Institutional custody and settlemet platform Koine announced today that it has been awarded in-principle approval (IPA) to provide custody in relation to virtual assets in the Abu Dhabi Global Market (ADGM). The IPA was granted by the Financial Services Regulatory Authority (FSRA) of ADGM.
With a growing demand for institutional investment in virtual assets and the emerging growth of institutional investors in digital securities, Koine’s regulated services will meet the needs of both Koine customers, as well as the broader digital asset community, according to the firm’s statement.
Koine’s post-trade solution was created in order to provide institutional custody, settlement and related cash management service for the new generation of digitised assets. Critically eliminating counter-party, credit and insolvency risks in a compliant framework with a strong governance environment. It also allows institutional capital the ability to invest in digital assets without any change to conventional fund mandates.
The design that Koine utilises, allows for any potential failure of an exchange/venue leaving client assets fully intact and available for use. The Koine platform allows for assets and fiat currency to be moved in sub-second timeframes between market venues allowing for settlement in real-time using Delivery vs. Payment (DvP) and at fixed prices which are known in advance. Humans intervention is removed from the standard post-trade process reducing security risks.
Additionally, Koine ensure that the average value of funds held in hot wallets is nil. Value at Risk is properly insured. The platform is also suitable for market makers and algorithmic traders.
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Attracting institutional capital into the digital asset market
“The Koine model has always been one built upon the fundamental importance of good governance. This is the only way to attract institutional capital into the digital asset market, unlocking the huge, industry wide benefits that come with it. Delivering best practice and regulatory compliance for our institutional clients is something we take very seriously. Not only does this latest In-Principal Approval from the Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM) further strengthen Koine’s global footprint, but also serves to reaffirm our belief in robust regulation”, CEO and chairman at Koine, Hugh L. Hughes said.
“We look forward to future constructive dialogue with regulators and institutions in the UAE and around the world, in line with our focus of putting the client’s needs for regulatory oversight at front of mind. Following this further vote of confidence in our model, we are sure this will give our clients even greater reassurance when looking to move into one of the most vibrant sectors of the financial ecosystem,” he added.
Hughes was formerly CEO at Société Générale Securities and co-founder of Fixnetix, the market data and electronic trading platform later bought by DXC Technology.
“I am extremely excited to be returning to Abu Dhabi with Koine, to build out this key financial infrastructure that can support not just those first virtual assets but all asset classes as they move to tokenised/blockchain technology. Koine begins to answer the question “How to mitigate the geo-political risks of the current financial infrastructure” and allows for greater control and visibility of assets by their true owners and we look forward to playing a role in Abu Dhabi’s great vision for 2030”, said Dominic Longman, CEO at Koine, Middle East.
Abdulla Al Mansoori, chairman designate at Koine, Middle East stated that the in-principle approval (IPA) from the Abu Dhabi Global Market is an important milestone in Koine’s efforts to be a leading enabler of the digitally-enabled market infrastructure and rapidly growing digital transformation process in the region.
“Our capital market expertise, innovation and deep understanding of customer needs places us in a unique position to be the premier provider of custody and settlement services for the institutional market participants seeking to take advantage of the growing digital assets revolution,” he stated.