Seychelles-based cryptocurrency exchange OKX has selected Standard Chartered as its third-party custodian for institutional clients, aiming to strengthen institutional participation in digital assets. Known for being the world’s fourth-largest crypto exchange, OKX is looking to leverage Standard Chartered’s custodial expertise, marking a significant move in aligning with a globally important bank (G-SIB) for digital asset custody. Standard Chartered recently launched its digital asset custody services in the UAE and operates its standalone firm, Zodia Custody, in collaboration with Northern Trust.
Enhanced Custody Services for Institutional Clients
This collaboration between OKX and Standard Chartered will allow institutional clients to separate trading from custody, a critical feature in the crypto landscape. OKX Chief Commercial Officer Lennix Lai noted that the partnership aligns with OKX’s mission to expand crypto’s role within the traditional financial system by offering advanced trading features and robust risk management tools. With Standard Chartered’s banking expertise, the exchange aims to deliver reliable crypto services, boosting confidence for institutional clients in managing their digital assets.
Standard Chartered’s Role in the Digital Asset Market
Standard Chartered’s entry into the crypto custody space via Zodia Custody—an initiative with Northern Trust that includes investors like Japan’s SBI and Australia’s NAB—positions it as a key player in institutional-grade digital asset security. Zodia Custody has grown with added stakeholders and continues to enhance crypto custody solutions, fostering innovation within the institutional crypto sector.
Risk Management and the Terra/Luna Collapse
OKX has emphasized its commitment to client protection, exemplified during the Terra/Luna crisis. The exchange’s risk monitoring systems detected instability in the Anchor Protocol and redeemed clients’ assets before Terra’s full collapse, minimizing losses. This proactive approach allowed OKX clients to secure nearly full returns on their investments, differentiating the platform’s risk strategies.
Regulatory Environment and Compliance
Though OKX has managed to avoid major controversies compared to other exchanges, it faces regulatory scrutiny due to its Seychelles headquarters, a choice that limits its reach to the U.S. market. OKX has also exited jurisdictions like Nigeria, India, and Hong Kong, an important region for Standard Chartered. Within Europe, OKX has established its headquarters in Malta to comply with the EU’s MiCAR regulations. This relocation follows its previous bases in Beijing and Malta and positions OKX for better alignment with European crypto standards.
Despite some historical issues around 2018 and 2019—including lax verification processes and alleged wash trading—OKX has since improved its operations to attract institutional partners like Standard Chartered. The partnership is seen as a sign of maturity in the digital asset space, where collaboration between established financial entities and crypto firms is increasingly necessary for the sector’s growth.
