UK Crypto Exchange Archax Launches FCA-Regulated Custody Service
U.K.-regulated cryptocurrency exchange Archax has launched a digital asset custody service with the blessing of regulators, as institutional crypto players button up their operations and try to rebuild trust in the sector.
The London-based Archax and its new custody business are among the few offerings to have cleared the Financial Conduct Authority’s (FCA) high bar for firms dealing in digital assets. All assets held in custody will be entirely segregated and “solvency-remote” from the exchange, said Archax, meaning that if the trading business did go bust, custodied assets would not be included in any bankruptcy proceedings.
“Events like FTX have highlighted the need for a more traditional approach to things,” said Archax Chief Marketing Officer Simon Barnby in an interview. “As an FCA-regulated custodian, we are permitted to hold cryptocurrencies, tokenized assets like funds or real estate, as well as traditional instruments and cash for our clients.”
The Archax custody service will further appeal to banks and big institutional customers by virtue of being partnered with Swiss multi-party computation (MPC) tech provider Metaco. The service will be rolled out using IBM Cloud, a battle-tested key security environment familiar to many of the world’s big banks.
“We wanted to find partners with the right expertise, particularly around the security of cryptographic keys, where we could use their technology but not outsource stuff, because the FCA requires us to be in control,” said Barnby.