Tag Archives: Zodia Custody

TP ICAP to Launch Crypto Trading Platform with Fidelity and Standard Chartered

TP ICAP, a leading provider of market infrastructure, is to launch an innovative wholesale trading platform for cryptoassets, working in collaboration with Fidelity Digital AssetsSM, Zodia Custody and Flow Traders.

The new platform, which is subject to registration with the UK Financial Conduct Authority, will feature a wholesale electronic marketplace for spot cryptoasset trading, including Bitcoin and Ethereum, as well as providing connectivity and post-trade infrastructure into a network of digital assets custodians. 

TP ICAP is working with Fidelity Digital Assets and Zodia Custody, both leading crypto assets custodians, to ensure clients have a segregated and interoperable model for execution and settlement, a key requirement for clients entering this new asset class. The firms have collaborated to develop a new trading model where clients will be able to access liquidity at TP ICAP whilst their assets remain under custody at their digital asset custodian of choice, providing a level of security that institutional investors expect.  Fidelity Digital Assets and Zodia Custody will provide custodian services to the new platform.

TP ICAP launched its Digital Assets business in 2019, enabling clients to trade cryptoasset derivatives products; this new trading platform for the spot market significantly expands the firm’s footprint in this fast-growing area.

Simon Forster, Co-Head of Digital Assets at TP ICAP, said: “Client demand to trade spot cryptoassets is significant and growing, with interest coming from our traditional customer base across the different asset classes we operate in.  But to date many of our clients have been prevented from accessing cryptoasset markets due to current limitations in market infrastructure, with most execution venues requiring pre-funding and also acting as custodian. This poses challenges from a conflict of interest perspective and results in fragmented liquidity. Our partnership, and resultant new platform, is a natural evolution in market structure that will make digital assets, such as Bitcoin, more accessible for the wholesale market.”

TP ICAP has also partnered with Flow Traders, a leading global financial technology-enabled liquidity provider in financial products, historically specialised in Exchange Traded Products (ETPs), now expanding into other asset classes. Flow Traders has been providing liquidity to cryptoasset markets since 2016 and will be one of the initial liquidity providers on this new platform.

Michael Lie, Head of Digital Asset Trading at Flow Traders said “We are delighted to be partnering with TP ICAP as a liquidity provider on this new platform. As the #1 market maker in cryptocurrency ETPs, as well as being a leading spot OTC liquidity provider, we have seen first-hand the increase in institutional interest in cryptoassets. We have long been in favour of initiatives such as this that will make the crypto space more accessible for investors.”

The platform has already started to onboard clients and will launch to the market in the second half of the year, by which time TP ICAP expects to announce additional liquidity providers. TP ICAP is also working closely with a number of additional strategic custody partners and expects to expand its network of digital asset custodians as it establishes a new industry model for clearing and settlement.

The TP ICAP Digital Assets business is led by Duncan Trenholme and Simon Forster and operates from the firm’s offices in London, New York, and will soon expand into Asia. The trading platform, which will be launched in London, will be made available globally to customers across the TP ICAP Group as well as to new clients of the firm seeking market access to this new asset class.

Andrew Polydor, Global Head of Markets at TP ICAP, said: “This platform will provide our global client base with the trading infrastructure, connectivity, surveillance, and market standards they require as a minimum across traditional markets whilst also recognising the nuances of this new asset class. It leverages mature trading technology developed by our partners GMEX Technologies, to provide spot liquidity in digital assets as well as access to multiple custodians via a bespoke post-trade solution. These are key requirements for our institutional clients who want to be able to trade, invest and safely access this growing area of the market.”

Chris Tyrer, head of Fidelity Digital Assets in Europe, said: “Collaborating with industry leaders like TP ICAP to bring to market innovative solutions that strengthen the digital assets ecosystem is critical to enabling even more institutional participation. With this new infrastructure, we’re addressing one of the frictions in the investor experience that’s unique to this nascent asset class. Now, investors can more confidently execute trades knowing their assets remain still and secure in our custody.”

