Algoz taps Zodia Custody to trade collateral without direct asset control

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As a seasoned crypto investor who has weathered numerous market storms and witnessed the fall of several giants, I am heartened by the strategic partnership between Zodia Custody and Algoz. Having lost funds to the cold hands of bankrupt crypto firms like Celsius, FTX, and BlockFi, I can’t help but feel a sense of relief as we inch closer towards a more secure future for our digital assets.

Through a partnership between Zodia Custody, backed by Standard Chartered, and trading firm Algoz, they aim to reduce counterparty risks that contributed to market instability in 2022.

In partnership with quantitative trading firm Algoz (backed by Standard Chartered), Zodia Custody – a well-known cryptocurrency custodian – has announced a strategic alliance. The goal is to tackle the counterparty risks that caused market turbulence in 2022, as stated in a press release distributed to crypto.news. This collaboration intends to strengthen liquidity and operational safety within the crypto industry, thereby reducing potential risks that brought about the collapse of prominent crypto companies, as explained in the announcement.

In their new alliance, Algoz clients can now utilize Zodia Custody’s isolated cold storage systems for their cryptocurrencies. This strategy significantly reduces the chances of asset freezes or losses, a vital security measure considering the ongoing challenges faced by companies such as Celsius, FTX, BlockFi, and others in the crypto industry.

As someone who has spent years working in the financial industry, I have seen firsthand how traditional custody services can be restrictive and opaque. That’s why I find the ability to withdraw funds from a wallet without a lock-in period to be a game-changer. Having been in situations where my clients needed immediate access to their funds, I understand the value of this feature. Additionally, the full transparency offered by blockchain technology is something I have long advocated for. Being able to view all wallets at any time provides a level of accountability and trust that is essential for building strong relationships with clients. Overall, these features make for a more efficient and client-friendly approach to custody services.

“Using our off-exchange settlement method called Interchange, along with Algoz’s Quant Pro, we provide institutions a higher level of efficiency and security for digital asset trading which is unparalleled anywhere else,” Julian Sawyer, CEO of Zodia Custody, explained.

As a researcher, I’m participating in a partnership that aligns with an industry-wide shift towards indirect cryptocurrency investment opportunities. This move comes after several high-profile bankruptcies that left many investors unable to access their funds. For Zodia Custody, this isn’t our first dance with such collaborations. Previously, we partnered with Deribit, a crypto exchange, to provide institutional clients with seamless access to the derivatives market liquidity, all while ensuring their assets are securely stored in cold wallets segregated for added safety.

The recent action signifies an increasing understanding among cryptocurrency stakeholders about the importance of strong risk mitigation strategies. Meanwhile, other market participants like Fireblocks have introduced innovative services aimed at equipping startups with blockchain technologies, such as non-custodial key management systems that allow users to exercise full control over their digital assets.

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2024-08-08 16:36