Coinbase Custody Selected as the Primary Custodian for FTX Crypto Derivatives Exchange
Coinbase Custody International has been selected as the primary custodian of FTX crypto derivatives exchange as per a medium post on May 21. FTX joins the Coinbase Custody diverse client portfolio which includes exchanges, hedge funds, endowments, and brokerages.
As the primary custodian, Coinbase Custody will be tasked with the storage of FTX's native ERC-20 token, $FTT. The blog has since highlighted that a massive transfer of these digital assets to Coinbase Custody is set to take place over the coming days. Therefore, crypto volume watchers should not be alarmed as Coinbase will be controlling and monitoring the transfers closely.
The Value Proposition by Coinbase Custody
Recent years in crypto have seen custodians pop up in a bid to provide regulated and verified services. Some popular industry names include BitGo and Coinbase Custody, which is the largest globally as of press date. Notably, the firm was already providing custodial services to Polychain Capital, Grayscale Investments, and a16z crypto.
What then is the underlying value of having a verified and regulated crypto custodian? Coinbase for instance prides in its ecosystem security, seamlessness, and compliance; all these play a vital role in crypto trading, storage, and transfer. Furthermore, the platform's participants enjoy more liquidity as a result of Coinbase Pro API features. They are able to access the Coinbase OTC global desk while leveraging the insured storage services.
Coinbase and FTX Prospects
Both Coinbase and FTX have been expanding their operations within the crypto market. Coinbase Custody recently launched a European subsidiary based in Dublin, Ireland; this entity was pioneered to offer custodial services based on the existing core business. It is also the first crypto custodian to receive SOC 1 and SOC 2 evaluations. The California based firm got these reports from Grant Thorton and can now prove it complies with most of the accounting reporting stands.
FTX on the other hand added oil futures in April within its portfolio. This came at a time when the market had plummeted significantly hence creating more opportunities for futures to thrive in speculation of post-COVID. Also, the exchange was set to expand its footprint into the U.S market in May as it looks to diversify from its Asian dominated clientele. With just a year of existence, FTX has managed to record over $720 million in traded volume within a span of 24 hours.