Crypto exchange OKX has recently announced an important partnership with Standard Chartered, positioning the banking powerhouse as a third-party crypto custodian for its institutional offerings. This move aims to enhance OKX’s already robust service offerings that cater to institutional investors.
Enhancing Institutional Offerings
The collaboration between OKX and Standard Chartered is designed to bolster the security and reliability of OKX’s custody solutions, which currently feature advanced trading capabilities and strong risk management tools. By integrating Standard Chartered’s banking expertise, OKX aims to provide more secure asset management options for institutional clients.
Attracting Institutional Investors
OKX’s strategy is to attract a larger pool of institutional investors who prioritize security in their asset management practices. “We selected Standard Chartered as an institutional custodian partner to enhance our offering and accelerate the integration of digital assets within the traditional financial ecosystem,” said Lennix Lai, Global Chief Commercial Officer at OKX. He emphasized that the partnership aligns with the firm’s goal to deliver exceptional crypto services while reinforcing trust among institutional clients regarding their digital asset management.
Insights from Recent Research
According to a study commissioned by OKX, 80% of both traditional and crypto hedge funds utilize third-party custodians to manage their digital assets. This statistic underscores the growing demand for secure custodial solutions in the crypto space, particularly among institutional investors. The timing of this partnership is particularly significant as Standard Chartered has recently launched its own crypto custody services in the United Arab Emirates (UAE), a region noted for its conducive regulatory environment for digital assets.
Standard Chartered’s New Custody Services
Standard Chartered has received a license from the Dubai Financial Services Authority (DFSA) to operate within the Dubai International Financial Centre (DIFC). The bank has already welcomed Brevan Howard Digital as its inaugural client for its new custodial service, which currently supports leading cryptocurrencies such as Bitcoin and Ethereum. This initiative is part of Standard Chartered’s broader ambitions to expand its digital asset services, with plans to incorporate additional cryptocurrencies and explore opportunities in other major financial centers.
OKX’s Regulatory Developments in Europe and Beyond
In addition to its partnership with Standard Chartered, OKX has made significant strides in regulatory compliance within Europe by designating Malta as its hub for Markets in Crypto-Assets (MiCA) compliance. The choice of Malta was influenced by the country’s strong regulatory framework and its favorable attitude towards blockchain technology and cryptocurrencies. OKX already has a workforce and established infrastructure in Malta, making it a strategic choice for the firm.
Expansion into Asia and Australia
OKX has also secured a Major Payment Institution (MPI) license in Singapore, enabling the exchange to offer a broad spectrum of financial services without being restricted by payment caps. As part of its global expansion strategy, OKX officially launched operations in Australia in May, facilitating spot trading for local users and derivatives trading for verified wholesale clients. Additionally, the firm introduced a crypto trading platform along with a Web3 wallet in the Netherlands in June.
Conclusion on VASP License Withdrawal
Despite these advancements, OKX made headlines when it withdrew its Virtual Asset Service Provider (VASP) license application in Hong Kong, marking the cessation of its services in that region. This decision might reflect the ever-evolving landscape of regulations affecting cryptocurrency exchanges worldwide as they navigate compliance and operational challenges in different jurisdictions.