BitMEX has partnered with Zodia Custody to introduce off-exchange collateral trading, allowing institutional clients to trade crypto derivatives while keeping their assets securely stored in segregated custody. The integration is available through Zodia Custody’s Interchange solution, which enables off-venue settlement without requiring traders to transfer funds directly onto the exchange.
BitMEX CEO Stephan Lutz said the move reflects lessons learned from major market failures, including the collapse of FTX and the $1.4 billion Bybit hack, both of which exposed risks associated with unsegregated or compromised exchange-held funds. He emphasized that custody failures and security threats have highlighted the importance of protecting client assets.
Off-Exchange Collateral Model Reduces Risk and Improves Capital Efficiency
Under the new system, institutional and professional traders can execute derivatives trades while their collateral remains in Zodia Custody’s segregated vaults. The mirrored collateral model supports cross-collateral trading using Bitcoin, Ether, USDT and USDC, enabling clients to access perpetual swaps and futures markets without pre-funding exchange wallets.
This structure is designed to enhance capital efficiency by eliminating the need to frequently move assets between custodial wallets and exchange accounts. It also reduces operational risks linked to traditional trading models that rely on pre-funded balances.
Zodia Custody’s Regulated Infrastructure Supports Institutional Adoption
Zodia Custody, launched in 2021 and backed by Standard Chartered, operates as an institutional digital asset custody provider with global reach. The platform secured Markets in Crypto-Assets Regulation (MiCA) authorization in Luxembourg in late 2025, enabling it to deliver regulated services across the European Union.
Lutz noted that custody has long been a core component of traditional financial markets and is becoming increasingly essential in the digital asset sector. As institutional participation in crypto trading expands, secure custody arrangements and segregated asset management are expected to play a crucial role in strengthening trust and market stability.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.