In a significant move for cryptocurrency trading security, BitGo and Copper have partnered with Deribit to offer off-exchange settlement services. This development marks a crucial step in reducing counterparty risks in crypto trading.
Enhanced Security Through Off-Exchange Settlement
The partnership enables traders to keep their assets in qualified custody with BitGo Trust while trading on Deribit. The integration uses Copper’s ClearLoop settlement system and the Go Network for automatic settlements. This setup significantly reduces the risks of keeping assets on exchanges.
How The New Settlement System Works
The system introduces delivery versus payment (DvP) functionality. Traders can now execute atomic swaps between BitGo clients instantly. The process doesn’t require on-chain transactions, making it both efficient and cost-effective.
Assets remain in cold storage under BitGo’s custody. The system only moves required assets during settlement periods. This approach maintains security while ensuring smooth trading operations.
Market Impact and Trading Benefits
This development addresses key concerns in the post-FTX trading environment. Traders gain:
- Enhanced asset security through qualified custody
- Reduced counterparty risk
- Fee-free settlements
- Faster transaction processing
- Improved trading efficiency
Future Implications
The partnership between BitGo and Copper signals a shift toward more secure trading infrastructure. It represents a bridge between traditional finance security standards and crypto trading innovation. The model could become a standard for other exchanges.
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Tags: Cryptocurrency Custody, Trading Security, DeFi Infrastructure, BitGo, Deribit
Source: CoinDesk