Sygnum, a regulated digital asset banking group, has expanded its off-exchange custody platform, Sygnum Protect, to include Deribit, the world’s largest crypto derivatives exchange.
Notably, the integration allows institutional traders to access Deribit’s liquidity while maintaining custody of their assets in a regulated banking environment.
The move, announced on March 5, aims to mitigate counterparty risk by ensuring assets remain securely held with Sygnum Bank instead of being deposited directly on exchanges.
For context, the platform leverages Fireblocks’ Off-Exchange solution for automated settlement and collateral management, further strengthening security measures.
Enhancing Security Amid Market Risks
Institutional traders using Sygnum Protect can now mirror their assets to Deribit without transferring custody. This separation between custody and trading is designed to address concerns over exchange failures and cyber threats, which have increased in frequency and sophistication.
“Counterparty risk awareness in crypto comes in cycles, and the recent major cyberattack has triggered one of the largest waves of exchange derisking since FTX,” said Dominic Lohberger, Sygnum’s Chief Product Officer in the announcement. “Sygnum Protect is also an essential building block for strengthening the resilience of the crypto industry.”
In addition, the expansion follows rising institutional demand for off-exchange custody solutions, particularly after major market disruptions. By keeping assets off-balance sheet and in a regulated custody framework, traders can safeguard their holdings while accessing Deribit’s derivatives market.
Fireblocks’ Role in Secure Trading
The partnership incorporates Fireblocks’ Off-Exchange technology, allowing traders to programmatically lock assets in their wallets while executing trades instantly. This structure ensures funds remain segregated in multi-party computation (MPC) wallets, reducing exposure to exchange insolvencies, hacks, or fraud.
Michael Shaulov, CEO of Fireblocks, emphasized the importance of institutional-grade security in crypto markets. “This integration with Sygnum Protect and Deribit demonstrates the power of Fireblocks Off-Exchange. Exchanges and custodians can now leverage our standardised integration without requiring custom development—accelerating institutional adoption.”
Institutional Trading Landscape
Deribit, known for its deep liquidity in crypto derivatives, sees the integration as a step toward providing enhanced security and transparency for its institutional clients. “We are very pleased to offer additional security and transparency capabilities to our institutional clients looking to trade crypto derivatives through Sygnum Protect,” said Luuk Strijers, CEO of Deribit.
Since launching in early 2024, Sygnum Protect has attracted strong demand from institutional traders seeking secure, flexible custody solutions. The platform supports multiple collateral options, including fiat, cryptocurrencies, and tokenized money market funds.
The collaboration between Sygnum, Deribit, and Fireblocks underscores a broader industry shift toward reducing exposure to counterparty risk while maintaining efficient market access.
