CoinShares and Komainu Join Forces with OKX in Derivatives Trading

<p>OKX
has expanded its partnership with the asset manager CoinShares and the custody joint
venture Komainu to offer derivatives trading with a feature that mitigates counterparty risk associated with assets held on the exchange.</p><p>Navigating
Off-Exchange Complexities</p><p>The
initiative aims at securing trading practices within the cryptocurrency space,
particularly in light of the significant events surrounding FTX last year. In response,
several industry players have sought ways to facilitate off-exchange trading
and settlements within the confines of custody setups.</p><p>While
off-exchange settlement is relatively straightforward for spot markets,
derivatives trading introduces additional complexities. Lewis Fellas, the Head of
Hedge Fund Solutions at CoinShares, emphasized the significance of providing a
similar secure arrangement for derivatives. </p><p>He
explained: "We've taken a collateral mirroring agreement and embedded that
so we can trade the full suite of <a href="https://www.financemagnates.com/tag/okx/">OKX</a> products in the derivatives
platform. This is a lot more complicated because you've got margin financing,
you have to deal with risk mitigation on the downside."</p><p>The
collaboration between OKX, <a href="https://www.financemagnates.com/tag/coinshares/">CoinShares</a>, and Komainu involves the development of a
standardized legal agreement, facilitating its adoption by multiple
counterparties. Sebastian Widmann, the Head of Strategy at Komainu, highlighted the
effort to establish standards in the marketplace as more institutional players
enter the cryptocurrency space.</p><p>"We
are trying to bring standards into the marketplace as more firms enter,
especially institutional players who are accustomed to having custody and exchange
segregated," Widmann emphasized having a solid framework in the marketplace.</p><blockquote><p lang="en" dir="ltr">Our innovative collaboration with <a href="https://twitter.com/CoinSharesCo?ref_src=twsrc%5Etfw">@CoinSharesCo</a> and <a href="https://twitter.com/KomainuHQ?ref_src=twsrc%5Etfw">@KomainuHQ</a> empowers institutional investors to trade on <a href="https://twitter.com/hashtag/OKX?src=hash&amp;ref_src=twsrc%5Etfw">#OKX</a> while crypto is held by Komainu, solving the counterparty risk challenge &amp; accelerating institutional adoption. Learn more: <a href="https://t.co/bLAN1vDBTn">https://t.co/bLAN1vDBTn</a> <a href="https://t.co/ay4hr470yj">pic.twitter.com/ay4hr470yj</a></p>— OKX (@okx) <a href="https://twitter.com/okx/status/1724700033998635051?ref_src=twsrc%5Etfw">November 15, 2023</a></blockquote><p>OKX's Financial Report: $11.2 Billion in Cryptocurrency
Holdings</p><p>In September, <a href="https://www.financemagnates.com/cryptocurrency/okx-reserve-assets-increase-by-800-million-since-august/">OKX
released its eleventh consecutive monthly Proof of Reserves (PoR) report</a>,
revealing holdings of $11.2 billion in assets like Bitcoin (BTC), Ethereum
(ETH), and Tether (USDT), <a href="https://www.financemagnates.com">Finance
Magnates</a> reported. The report covers 22 digital assets, maintaining a
reserve ratio exceeding 100% for 11 months. </p><p>Notably, BTC, ETH, and USDT have
current reserve ratios of 102%, 103%, and 102%, respectively. The reserves
increased by $800 million since August but slightly decreased compared to July.
OKX, lauded as the "gold standard" by an industry expert, Nic Carter, who aims to enhance transparency in the cryptocurrency sector through regular PoR
reports.</p>

This article was written by Tareq Sikder at www.financemagnates.com.