Two London-based firms, Crypto Facilities and Elliptic, have joined forces to provide a settlement and clearing mechanism to separate bitcoin custody from other exchange functions. The settlement and clearing mechanism marks another step in bringing bitcoin to capital markets. Crypto Facilities is a bitcoin derivative exchange while Elliptic is a bitcoin analytics and security firm.
Crypto Facilities will host client accounts in Elliptic’s secure, KPMG-accredited vaults. Under this arrangement, Crypto Facilities accounts are fully insured by an A-rated, Fortune 100 underwriter. Each client will own their own segregated, ring-fenced account that is settled daily on the block chain. The client can see all movement in the account as the block chain independently verifies all activity.
An ‘Industry First’
The solution, which the firms herald as an industry first, overcomes the traditional setup of bitcoin trading venues in which client assets are managed directly by the exchange and cannot be audited externally.
“Capital markets would never entertain the idea of having an exchange hold assets or of pooling funds together,” said