Zodia Custody, a crypto custodian backed by Standard Chartered, has entered into a partnership with Algoz, a quantitative trading firm, to tackle counterparty risks that caused significant market disruptions in 2022. This collaboration aims to enhance liquidity and operational security in the cryptocurrency space, providing solutions to mitigate risks that previously led to the downfall of major crypto firms.

Under this new partnership, Algoz clients can store their cryptocurrencies in Zodia Custody’s segregated cold storage solutions. This minimizes the risks of asset freezes or losses, which is critical in an industry still recovering from the collapses of firms like Celsius, FTX, and BlockFi.

Unlike standard custody services, funds held in Zodia Custody wallets can be withdrawn “without a lock-in period.” Institutions will benefit from the full transparency afforded by blockchain technology, making “all wallets viewable at any time.”

“By leveraging our off-venue settlement solution, Interchange, and Algoz’s Quant Pro, we give institutions greater efficiency and better security in trading digital assets that simply cannot be found elsewhere,” said Zodia Custody CEO Julian Sawyer.

This partnership is part of a broader industry trend towards indirect crypto exposure, following high-profile bankruptcies that left many investors locked out of their funds. For Zodia Custody, this is not the first collaboration of this nature. The firm previously partnered with the Deribit crypto exchange to offer institutional clients access to derivatives market liquidity while keeping their assets securely in segregated cold wallets.

The move signifies a growing recognition within the cryptocurrency sector of the need for robust risk management solutions. Other industry players, such as Fireblocks, have introduced new offerings to empower startups with blockchain-based tools, including non-custodial key management systems that provide users with direct control over their digital assets.

For more updates on the latest developments in the cryptocurrency world, stay tuned to Global Crypto News.

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