assets ecosystem comes at a time when the separation of exchange execution from custody, clearing and settlement functions is at the forefront of customer demands, as investors look to reduce concentration risk and implement more robust measurements to maintain security of assets.
As the pace of tokenisation gathers momentum and digital assets increasingly converge with traditional capital markets, so demand for regulated trading infrastructure and efficient price discovery within the industry grows.
As Europe’s premier Alternative Asset Manager specialising in digital assets, the move is part of CoinShares’ mission to provide access to a trusted, registered, and best-in-class product suite for all investors.
The collaboration to implement Interchange also reinforces CoinShares’ advocacy for stronger digital asset regulation, particularly in providing products that adhere to both existing regulations and similar regulatory best practices in traditional financial markets.
Zodia’s Interchange provides independent effective safeguarding of digital assets whilst reducing the counterparty risk exposure for CoinShares, enabling the firm to retain full control of its assets and complete protection through settlement obligations.
The collaboration with LMAX Digital and CoinShares marks the start of an upcoming period of growth for Zodia Custody’s Interchange product.
The digital asset custodian is currently working with several key strategic partners to implement Interchange, as part of a move from institutions and exchanges alike to mature digital asset infrastructure.
“The digital asset market needs to evolve. Investors are demanding greater assurance and rigour across the entire ecosystem. Interchange is our answer to how we can help the market respond to those concerns,” said Julian Sawyer, CEO, Zodia Custody.
“We have listened to the needs of institutional investors and have delivered a solution that combines digital asset-native technology with bank-level compliance and governance. Our collaboration with LMAX Digital and CoinShares is indicative of how the digital asset ecosystem can mature — namely, through collaboration to develop an infrastructure that is fit for purpose,” he added.
“In the wake of recent industry events, the segregation of crypto market services and effective corporate governance and controls is more important for institutions than ever. By bringing together our regulated exchange infrastructure with the regulated custodial services of Zodia Custody, we are able to offer a robust, institutional-grade solution that benefits clients such as CoinShares, whilst building a better market structure for all participants in the digital assets ecosystem. At LMAX Digital we are determined to remain at the very forefront of innovation and technological development to serve the rapidly evolving needs of our institutional clients,” added Jenna Wright, Managing Director, LMAX Digital.
