Custodian Services for Crypto Institutional Trading

Almost ten years passed before cryptocurrencies received institutional adoption. The world witnessed a boom in institutional crypto adoption in the 2020s when tech and finance giants started to allocate funds to crypto. However, it’s still far from a full adoption - many companies still remain on the sideline. Their doubts are caused by high volatility and insufficient regulations imposed on the crypto market. Another concern is connected with crypto safekeeping. In this article, we will discuss different aspects of crypto custody - institutional trading platform custodians and choosing the best option.

Crypto Custodian Integrated in an Institutional Trading Platform

The rise in crypto adoption by companies stimulated the development of institutional services. They can be found on institutional-grade exchanges, such as the Binance institutional crypto platform, WhiteBIT, or Kraken. These and other large exchanges offer special services aimed at efficient trading and investment, such as:

• Custody services
• Market making programs
• Access to markets
• Advanced tools for trading and analysis
• Market data
• Listing on crypto exchanges
• Lower commissions for market makers
• And other features.

Talking about custody, an institutional trading platform should combine robust security for clients’ assets with convenient trading capabilities. Thus, they solve the question of seamless integration with the trading platform and assets safekeeping. Using legit crypto platforms, investors receive sufficient liquidity for large trades along with their finds protection.

Choosing Institutional Crypto Custody: What to Consider?

Here are some aspects to look for when choosing the best custody service:

• Compliance with regulations. Custodians must adhere to the laws of regulations, including KYC and AML rules. Check out if a custodian has a license and meets fraud detection standards.
• Security. Choose a custodian that may offer strong security measures, such as cold storage, multiparty computation, hardware security modules, and multi-signature wallets. Also, the service should be regularly audited and meet standards such as data encryption, DDoS, and 24/7 monitoring to prevent data leaks.
• Asset segregation. Investors’ holdings and exchange assets should not be stored in the same place, otherwise, in the case the custodian goes bankrupt, investors’ assets will be at risk.
• Transparency - custodians must be transparent and allow for real-time overview. They should not hide information about security and audits.

Conclusion

There are plenty of custodians serving institutional crypto investors in the market. The main criteria for investors should be transparency, compliance, and security. Depending on the goal - daily trading or long-term holding, investors pick a platform with a set of tools that meet their requirements the best.

Cryptocurrency