BitGo, the leader in digital asset financial services, today announced
its off-chain Clearing and Settlement Service for clients of qualified
custodian BitGo Trust Company. Assets never need to leave custody, and,
with BitGo Trust as the custodian for both sides of the trade,
counterparty risk is minimized. Clearing and settlement is fast,
compliant, and secure.
In the current market structure for digital assets, institutional
investors are subject to:
Counterparty risk: One party must act first and rely on the
counterparty’s good faith.
Inefficient capital allocation: In order to trade on multiple
exchanges, institutional investors need to park assets at each
exchange in advance, thus breaking up their balance sheet.
Compliance infringement: Settlement currently requires that
funds need to leave the qualified custodian in order to settle trades.
Security risk: In order to trade and settle, assets must be
moved out of cold storage.
BitGo’s Clearing and Settlement Service was designed to solve these
critical issues. The service is offered to OTC desks, single dealer
platforms, exchanges, asset managers, and broker-dealers. All
participants custody their digital assets with BitGo Trust Company. As a
result of using a common custodian, participants will be able to choose
which partners to clear and settle with, and check their trading limits
“Until now, in a digital asset trade, one party needed to assume all of
the risk and act on the counterparty’s good faith, and this doesn’t
really work for institutional investors,” said Mike Belshe, CEO, BitGo.
“We are bringing to market a riskless, efficient, and compliant digital
asset clearing and settlement, and what makes this service possible is
BitGo Trust’s strong client base.”
With BitGo’s Clearing and Settlement Service, assets remain in cold
storage at all times. Trades are settled off-chain. Upon withdrawal,
they are reconciled on-chain. Client benefits include:
- No counterparty risk: Funds are locked during settlement.
Efficient capital allocation: Virtual journal swaps facilitate
trading on multiple exchanges without breaking up the balance sheet;
instant settlement also becomes possible.
Regulatory compliance: Assets are held with qualified custodian
BitGo Trust Company.
- Reduced market risk: Trades are settled off-chain.
Institutional-grade security: Multi-signature security,
multi-user policy controls, and advanced security configurations to
meet the most rigorous industry requirements.
For more information, contact email@example.com.
BitGo is the leader in digital asset financial services, providing
institutional investors with security, custody, and liquidity solutions.
BitGo is the world’s largest processor of on-chain bitcoin transactions,
processing 15% of all global Bitcoin transactions, and $15 billion per
month across all cryptocurrencies. The company supports over 100 coins
and tokens, and has over $2 billion in assets in wallet and custody.
BitGo’s customer base includes the world’s largest cryptocurrency
exchanges and spans more than 50 countries. In 2018, it launched BitGo
Trust Company, the first qualified custodian purpose-built for storing
digital assets. BitGo is backed by Craft Ventures, Digital Currency
Group, DRW, Galaxy Digital Ventures, Goldman Sachs, Redpoint Ventures,
and Valor Equity Partners.