Zodia Custody, a leading institution-first digital asset custodian backed by Standard Chartered, SBI Holdings, Northern Trust, and National Australia Bank, has announced a partnership with Algoz, a quantitative digital asset technology firm whose strategies were awarded three Hedgeweek Awards in 2023.

The two companies’ collaboration brings a wealth of security and efficiency measures for institutional investors in digital assets, delivering a safer model for digital asset investing intended to greatly mitigate the kind of counterparty risk that caused significant market turbulence in 2022.

This model for digital asset investment relies on Algoz Quant Pro, an investment vehicle launched in 2023 in response to increasing instances of illegally commingled funds in the industry. The launch of the partnership is driven by the firms’ mutual commitment to protecting investor funds from counterparty insolvency, and promoting best practices in security, efficiency and regulatory compliance.

Through the partnership, Algoz managers will be able to trade the collateral value of investor holdings without taking control of investor assets directly, providing an additional layer of security for clients. In addition to this, by harnessing Zodia Custody’s Interchange offering, Algoz will be able to offer off-venue settlement, further mitigating the liquidity, insolvency and operational risks associated with some venues.

Clients will also be able to store funds in Zodia Custody’s segregated cold storage wallets, which ensures assets are not co-mingled and presents significantly reduced risk for institutions.

In contrast to standard digital asset custody services, funds held in Zodia Custody wallets can be withdrawn without a lock-in period, providing additional efficiency and flexibility for institutions. Institutions will also benefit from the full transparency afforded by the blockchain, making all wallets viewable at any time.

Algoz brings a wealth of digital asset trading experience to the space, having traded successfully through the most difficult and demanding periods, while garnering many new investors after its Market Neutral fund performance in 2022. Additionally, the significant volume of trading data accumulated by Algoz since 2017 has allowed the firm to tailor strategies for varying risk appetites and provide proven strategies to their numerous SMA clients.

Zodia Custody CEO Julian Sawyer said: “Bit by bit, we are eliminating the operational risks that have stopped institutions from entering digital assets at scale. Our partnership with Algoz marks another milestone in this journey. By leveraging our off-venue settlement solution, Interchange, and Algoz’s Quant Pro, we give institutions greater efficiency and better security in trading digital assets that simply cannot be found elsewhere. We are rewriting the standards of our industry to be nothing short of excellence, always.”

Algoz Founder and Director, Yariv Eisenberg, spoke highly of the new partnership, stating that: “Zodia Custody shared our common goal in the creation of this unique product, Algoz Quant Pro. That goal was to put the investor first in the relationship; to improve trust and enhance transparency.”

Source: Zodia Custody