Bybit, a cryptocurrency exchange, has partnered with Zodia Custody, a crypto custodian, to provide institutional clients with segregated custody and off-exchange settlement solutions. This partnership aims to reduce the risk of exposure and provide transparent fees to clients. Bybit’s institutional arm, which targets larger investors, will use Zodia to ensure that assets are kept separate and isolated from the exchange, minimizing the risk of co-mingling and the potential for hackers to access the funds.
The partnership allows institutional clients to trade on Bybit while keeping their assets with Zodia Custody, ensuring full segregation and elimination of co-mingling. This setup also eliminates the need for pre-funding exchange accounts, which minimizes exposure to exchange-side vulnerabilities and improves capital efficiency.
This partnership comes after Bybit experienced a security breach in February, where hackers stole around $1.46 billion worth of cryptocurrency. Although the exchange was able to reclaim some of the stolen funds, a significant portion remains untraceable. The new partnership aims to provide an additional layer of security for institutional clients, who are seeking to minimize their exposure to risk.
Bybit’s CEO, Ben Zhou, has stated that 88% of the stolen funds are still traceable, and the company is working to recover the remaining funds. The partnership with Zodia Custody is seen as a key step in reducing the risk of future security breaches and providing a more secure trading environment for institutional clients.
The partnership offers a solution for institutional investors who are hesitant to trade on exchanges due to security concerns. Bybit and Zodia Custody’s partnership will provide a safe and secure environment for institutional clients to trade and store their assets, with the added benefit of transparent fees and reduced risk exposure.