London-based cryptocurrency exchange Archax said on Tuesday that it would be launching its own custodial service for digital assets.
The new service will be provided in partnership with Unbound Tech, a cryptography firm that is backed by several notable investors, including Goldman Sachs and Citi Ventures.
“As a digital asset exchange targeted at institutions, it was vital that we could offer the very best and most secure solution for storing clients’ wallets and keys,” said Archax CEO Graham Rodford.
“Unlike most crypto venues, our custody service is totally segregated from the Archax exchange, and this, coupled with the unrivalled capabilities of Unbound’s technology, means we can offer exactly what institutions need.”
No cold storage with Archax?
Based in Israel, Unbound claims that it can protect sensitive data by ensuring that it is never stored in its complete form. The company argues that its technology even negates the need for cold-storage wallets for digital assets.
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“Our Digital Asset Protection Platform provides an innovative approach to protecting digital assets by creating and using fragmented private keys without ever unifying them, delivering both security and speed for a seamless customer experience,” said Yehuda Lindell, CEO of Unbound Tech.
“Archax, with its institutional focus and plans to bridge the traditional and digital asset worlds, is an ideal partner to expand our market reach.”
Founded by a number of former executives from hedge fund Omni Partners, Archax is yet to launch.
The company is applying to the Financial Conduct Authority to be recognized as a multilateral trading facility and a digital asset custodian.
Custodial services have been sorely lacking in the cryptocurrency markets. As well as providing trading services, exchanges often hold client funds but have, in many instances, failed to keep their clients’ funds safe.
An example of this also came on Tuesday when Polish exchange Bitmarket shut down amidst allegations that it had been hacked.