Maxime de Guillebon, Chief Executive Office of Zodia Custody said: “Zodia and TP ICAP share the same vision of the future of crypto asset investing. By combining liquidity with institutional-grade custody we will create an ecosystem that complements the expectations of institutional investors in terms of segregation of duties and asset safety. This infrastructure will enable operational efficiency and speed of transaction without compromising on security or reliability.”

Zodia Custody is a venture incubated by SC Ventures, the innovation arm of Standard Chartered.  Zodia combines the Banks’ expertise as trusted custodians with the agility of a fintech company to drive industry leadership and transformation.  Zodia is a cryptocurrency custodian serving institutional clients across the globe. Zodia is in the process of registering with the FCA under UK Money Laundering Regulations and expects to launch commercially in the second half of 2021.

Standard Chartered and Northern Trust partner to launch Zodia, a cryptocurrency custodian for institutional investors

SC Ventures, the innovation and ventures unit of Standard Chartered, and Northern Trust, a leading provider of asset servicing, have entered into an agreement to launch Zodia Custody, an institutional-grade custody solution for cryptocurrencies.

Cryptocurrencies already represent 0.3% of the world’s currency and bank deposits and are forecast to continue growing with a CAGR of 32% from 2019 to 2024[1]. While there is increasing interest from institutional investors, they account for only 9% of investments in cryptocurrencies at present.

Zodia is designed to enable institutions to invest in the emerging cryptocurrency assets that are transforming how financial markets operate, including transaction and settlement activities. Under the agreement, which is subject to registration with the UK Financial Conduct Authority (FCA), all applicable regulatory filings and customary closing conditions, Zodia is expected to begin operations in London in 2021.

Zodia combines the traditional custody principles and expertise of a bank with the agility of a fintech company to provide an infrastructure that meets the high standards and expectations of institutional investors through a platform that adapts to the changing needs of clients and the market.

At launch, pending regulatory approval, Zodia will provide custody services for the most-traded cryptocurrency assets – Bitcoin, Ethereum, followed by XRP, Litecoin, and Bitcoin Cash – which represent the majority of client demand and activity, accounting for approximately 80% of the total assets [equivalent to USD395B] traded on the top cryptocurrency exchanges.

Maxime De Guillebon, Chief Executive Officer of Zodia, said: “Zodia was established to address the need for a cryptocurrency custodian that truly understands custody. We combine the risk management, compliance, governance and security approach of a regulated financial institution with the cutting-edge innovation of crypto asset and key management technologies. By doing so, we enable operational efficiency and speed of transaction without compromising on security or reliability.”

Alex Manson of SC Ventures, said: “The launch of Zodia demonstrates our commitment to rewiring the DNA in banking. Drawing on Standard Chartered’s heritage of providing custody services to institutional clients for 160 years, Zodia’s mission is to be a ‘force for good’ by lifting industry standards for digital assets in a sustainable, safe and responsible way.”

Pete Cherecwich, President, Corporate & Institutional Services, Northern Trust, said, “The introduction of digital custody backed by the know-how and experience of global banks is a breakthrough in the evolution and support of institutional cryptocurrency markets. Zodia’s robust capabilities will make it possible for institutional asset owners, family offices and asset managers to invest in a range of cryptocurrencies as interest continues to grow in these emerging and innovative financial instruments.”

Zodia further establishes Standard Chartered and Northern Trust as leaders in the development of digital-asset infrastructure. Alongside its partnerships with blockchain service providers, Standard Chartered has invested in core technology provider Metaco and is collaborating with the Bank of Thailand and the Hong Kong Monetary Authority to explore distributed ledger interoperability for cross-border fund transfers.

Northern Trust has a record of focused investment in digital innovation, having launched the industry’s first deployment of blockchain technology for the private equity market in 2017. Working with key clients and regulators, Northern Trust continued to develop and implement additional capabilities on its blockchain and collaborated with Broadridge to make the technology available to all market participants. In 2020, Northern Trust and BondEvalue partnered to complete the first trade of a fractionalized blockchain-based bond, working in cooperation with the Monetary Authority of Singapore.

Zodia Custody is in the process of registering with the FCA under UK Money Laundering Regulations and will apply standards that are equivalent to the custody of traditional securities.