Algoz taps Zodia Custody to trade collateral without direct asset control

Standard Chartered-backed crypto custodian Zodia Custody has teamed up with trading firm Algoz to mitigate counterparty risks that are causing market turbulence in 2022.

Zodia Custody, a crypto custodian backed by Standard Chartered, has announced a partnership agreement with Algoz, a quantitative trading firm, to address counterparty risks that have caused significant market disruptions in 2022. According to a press release shared with crypto.news, the collaboration aims to increase liquidity and operational security in the crypto space and help mitigate risks that have previously led to the collapse of major crypto companies.

Under the new partnership, Algoz customers will be able to store their crypto in Zodia Custody’s dedicated cold storage solutions, an approach that minimizes the risk of asset freezes or losses, an important safety measure in an industry still reeling from the collapses of companies like Celsius, FTX, and BlockFi.

The custodian notes that unlike standard custodian services, funds held in their wallets can be withdrawn “without a lock-up period.” Institutions will benefit from the full transparency provided by the blockchain, ensuring that “all wallets are viewable at any time.”

“By leveraging our decentralized settlement solution Interchange and Algoz’s Quant Pro, we are providing institutions with greater efficiency and better security when trading digital assets than can be found anywhere else,” said Julian Sawyer, CEO of Zodia Custody.

The collaboration is part of a broader industry trend toward indirect crypto exposure following high-profile bankruptcies that have left many investors without funds. This isn’t the first collaboration of its kind for Zodia Custody, as it has previously partnered with crypto exchange Deribit to offer institutional clients access to derivatives market liquidity while safely storing their assets in segregated cold wallets.

The latest move reflects a growing recognition of the need for robust risk management solutions in the crypto space. Other players in the sector, such as Fireblocks, have similarly introduced new offerings to empower startups with blockchain-based tools, including custody-free key management systems that give users direct control over their digital assets.