Cryptocurrency safekeeping firms BITGO and Copper are combining their respective in-custody settlement networks, a way of accessing trading on a growing list of major exchanges without users’ assets leaving the secure confines of cold storage.
The joining up of qualified custodian BitGo’s Go Network with Copper’s popular ClearLoop system will give users access to exchanges such as Bybit, OKX, Powertrade, Bitget, Gate.io, Deribit, BIT, Bitfinex, and Bitstamp.
“We asked the question: do we want to win versus traditional finance?” said Matthew Ballensweig, who leads BitGo’s Go Network. “Can the crypto guys band together to create a true institutional-grade product that has real market scale, as opposed to waiting for Goldman or Fidelity to build out the custody and connectivity infrastructure for the next wave of capital waiting to come into this space.”
Consolidation on the custody front to provide firms and institutions with off-exchange trading of crypto directly from cold storage makes a lot of sense, especially following the collapse of firms like FTX. All that’s been lacking is the scale and network effect, combined with regulated custody. It’s also potentially more efficient for exchanges that have less in the way of integrations with multiple custodians.
It’s a nice fit for the two firms. BitGo, a qualified custodian in the U.S., recently announced it had acquired a crypto custody license from German financial regulator BaFin. Copper closed its enterprise custody business earlier this year to focus on its ClearLoop settlement network, which was launched in 2020 and caters to dozens of institutional firms.
The expansion of the firms’ existing off-exchange settlement networks is currently aimed at non-U.S. users, but the next step will be to roll it out in the U.S., Ballensweig explained in an interview.
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“As we add exchanges in the U.S. – for instance, we're working with Bitstamp, and we're talking to a host of other U.S.-based exchanges – our plan is to integrate those,” Ballensweig said. “So that means we can have basically two avenues: one for offshore, that kind of goes through Copper's ClearLoop API, and hits the non-U.S. exchanges, and then one avenue natively through BitGo that touches the US exchanges.”
Edited by Stephen Alpher.
