Bitcoin analytics and security firm Elliptic and bitcoin derivatives exchange Crypto Facilities have launched a settlement and clearing mechanism that separates bitcoin custody from all other exchange functions.
Crypto Facilities’ client accounts are now hosted in Elliptic’s secure, KPMG-accredited vaults and are fully insured by an A-rated, Fortune 100 underwriter. Each client owns their own segregated, ring-fenced account which is settled on the blockchain every day. Any movement in the account is exposed to the client and can be independently verified on the blockchain.
The industry-first solution overcomes the traditional setup of bitcoin trading venues in which client assets are typically managed directly by the exchange and cannot be audited externally.
Jean-Christophe Laruelle, COO of Crypto Facilities, says: “Capital markets would never entertain the idea of having an exchange hold assets or of pooling funds together. The history of high profile hacks has demonstrated that this is not a solution for the bitcoin space either. With Elliptic we have found the ideal partner to define a whole new benchmark for bitcoin clearing and custody.”
James Smith (pictured), CEO of Elliptic, says: “Our mission is to bring confidence and certainty to bitcoin. This deep integration of our two firms is an essential step towards enterprise-scale bitcoin trading. With Crypto Facilities’ strong and robust trading infrastructure, we expect trade in bitcoin derivatives will flourish, improving bitcoin’s price stability and driving enterprise adoption.”
Crypto Facilities went live earlier this year and has quickly become popular with sophisticated traders. The new solution is available immediately and comes with a complete re-launch of Crypto Facilities’ trading interface.
“This is a watershed moment for bitcoin trading,” says Crypto Facilities CEO Timo Schlaefer. “Experienced market participants will immediately recognize that we have done away with one of the biggest risk factors in the bitcoin ecosystem.”
