Cryptocurrency custodian BitGo and Genesis Global Trading OTC platform have entered into a partnership, enabling institutional investors to enjoy the high-speed cryptocurrency trading.
As a result, BitGo customers will be able to use Genesis Global Trading to carry out transactions at the speed similar to that in traditional financial markets.
If a customer has 100 BTC in a cold BitGo wallet, for example, Genesis can offer him to sell them instantly at the current price. When a client accepts the deal, BitGo locks up the assets and holds them to sell to Genesis, which, in its turn, initiates a USD bank transfer in favour of BitGo. After the bank transfer is completed, which may take 24 hours or more, the Bitcoins become Genesis’s property, without leaving the vault and the transaction being recorded in the public blockchain.
"Our partnership with Genesis Trading, a FINRA and SEC regulated company, gives our clients access to liquidity through Genesis’ robust network of trading partners. And that solves the real problem which is the need to access liquidity - not the need to speed up withdrawals," stated in the press release Mike Belshe, CEO in BitGo.
The approach solves the issue of time-lag cold storage and addresses the counterparty and settlement risks associated with some OTC crypto trading. For example, a buyer agrees on the price with a second party which asks to send the cash and only then sends bitcoins worth millions of USD back. The scenario seems to be pretty unviable with such amounts of cash.
"BitGo has been a terrific, long-term partner to Genesis and we have a lot of confidence in their institutional offerings," said Michael Moro, CEO in Genesis.
The BitGo initiative address the opportunities cryptocurrencies provide, like real-time settlement, the use of digital tokens instead of dollars and vice versa.