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Following 3AC insolvency crisis, OKX launches custodial trading sub-account to ‘address trust issue’

Aux Cayes FinTech Co. Ltd

Aux Cayes FinTech Co. Ltd

  • OKX’s all-new account mode provides the control, transparency and risk management necessary for investors to minimize losses for institutional investors in a volatile market environment.

  • The Custody Trading Sub-Account offer involves OKX intervening to ensure that the fund manager assigned to an investor fulfills their fiduciary duties.

VICTORIA, Seychelles, June 21, 2022 (GLOBE NEWSWIRE) — OKXthe world’s leading cryptocurrency platform, today announced the launch of its Custody trading sub-account product for clients wishing to benefit from trading team strategies and institutional and high net worth investors.

The custodial trading sub-account involves OKX acting as a trusted third party between the investor and their fund manager or trading team. The product mitigates the risks investors face by giving them greater control over their investments and offering multi-level risk management. It also provides greater transparency by allowing investors to monitor real-time leverage and margin usage and access and share OKX-verified trading records.

Haider Rafique, Global Marketing Director, OKX, said: “Recent near-flagrant insolvencies have taught us that many investors who entrust their funds to market makers or hedge funds have no control, or even visibility, over how their fund manager trades. These companies offer questionable risk management and transparency, and in some cases this has even reportedly led to investors’ funds being used to meet margin calls. We are launching the OKX Custody Trading sub-account to provide much-needed control and transparency and help everyone in the industry.

In terms of control, investors can set up a range of account trading access rights, while third parties and trading teams are restricted from moving investor funds directly. Comprehensive risk management protocols further prevent assets from being collateralized twice and allow investors to access features such as warning level, trade freeze level and kill switch. Finally, OKX’s smart contract auditing means that due diligence is performed by a trusted third party.

Lennix Lai, Director of Financial Markets, OKX, said: “After lessons learned from the recent debacle involving some mismanaged companies, we believe it is fundamentally important for the crypto industry to have an independent and trusted third party to act as a custodian for these types of assets. This custodian would provide both compensation and appropriate risk management. We need to find a way to separate client tokens from managers’ internal wallets while ensuring that managers fulfill their fiduciary duties to their clients and affected communities We also need to ensure that there is transparency for investors and communities about how their funds are staked, traded or used as collateral.

The OKX Custody trading sub-account allows the fund manager or trading team to access a wide range of products in the CeFi and DeFi spaces to fulfill their obligations to investors. During the custody period, the trading team is also equipped to protect its strategic proprietary trading and position information.

With this launch, OKX is building on the risk management record that has seen it protect over 500 million UST in user funds before the May LUNA/UST crash. OKX will continue to incorporate comprehensive risk management strategies to ensure users can invest safely and responsibly.

Learn more about the OKX Custody Trading sub-account here.

For more information, please contact:

Jack.sutherland@okx.com

About OKX

OKX is a leading crypto-trading application and Web3 ecosystem. Trusted by over 20 million global customers in over 180 international markets, OKX is known to be the fastest and most reliable crypto trading app of choice for investors and professional traders around the world.

Since 2017, OKX has served a global community of people who share a common interest in participating in a new financial system designed to be level playing field for all. We strive to educate people about the potential of the crypto markets and how to invest and trade responsibly. Beyond the OKX trading app, OKX Wallet is our latest offering for people looking to explore the world of NFTs and the Metaverse while trading GameFi and DeFi tokens.

To learn more about OKX, download our app or visit: okx.com

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