[ad_1]
Cryptocurrency market maker Amber Group will serve its clientele of institutional traders with the help of BitGo Trust, the custody arm of the Palo Alto-based security firm.
BitGo’s status as a qualified custodian is expected to attract more high net worth investors to Amber from places like Hong Kong, Taiwan and Seoul, the companies said.
The Hong Kong-based market maker, which has an average daily trading volume of between $ 100 million and $ 200 million, builds on its existing business relationship with BitGo. (Amber Group’s suite of offerings, which includes Amber Pro and Amber App, has been using BitGo security technology since 2018.)
In February, Amber closed a $ 28 million funding round led by Paradigm and Pantera Capital and including Coinbase Ventures. BitGo Trust clients include Pantera, Bitstamp, Nexo, CoinJar, and others.
Read more: Crypto Finance startup Amber raises $ 28 million in Pantera-led Series A, Paradigm
Amber’s decision was partly influenced by BitGo’s $ 100 million in cold storage insurance coverage backed by Lloyd’s of London, BitGo’s Nick Carmi said.
“The insurance that comes with our fiduciary custody adds just another component of security and trust for customers – and that’s why they are with us,” Carmi, the custodian’s financial services manager, said in an interview. .
Asked about his reasoning on expanding the company’s custody partnerships, Amber Group CEO Michael Wu said via email that it was the “track record, shared insurance scheme and integration with [the BitGo] loan desk. “
Agile storage?
Some custodians claim that cold storage, which involves some degree of manual processing to get funds online, is not suitable for the kind of rapid turnaround that professional trading operations require.
BitGo’s Carmi said the inventory immediately needed for market making and high-frequency trading can be stored in hot or internet-connected wallets. “Whatever they’re not using stays in the cold room,” he added.
Wu was unable to comment on the exact breakdown of funds found in Amber’s cold wallets at any one time.
“Most of the funds are always used and moved for various trading, lending and other activities,” Wu said. “Our engagements with new custodial partners are driven by business demand as the company continues to grow.”
Read more: Record of $ 616 million in Wrapped Bitcoin minted in September
Amber also got a taste of BitGo’s wrapped bitcoin (WBTC), a tokenized version of bitcoin (BTC) ready for easy use on Ethereum’s various decentralized finance (DeFi) apps.
BitGo’s Carmi said WBTC naturally flows into the institutional custody industry as savvy investors seek yield.
“We are the only custodians and the only counterparty capable of minting WBTC,” he said, “and BitGo Trust is the custodian of the BTC that is being held for coinage.”
Wu could not comment on the volume of WBTC that Amber is trading. “We have only recently started trading WBTCs, mainly as a result of DeFi opportunities,” he said.
