In order to enable trading on an expanding list of significant exchanges without requiring customers’ funds to leave the safe haven of cold storage, cryptocurrency safekeeping companies BitGo and Copper are merging their individual in-custody settlement networks.Exchanges like Bybit, OKX, Powertrade, Bitget, Gate.io, Deribit, BIT, Bitfinex, and Bitstamp will be accessible to customers following the integration of qualified custodian BitGo’s Go Network with Copper’s well-liked ClearLoop system.
“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.”
In light of the demise of companies such as FTX, it makes perfect sense to consolidate the custody space in order to give businesses and organizations access to off-exchange cryptocurrency trading straight from cold storage.The only things lacking are controlled custody, scalability, and network effect.It might also be more effective for transactions with fewer interfaces with different custodians.The two businesses mesh well together.The German financial watchdog BaFin has granted BitGo, a licensed custodian in the United States, a crypto custody license.With an eye toward 2020, Copper developed its ClearLoop settlement network, which serves dozens of institutional clients, and terminated its enterprise custody business earlier this year.
According to Ballensweig, the expansion of the companies’ present off-exchange settlement networks is now targeted at non-US users, but an American rollout is planned down the road.
“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.”