Cryptocurrency platform OKX chooses Standard Chartered bank for safekeeping of institutional investments
In a significant move for the crypto industry, OKX, the fourth largest cryptocurrency exchange, has chosen Standard Chartered as its third-party crypto custodian for institutional clients. This collaboration aims to provide advanced trading features and risk management tools, marking a potential milestone in the crypto space.
OKX, which has faced regulatory scrutiny in the past, has chosen Malta as its European base to comply with Europe's MiCAR regulations. The exchange has also withdrawn from some jurisdictions, including Nigeria, India, and Hong Kong. However, there is no public information indicating that Standard Chartered's crypto custody service has specifically faced regulatory scrutiny related to its collaboration with OKX.
Standard Chartered, a systemically important bank (G-SIB), has been actively expanding its digital asset services, including custody and trading offerings. The bank operates within regulated banking frameworks to address institutional clients' concerns about regulatory uncertainty and asset security.
Recently, the Securities and Futures Commission (SFC) in Hong Kong, where Standard Chartered is active, introduced strict new crypto custody rules. These regulations apply broadly to licensed custodians and virtual asset trading platforms, but there is no mention of regulatory actions or specific scrutiny targeting Standard Chartered or OKX.
The collaboration between OKX and Standard Chartered gives institutional clients the option of separating trading from custody, a practice that was widespread across the market at the time. This may be the first time that a systemically important bank has directly provided crypto custody for a major crypto exchange.
Changpeng Zhao, the founder of Binance, was previously the CTO of OKX before he launched his own exchange. OKX's institutional service already provides OKX custody, and the exchange has chosen the Seychelles as its global headquarters.
Standard Chartered, with its extensive global banking expertise and unwavering commitment to security, aligns well with OKX's objective to provide exceptional crypto services. The collaboration is expected to enhance institutional engagement in digital assets, as OKX believes.
One person commented that OKX managed to "hang around long enough to bring the grown-ups in." Notably, OKX does not serve the United States. Previously, OKX had Maltese headquarters, after moving from its first base in Beijing.
Standard Chartered has also founded a standalone crypto custody firm, Zodia Custody, in collaboration with Northern Trust. Japan's SBI and Australia's NAB are investors in Zodia Custody, further expanding Standard Chartered's footprint in the digital asset space.
In the 2018/2019 period, OKX faced allegations of lax verification requirements and wash trading. However, with the partnership with Standard Chartered, the exchange is taking steps towards enhancing its regulatory compliance and security measures.
- OKX, a crypto exchange that has chosen Malta as its European base to comply with Europe's MiCAR regulations, has partnered with Standard Chartered, a systemically important bank, for advanced trading features and risk management tools.
- Standard Chartered, with its extensive global banking expertise and unwavering commitment to security, aligns well with OKX's objective to provide exceptional crypto services, potentially marking a first for a systemically important bank to directly provide crypto custody for a major crypto exchange.
- Standard Chartered, which operates within regulated banking frameworks and has founded a standalone crypto custody firm, Zodia Custody, aims to address institutional clients' concerns about regulatory uncertainty and asset security.
- The collaboration between OKX and Standard Chartered is expected to enhance institutional engagement in digital assets, as OKX believes, and may influence other finance institutions to develop and offer fintech solutions in the banking-and-insurance and fintech sectors using technology.
