BitGo, a crypto custodian service provider based in the U.S, is expanding its market share with Indian crypto exchange, CoinDCX, as the new client. According to an announcement by CoinDCX, they will be leveraging BitGo's secure storage as well as partial insurance for the cryptocurrencies traded within its ecosystem.
The move is set to benefit both entities given the recent reversal on the provision of banking-based services to crypto-based firms in India. A decision by India's Supreme Court earlier in the year gave hope to the long-starved industry which had been denied banking services. BitGo's Chief Revenue Officer, Pete Najarian, noted that this formality presents an opportunity to move towards professionalism,
“With the recent uptick in trading volumes on Indian exchanges, the need of the hour is for professionalization in the form of fund security in the crypto market,”
BitGo's Custodial and Insurance Service
Najarian went on to further note that BitGo's involvement in the CoinDCX custodial operations will provide the exchange's users with added value and assurance. BitGo has in the past claimed to be responsible for processing over 20% of BTC transactions. Notably, the firm's insurance provision covers up to $100 million in value. They are able to achieve this via a group of insurers in the European Marketplace and Lloyd's of London.
CoinDCX will, therefore, have some of its traded funds insured under BitGo's provision. This includes those held on the platform's lending service, DCXLend.As for the secure crypto storage, BitGo will distribute the digital assets in segregated hot and cold wallets and omnibus.
BitGo has made some significant milestones in the recent past; the firm's current clientele includes popular crypto exchanges like LGO Markets and Bitstamp. Back in February, BitGo scaled its services to institutional-level crypto trading and rolled out a lending service in early March. In addition, they established two independent crypto custodians in Germany and Switzerland.
CoinDCX, on the other hand, is riding on India's crypto-friendly environment for exponential growth. The platform's trading volumes grew by 47% in Q1 with daily active users surging by 150%. Adding a lending service called Dcxlend as well as partnered with OKEx to offer leveraged futures in India. Sumit Gupta, the company's co-founder, and CEO, however, told Cointelegraph that financial institutions are still reluctant to fully supporting crypto ventures,
“Despite the Supreme Court's ruling, regulation of the cryptocurrency sector within India remains vague—with limited clarity as to what frameworks are likely to emerge in relation to emerging technologies.
This has led to a degree of continued hesitancy for traditional actors to engage with actors within the cryptocurrency and digital asset space.”