London, June 27, 2023 — Copper Switzerland has announced that Deribit, the leading global exchange for crypto derivatives, will be adopting the new ClearLoop trust structure. Deribit will leverage the new structure to increase the secure off-exchange custody options for its clients and further protect their assets via Copper’s market-leading and innovative legal framework.
The ClearLoop technical functionality of off-exchange collateral management and settlement will remain unchanged but will benefit from bankruptcy remoteness delivered by ClearLoop’s market leading legal framework.
In light of market events spanning the last 9 months, ClearLoop has become increasingly relevant and even requisite for institutional investors to participate in the digital asset space. Deribit continues to be the exchange of choice for crypto derivatives trading and Copper is seeing a marked increase in clients accessing the exchange through ClearLoop. Since November 2022, ClearLoop has been the source of roughly 5% of Deribit’s overall volume.
Client asset protection and capital efficiency have always been the drivers for Copper’s products and services. ClearLoop, Copper’s flagship product, was launched in 2019 with Deribit being amongst the first exchanges to join with the shared goal of building a solid foundation of trust with institutional clients.
To address insolvency risk, Copper has established a new account structure dedicated to ClearLoop over which an English law trust is created. Copper is appointed as the trustee and holds the client-delegated assets and Deribit collateral in the account on behalf of clients and Deribit as beneficiaries. Clients and Deribit also grant a security interest over their assets within the trust in favour of each other. Within the trust, Deribit posts sufficient collateral to facilitate settlement per a pre-determined settlement schedule. The collateral is monitored 24/7 by Copper’s financial risk team giving both clients and Deribit comfort that settlement obligations will be met.
Luuk Strijers, Chief Commercial Officer of Deribit, commented, “At Deribit, we place heavy emphasis on having a variety of secure and transparent custody solutions. We strive to advance the crypto derivatives space and advanced custody platforms like Copper’s ClearLoop play an integral part in this process. Those who elect to use Copper as the custodian of choice when trading on Deribit will have all deposits & withdrawals organised via the omnibus account that is subject to an English Law trust. Furthermore, the client’s P&L will settle on a one-to-one basis versus each individual Copper account on a daily basis.”
“We worked with asset managers, exchanges, and law firms for over a year to develop a solution to key market issues. ClearLoop, the fruit of this collaboration, allows investors to settle trades instantly, keep their assets secure and insured in third-party custody, removing concerns about self-custody, all the while mitigating counterparty risk and the associated limitations with volume,” explains Dmitry Tokarev, Founder and CEO of Copper. “Over the years we’ve evolved ClearLoop to meet market needs, further mitigating exchange counterparty risk with the likes of our innovative trust structure and dedicated risk management team.”
Deribit is a centralized, institutional-grade crypto derivatives exchange for options and futures trading based in Panama City, Panama. Deribit’s state-of-the-art infrastructure offers instantaneous price discovery, low latency trading, advanced risk mitigation services, and deep liquidity via its network of top-tier market makers. Led by a team with decades of experience in options trading across all markets, Deribit facilitates a significant majority of all crypto options trading and has robust proof of assets and liabilities procedures to ensure the exchange is held to the highest of standards.
For additional information, visit: https://www.deribit.com/
Since being founded in 2018, Copper, a SOC2 Type 2 certified company with a registration in Switzerland, has been setting the standard for institutional digital asset by offering custody and collateral management of digital assets. Underpinned by multi-award-winning technology, Copper has built the comprehensive and secure products and services required to safely custody and trade cryptocurrencies and other digital assets such as tokens and stablecoins. At the core of Copper’s infrastructure is ClearLoop, which enables clients to trade and settle in near real time across multiple exchanges, while mitigating counterparty risk and increasing capital efficiency.
For more information, please visit: www.copper.co
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