The crypto clearinghouse is partnering with OTC trading desks to remove the responsibility of crypto custody.
Israel-based cryptocurrency settlement solution provider, KeyTango, has partnered with GSR Markets, to enable over-the-counter (OTC) crypto desks to reduce counterparty risk and avoid the responsibility of cryptocurrency custody.
According to a report from THE BLOCK, KeyTango, and OTC firm GSR Markets recently piloted options trading. As of now, when trading crypto, investors have to deposit funds with OTC Desks and exchanges before they can execute a trade. However, in the pilot, the OTC desk didn’t receive the seller’s collateral in advance.
As an alternative, instead of depositing the funds with the OTC desk, the seller deposited their collateral in a digital wallet, which had three key shares. These keys were held by GSR, the seller, and an agreed-upon arbitrator.
With the current crypto trading model, when traders need to deposit funds with the OTC desks or exchanges, their funds become vulnerable to hacks, which plague the digital asset industry.
KeyTango looks to traditional asset trading
The approach between KeyTango and GSR Markets models that of traditional asset trading. This is because the security of funds when trading is usually handled by clearinghouses, which act as an intermediary between a buyer and seller, with their aim to ensure that the process from trade inception to settlement is smooth.
Similar to a Clearing House, KeyTango uses digital wallets where clients can deposit their funds, as an alternative to giving them to OTC desks and exchanges. According to the cryptocurrency news outlet, the trading desk and the client can use their key shares to co-sign a transaction.
These digital wallets are secured by multiparty computation (MPC). This allows two trading parties to co-sign transactions, which then release the funds from the wallets.
Speaking on the process to THE BLOCK, KeyTango CEO Dan Danay said: “Basically we use MPC to completely decouple running the logic layer in doing any kind of centralized crypto trading, and doing the actual settlement…”
“The comparison between MPC and Multi-signature is exactly like in custody. If you want to do this with multisig, you will be limited to the chains that actually support multisig contracts you can actually trust.”
Although KeyTango has recently piloted options trading with GSR, the company is looking to expand its partnerships. According to the company’s CEO, the firm has on-boarded multiple OTC desks and lending firms. The partnerships will be announced soon.
“We are excited to be involved in the advancement of this new technology. It not only reduces the counterparty risk prevalent in trading digital assets but also helps decentralize the trading process, which is key for the industry’s development,” added GSR co-founder Cris Gil.
Israel-based cryptocurrency settlement solution provider, KeyTango, has partnered with GSR Markets, to enable over-the-counter (OTC) crypto desks to reduce counterparty risk and avoid the responsibility of cryptocurrency custody.
According to a report from THE BLOCK, KeyTango, and OTC firm GSR Markets recently piloted options trading. As of now, when trading crypto, investors have to deposit funds with OTC Desks and exchanges before they can execute a trade. However, in the pilot, the OTC desk didn’t receive the seller’s collateral in advance.
As an alternative, instead of depositing the funds with the OTC desk, the seller deposited their collateral in a digital wallet, which had three key shares. These keys were held by GSR, the seller, and an agreed-upon arbitrator.
With the current crypto trading model, when traders need to deposit funds with the OTC desks or exchanges, their funds become vulnerable to hacks, which plague the digital asset industry.
KeyTango looks to traditional asset trading
The approach between KeyTango and GSR Markets models that of traditional asset trading. This is because the security of funds when trading is usually handled by clearinghouses, which act as an intermediary between a buyer and seller, with their aim to ensure that the process from trade inception to settlement is smooth.
Similar to a Clearing House, KeyTango uses digital wallets where clients can deposit their funds, as an alternative to giving them to OTC desks and exchanges. According to the cryptocurrency news outlet, the trading desk and the client can use their key shares to co-sign a transaction.
These digital wallets are secured by multiparty computation (MPC). This allows two trading parties to co-sign transactions, which then release the funds from the wallets.
Speaking on the process to THE BLOCK, KeyTango CEO Dan Danay said: “Basically we use MPC to completely decouple running the logic layer in doing any kind of centralized crypto trading, and doing the actual settlement…”
“The comparison between MPC and Multi-signature is exactly like in custody. If you want to do this with multisig, you will be limited to the chains that actually support multisig contracts you can actually trust.”
Although KeyTango has recently piloted options trading with GSR, the company is looking to expand its partnerships. According to the company’s CEO, the firm has on-boarded multiple OTC desks and lending firms. The partnerships will be announced soon.
“We are excited to be involved in the advancement of this new technology. It not only reduces the counterparty risk prevalent in trading digital assets but also helps decentralize the trading process, which is key for the industry’s development,” added GSR co-founder Cris Gil.
Strike's Expansion into Europe Accelerates Bitcoin Adoption
Network, Learn, Grow | FMAS:24
Network, Learn, Grow | FMAS:24
Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
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Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
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Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
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Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
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Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
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Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
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Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
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#fmas #fmas24 #fmevents #networking #finance #africa
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
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#fmas #fmas24 #fmevents #networking #finance #africa
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
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Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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