Cryptocurrency banking firm Sygnum has expanded its institutional crypto custody services through a new partnership with Deribit, one of the largest crypto derivatives exchanges.
The announcement introduces Sygnum Protect, an off-exchange custody solution aimed at enhancing security and efficiency for institutional traders.
In a constantly evolving crypto custody space, the partnership leverages technology from crypto infrastructure provider Fireblocks, enabling Deribit traders to mirror their digital assets held securely in Sygnum’s custody while executing trades on Deribit. This approach allows traders to maintain institutional-grade protection without sacrificing direct access to Deribit’s extensive range of trading products and liquidity pools.
Deribit CEO Luuk Strijers emphasized the strategic advantage of this integration for institutional investors. “This integration provides institutional traders with both the capabilities and security assurances they require to trade any of Deribit’s leading products comfortably,” Strijers said.
Central to the integration is Fireblocks’ Off Exchange technology, launched in November 2023. The technology utilizes multiparty computation (MPC) to securely manage digital assets off-chain, significantly mitigating counterparty risks associated with direct asset custody on exchanges. Michael Shaulov, CEO of Fireblocks, explained the efficiency gained from the collaboration, highlighting that “exchanges and custodians can now leverage our standardized integration without requiring custom development—accelerating institutional adoption so assets can be securely held via regulated bank custody.”
Richard Astle, vice president of business development at Fireblocks Network, detailed the operational mechanics of the partnership. According to Astle, the digital assets held by Sygnum on behalf of trading clients are managed within a dedicated Sygnum collateral account. “This allows the trading client to trade on Deribit without pre-funding the exchange,” Astle clarified, adding that the integration utilizes the exact technical structure as Fireblocks’ Off Exchange solution, with the custodian responsible for verifying all settlements with the exchange.
The companies noted the integration’s role in countering rising cybersecurity threats by removing the necessity for pre-funded accounts on exchanges, significantly lowering exposure to potential attacks. Additionally, the arrangement ensures institutions maintain compliance with regulatory standards by holding assets securely in a regulated banking environment.
Since its introduction, Fireblocks’ Off Exchange platform has gained rapid adoption, initially supporting Deribit and expanding swiftly to include exchanges such as HTX, ByBit, OKX, Gate.io, BIT, OneTrading, Coinhako, and Bitget.
