Coinbase Custody Runs Its First Direct OTC Trade from Cold Storage
Coinbase’s Custody and OTC services have been integrated to provide “easy and immediate liquidity” to customers’ offline funds.
US-based cryptocurrency exchange Coinbase said on Wednesday that its custodial unit, Coinbase Custody, had completed its first over-the-counter (OTC) trade directly from cold storage without transferring the customer’s funds online.
As per the blog post announcing the news, the operation was conducted after Coinbase Custody had been “directly integrated” with the company’s OTC desk. The move represents a “major unlock” for Coinbase’s clients, providing “easy and immediate liquidity on their offline funds”.
“Our clients were loud and clear that they needed access to instant and anonymous liquidity. We’re pleased to take this first step towards a more vertically-integrated custody service and look forward to adding more features that will make the trading experience as seamless as possible for our clients,” Coinbase explained.
The exchange launched its custody service in May 2018. Several months later, the New York Department of Financial Services (NYDFS) approved the company’s application to create a wholly-owned subsidiary called Coinbase Custody Trust Company. The license enabled the firm to store Bitcoin (BTC), Bitcoin Cash (BTH), Ethereum (ETH), Ether Classic (ETC), Litecoin (LTC) and Ripple (XRP) on behalf of institutional investors.
Coinbase’s OTC trading desk became operational last November. Christine Sandler, a director of sales for the company’s institutional businesses, commented at the time that the move had been fuelled by increased institutional investor demand. She further revealed Coinbase’s plans for future integration of the OTC and custody services.
In a similar move in January, US-based blockchain security provider BitGo and OTC crypto trading group Genesis Global Trading joined forces to offer institutional clients the ability to trade digital assets without having to move them from BitGo’s custody service to a cryptocurrency exchange. BitGo CEO Mike Belshe said at the time that the partnership would solve “the real problem which is the need to access liquidity - not the need to speed up withdrawals”.