Creating bespoke prime brokerage services for digital assets hinges on secure custody and easy access to liquidity
Using a Fund’s exchange APIs and the Copper Platform for portfolio management, Copper can create a Walled Garden where it provides custody, and multiple exchanges facilitate trading and liquidity.
The nature of the blockchain is such that transactions are permanent & immutable.
To prevent malicious attacks against a Fund’s infrastructure, and to prevent an Investment Manager being forced to withdraw the Fund’s assets to an unauthorised, potentially criminal, external wallet location:
An Independent Custodian with technological and business process solutions is required to mitigate risk
There is no traditional finance model for prime brokerage with digital assets. Currently, investment managers are required to effectively self-custodise their assets. This presents a number of critical risks:
Traditional financial custodians are not equipped to manage these risks.
However, the Copper Unlimited custody application, combined with the Copper Platform for digital asset portfolio management, can be connected to a Fund and a Fund’s Exchange trading accounts, to provide Bespoke Brokerage services for digital assets, securely and conveniently using the Exchange’s APIs. This architecture allows for the safe moving of digital assets within a Walled Garden environment.
Using secure multi-party computation, key shards are created independently by the client, their trusted third party, and Copper. This creates a wallet in Copper Unlimited, which will be connected to the platform and exchanges.
To learn more about Copper Unlimited, our secure offline custody application, please read this article.
The Fund’s investment manager will onboard with all of the exchanges required to facilitate their trading strategies. They then set the only non-exchange whitelisted withdrawal address as their Copper custody account.
Using the Fund’s existing OEMS, the Investment Manager is now free to trade between exchanges, with the Copper Unlimited Vault providing secure, independent custody.
If you would like a demonstration of how this can be set up for your fund, please get in touch.