Zodia, Coinshares and LMAX Digital Collaborate

Zodia Custody and LMAX Group have announced a collaboration to deliver institutional-grade trading infrastructure and custody services for European digital assets alternative asset manager Coinshares.

The collaboration reinforces the trend in the crypto space for the separation of exchange execution from custody, clearing and settlement functions as investors look to reduce concentration risk and implement more robust measurements to maintain security of assets.

CoinShares will benefit from a fully segregated custodian solution by leveraging Zodia’s Interchange, and connectivity to LMAX Digital, a regulated exchange venue. Zodia says Interchange provides independent effective safeguarding of digital assets whilst reducing the counterparty risk exposure for CoinShares, enabling the firm to retain full control of its assets and complete protection through settlement obligations.

As the pace of tokenisation gathers momentum and digital assets increasingly converge with traditional capital markets, the firms say demand for regulated trading infrastructure and efficient price discovery within the industry is growing.

“CoinShares’ DNA promotes enhanced security and transparency through collaboration with regulated market players,” says Jean-Marie Mognetti, CEO, CoinShares. “This joint effort with Zodia Custody and LMAX Digital is aligned with our long-term strategy. We are committed to shape a reference standard for digital asset management. This underscores the importance of our duty of care for our stakeholders. We are expecting the rest of the industry to follow through.”

Julian Sawyer, CEO, Zodia Custody, adds, “The digital asset market needs to evolve. Investors are demanding greater assurance and rigour across the entire ecosystem. Interchange is our answer to how we can help the market respond to those concerns. We have listened to the needs of institutional investors and have delivered a solution that combines digital asset-native technology with bank-level compliance and governance. Our collaboration with LMAX Digital and CoinShares is indicative of how the digital asset ecosystem can mature — namely, through collaboration to develop an infrastructure that is fit for purpose.”

Zodia says it is currently working with “several key strategic partners” to implement Interchange, as part of a move from institutions and exchanges alike to mature digital asset infrastructure.

“In the wake of recent industry events, the segregation of crypto market services and effective corporate governance and controls is more important for institutions than ever,” says Jenna Wright, managing director, LMAX Digital. “By bringing together our regulated exchange infrastructure with the regulated custodial services of Zodia Custody, we are able to offer a robust, institutional-grade solution that benefits clients such as CoinShares, whilst building a better market structure for all participants in the digital assets ecosystem. At LMAX Digital we are determined to remain at the very forefront of innovation and technological development to serve the rapidly evolving needs of our institutional clients.”