Cryptocurrency banking firm Sygnum has announced a strategic partnership with crypto derivatives exchange Deribit, integrating its off-exchange custody platform, Sygnum Protect. This move aims to enhance institutional security and streamline trading operations for institutional clients.
Strengthening Institutional-Grade Custody
On March 5, Sygnum unveiled the expansion of Sygnum Protect, which now includes Deribit, one of the world’s largest crypto derivatives exchanges. This integration enables institutional traders to securely store their assets in Sygnum’s regulated custody solution while gaining full access to Deribit’s trading infrastructure and liquidity pools.
“This integration provides institutional traders with both the capabilities and security assurances they require to trade any of Deribit’s leading products comfortably,” said Deribit CEO Luuk Strijers.
Fireblocks Powers Secure Off-Exchange Trading
Deribit’s adoption of Sygnum Protect is backed by Fireblocks, a leading crypto infrastructure provider. Fireblocks’ Off Exchange solution allows institutions to mirror their assets held in Sygnum’s custody to Deribit, ensuring seamless transactions without transferring assets directly to the exchange.
According to Fireblocks CEO Michael Shaulov, the partnership demonstrates the power of its Off Exchange solution, allowing exchanges and custodians to leverage standardized integration, reducing the need for custom development. This accelerates institutional adoption while ensuring assets remain securely held in regulated bank custody.
Reducing Counterparty Risk & Enhancing Cybersecurity
The integration of Sygnum Protect with Deribit significantly mitigates counterparty risk by allowing institutional traders to execute trades without pre-funding the exchange. This added layer of security protects against sophisticated cyber threats, a growing concern in the crypto market.
Fireblocks Network’s Vice President of Business Development, Richard Astle, confirmed that Deribit’s trading assets are held in a Sygnum collateral account, providing secure settlement verification between the custodian and exchange.
Growing Adoption of Fireblocks’ Off Exchange Solution
Fireblocks launched its Off Exchange solution in November 2023 to facilitate secure trading on centralized exchanges through on-chain multiparty computation (MPC) wallets. Initially integrated with Deribit, the solution has since expanded to HTX, ByBit, OKX, Gate.io, Bitget, and other major exchanges.
Also Read: Haven1 Secures $4.6m in Private Round, Backed by Industry Giants
As institutional participation in the crypto space continues to grow, solutions like Sygnum Protect and Fireblocks’ Off Exchange platform play a vital role in enhancing security, liquidity, and risk management for high-volume traders.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
About The Author
