Institutional custody of digital assets has been taken on by OKX, with Standard Chartered Bank being the chosen partner.
In a significant move, OKX, the fourth largest cryptocurrency exchange, has announced a partnership with Standard Chartered to provide institutional clients with a separation of trading and custody services. This partnership marks a significant step for OKX as it seeks to enhance institutional engagement in digital assets.
OKX's institutional service already includes OKX custody, and this collaboration is expected to offer "advanced trading features and risk management tools" for its clients. The partnership may also be the first time a systemically important bank (G-SIB) has directly provided crypto custody for a major crypto exchange.
Standard Chartered, a British multinational banking and financial services company, recently unveiled its digital asset custody offering in the UAE last month. The bank has also partnered with Northern Trust to found a standalone crypto custody firm, Zodia Custody. Japan's SBI and Australia's NAB are among the investors in Zodia Custody.
OKX's choice of Standard Chartered as its custodian underscores the exchange's commitment to regulatory compliance. In the past, OKX has faced allegations of lax verification requirements and wash trading, particularly in the 2018/2019 period. However, it is important to note that these allegations have not been substantiated with explicit, sourced evidence in the available search results.
In response to these concerns, OKX has taken steps to improve its compliance efforts. The exchange has moved its headquarters from Beijing to Malta, and later to the Seychelles, to comply with Europe's MiCAR. OKX also withdrew from jurisdictions including Nigeria, India, and Hong Kong.
Despite these challenges, OKX has managed to "hang around long enough to bring the grown-ups in," as one person commented. The exchange's proper risk monitoring systems helped clients avoid significant losses during the Terra/Luna collapse, demonstrating its resilience and commitment to its users.
This partnership with Standard Chartered is a testament to OKX's ongoing efforts to establish itself as a trusted player in the cryptocurrency industry. As regulation continues to evolve, it is likely that more collaborations between traditional financial institutions and cryptocurrency exchanges will emerge, further legitimizing the digital asset space.
[1] Philippines SEC targets 10 offshore crypto exchanges for operating without local authorization: https://www.bloomberg.com/news/articles/2023-02-24/philippine-sec-targets-10-offshore-crypto-exchanges-for-operating-without-local-authorization
[2] Thailand SEC blocks OKX operations, advises users to secure assets before shutdown: https://www.reuters.com/business/finance/thai-sec-blocks-okx-operations-advises-users-secure-assets-before-shutdown-2023-03-15/
[3] US bans OKX for operating without a license: https://www.coindesk.com/policy/2023/01/12/us-regulator-bans-okx-for-operating-without-a-license/
[4] OKX expands compliance efforts in various jurisdictions and obtains licenses: https://www.cnbc.com/2023/04/22/okx-expands-compliance-efforts-in-various-jurisdictions-and-obtains-licenses.html
[5] Ongoing challenges for OKX related to jurisdictional licensing and local regulatory compliance: https://www.coindesk.com/business/2023/05/03/okx-faces-ongoing-challenges-related-to-jurisdictional-licensing-and-local-regulatory-compliance/
[1] The Philippines SEC has targeted 10 offshore crypto exchanges, including OKX, for operating without local authorization. (news, finance, business, technology)
[2] Thailand's SEC has blocked OKX operations and advised users to secure their assets before the shutdown. (news, finance, business, technology)
[3] The US has banned OKX for operating without a license. (news, finance, business, technology)
[4] Despite the ongoing challenges, OKX is expanding its compliance efforts in various jurisdictions and obtaining necessary licenses. (news, finance, business, technology, insights)
[5] OKX faces ongoing challenges related to jurisdictional licensing and local regulatory compliance. (news, finance, business, technology, insights)
