Cryptocurrency exchange Bybit has partnered with Cactus Custody to implement a new settlement mechanism that reduces risks for institutional traders.
Partnership with Cactus Custody
According to a press release dated July 23, Bybit announced its collaboration with Cactus Custody, a licensed digital asset custodian under Matrixport Group. The new settlement structure eliminates the need for pre-funded accounts on exchanges. Assets will remain under Cactus Custody's control until the trade is executed.
Mechanics of the New Solution
Cactus Oasis functions as a custody-backed airlock between institutions and exchanges. Instead of depositing funds directly onto Bybit, traders allocate collateral to Cactus Custody's segregated accounts. The system applies dual-authorization mechanisms, real-time monitoring modes, and holds 95% of assets in cold storage and secure modules.
Rebuilding Trust in Bybit
The partnership with Cactus Custody comes amid the backdrop of a recent $1.5 billion hack, prompting Bybit to rebuild trust among institutional clients. The new mechanism ensures secure asset management and prevents client funds from being held on the exchange until the execution of trades.
The collaboration between Bybit and Cactus Custody marks a significant step towards enhancing security and efficiency in trading for institutional users. It may reduce risk and improve Bybit's reputation in light of recent incidents.
