Bybit partners with Fireblocks to reduce counterparty risk
Bybit, a leading cryptocurrency exchange ranking among the top three in terms of trading volume, has revealed a partnership with Fireblocks, a company specializing in digital asset management and blockchain innovation, according to information shared with Finbold on June 18.
Bybit is set to incorporate Fireblocks’ Off Exchange solution to minimize counterparty risks involved in institutional trades.
Fireblocks’ Off Exchange solution enables institutional clients to interact with centralized exchanges (CEXs) through an on-chain multiparty computation (MPC) wallet, effectively mitigating risks associated with counterparty exchanges.
The integration will utilize MPC technology to empower traders to allocate their assets directly from a mutually controlled wallet to an exchange. This feature ensures the protection of assets in scenarios such as hacks, bankruptcy, and fraud, while ensuring that client accounts remain fully collateralized.
Through the adoption of Off Exchange, Bybit aims to enhance its security measures to meet the growing demands of institutional traders.
Eugene Cheung, Head of Institutions at Bybit, emphasized the platform’s commitment to providing secure enterprise solutions, stating:
“At Bybit, we are dedicated to building trust within the crypto industry and strengthening the security of institutional trades. The integration of Fireblocks Off Exchange provides enhanced on-chain transparency and a secure trading environment, bolstering trust and confidence for our clients. By partnering with Fireblocks, we reaffirm our steadfast commitment to safeguarding institutional assets, a top priority for us.”
The advantages of Fireblocks’ Off Exchange solution are numerous for institutional clients. Through the use of MPC wallets, Off Exchange securely locks and mirrors assets to the connected exchange. Funds in collateral vault accounts (CVAs) are also safeguarded, reducing the risk of unauthorized access or asset loss.
Moreover, the blockchain-native system ensures real-time on-chain settlement, tracking transactions and asset movements on the blockchain. This approach enhances transparency and traceability for both the platform and its institutional clients, who can withdraw assets to other platforms or wallets once the CVA is rebalanced.
By optimizing capital allocation and streamlining trading activities, this innovative approach provides increased liquidity, benefiting both clients and the exchange.
