Copper.co creates infrastructure for bespoke prime brokerage of digital assets
Copper.co, a crypto portfolio manager for institutional investors, has launched a bespoke prime brokerage for digital assets.
Built on its existing Platform, and capitalising on the secure custody of Copper Unlimited, the infrastructure reduces the risk a fund takes allowing investment managers to trade across multiple exchanges by using a dedicated and whitelisted custodian.
Dmitry Tokarev, CEO, Copper.co, says: “Copper has built the products and framework which enable Funds and Funds of Funds to deploy capital across multiple exchanges while minimising the inherent risk of seed and private key storage. Historically this has been the biggest barrier to entry for institutional investment in digital assets.”
To prevent malicious attacks against a fund’s infrastructure, and to prevent an Investment Manager being forced to withdraw the fund’s assets to an unauthorised, potentially criminal, external wallet location, an independent custodian with technological and business process solutions is required to mitigate risk.
Traditional financial custodians are not equipped to manage these risks. The Copper Unlimited custody application, combined with the Copper Platform for digital asset portfolio management, can be connected to a Fund and a Fund’s Exchange trading accounts, to provide bespoke brokerage services for digital assets, securely and conveniently using the Exchange’s APIs. This architecture allows for the safe moving of digital assets within a Walled Garden environment.
To move digital assets out of a Copper Walled Garden, investment managers require at least two of three nominated private key holders to approve transactions. Each transaction must be approved using an encrypted Copper key file. With multiple users required to complete a transaction, Copper Unlimited uses advanced encryption technology to remove the inherent risk associated with private key creation and management.
Michael Hall, Fund manager Nickel Asset Management, says: “The Copper Walled Garden is the first independent end-to-end custody solution for funds that trade on multiple exchanges. Institutional investors can now invest in crypto funds, confident that their funds are always controlled by the custodian, mitigating the risk of a self-custodying fund manager.”