OKX Becomes Inaugural User of Komainu Connect, a Regulated Settlement and Custody System for Institutional Clients
OKX, the second-largest cryptocurrency exchange globally in terms of trading volume, has partnered with digital asset storage firm Komainu. This collaboration enables institutional users to securely store their cryptocurrencies within the custodial services provided by Komainu, which is backed by Nomura.
Importantly, these institutional clients can simultaneously utilize the stored funds for trading purposes on the OKX exchange.
This partnership showcases how vertically integrated cryptocurrency exchanges are adopting practices similar to traditional finance by leveraging third-party custodians to separate operations. This approach aims to mitigate the risk of experiencing a situation similar to the collapse witnessed with FTX, emphasizing the importance of maintaining robust security measures and ensuring the protection of user funds.
OKX Becomes Inaugural User of Komainu Connect, a Regulated Settlement and Custody System for Institutional Customers, Providing 24/7 Trading with Cold Storage, MPC, and HSMs
According to Lennix Lai, the Chief Commercial Officer of OKX, when funds are deposited into a Komainu custody wallet, they are subsequently transferred to a Komainu collateral wallet. From there, they are linked to an OKX account. This arrangement enables the OKX account to reflect the same balance and facilitates seamless trading across the exchange’s extensive range of over 700 spot and derivatives markets.
Sebastian Widmann, the Head of Strategy at Komainu, clarified that the Komainu Connect collateral wallet, which OKX has access to, is connected to an institutional-grade tri-party account change agreement. This arrangement ensures transparency and accountability, providing a robust framework for secure management of assets.
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In an interview, Sebastian Widmann explained that a tri-party legal agreement is in place involving Komainu as the custodian, OKX as the liquidity venue and provider, and Komainu’s client as the client of OKX. This arrangement enables Komainu’s client to trade directly on the exchange, with Komainu handling the necessary settlement requirements on their behalf.
While OKX did not disclose specific details regarding the amount of assets under custody that would be transferred to Komainu, Lennix Lai mentioned that the transfer was “significant.” It is anticipated that the volume of assets will increase over time as both companies continue to enhance their institutional product offerings.
According to Lennix Lai, OKX’s standpoint is centered around providing users with a range of solutions for their custody needs. The exchange aims to offer a diverse selection of options, including on-exchange, off-exchange, and third-party balance mirror custody solutions. This approach ensures that users have a variety of choices available to them, promoting flexibility and catering to their individual preferences.
Established in 2020, Komainu emerged as a joint venture between leading entities in the industry, namely Nomura, digital asset manager CoinShares, and digital asset security company Ledger. The company operates under regulation in Jersey and Dubai and maintains office locations in London, Dublin, and Singapore.
Important: This article is intended solely for informational purposes. It should not be considered or relied upon as legal, tax, investment, financial, or any other form of advice.
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