What To Know:
- Integration of Komainu Connect lets institutions trade on Bybit while assets stay in regulated third-party custody.
- The model reduces counterparty risk using bankruptcy-remote wallets and off-exchange settlement for capital efficiency.
- Partnership aligns with rising demand for secure custody as Komainu scales globally with new acquisitions and AUM growth.
Leading crypto exchange, Bybit has struck a strategic partnership with regulated custodian Komainu to give institutional clients a safer, more efficient way to trade while keeping assets in third party custody. The partnership integrates Komainu’s Komainu Connect platform directly with Bybit’s trading infrastructure, allowing clients to trade on the exchange without pre-funding on exchange and while assets remain held by a regulated custodian.
Bybit Teams Up With Komainu for Better Crypto Security
The arrangement addresses a central concern for institutional investors: counterparty risk. Under the Komainu Connect model, assets are stored on chain, bankruptcy remote segregated wallets that mirror collateral on exchange. Regular, automated off exchange settlement replaces the need for pre-funding on exchange and provides a clearer, legally defined separation between custody and market access. That separation is intended to reduce operational risk and improve capital efficiency for large traders.
“Komainu Connect delivers exactly that—pairing regulated, secure custody with frictionless market access,” Paul Frost Smith, co-CEO at Komainu, said in a statement. “Institutional investors increasingly demand the ability to act on market opportunities without compromising on security or compliance.” Yoyee Wang, head of Bybit’s business to business unit, said the partnership was driven by client demand for stronger custody options alongside exchange liquidity. “Our top priority is to ensure trust and security for our clients,” she said. “Partnering with Komainu is another step in listening to our clients’ needs and strengthening our capabilities.”
Komainu has been expanding Komainu Connect by integrating directly with exchanges, brokers and lending platforms. The platform promises 100 percent collateral mirroring, client by client wallets, comprehensive asset coverage and a holistic view of custody and collateral. Those features aim to give institutional counterparties fast access to a broader network of market participants while preserving legal clarity over asset ownership.
The partnership comes as Komainu scales up its global crypto custody efforts. The firm completed a strategic acquisition in Singapore, gaining Propine’s regulated footprint and immediate access to a key Asian financial centre. It also counts Nomura, CoinShares and Ledger among its backers, a combination that brings traditional finance relationships, institutional crypto expertise and hardware security know-how to the custodian’s offering. Komainu reported more than $10 billion in assets under management and closed a $75 million funding round earlier this year.
This expansion plan requires operational growth. Komainu intends to grow staff from roughly 70 to 120 by year end, according to industry reports. Hiring is intended to support integrations, compliance across jurisdictions and client onboarding. The company’s ambition is to become a leading non-US digital asset custodian, targeting markets with active regulatory frameworks for digital asset service providers.
Regulatory regimes vary widely around the world and managing those rules requires constant attention. There is an execution risk in the integration of acquired firms and technology. Custody services are filled with competition in the form of established custodians and upstarts fighting for institutional mandates. Volatility of the market also makes matters complex for both asset managers and custodians. Nevertheless, the partnership shows that exchanges and custodians are responding to demand from banks, asset managers and large trading firms for custody solutions that don’t necessarily have to take on full on chain exposure on exchange.
For Bybit, the shift offers a means by which it expands institutional flows and responds to client concerns of segregation of custody as well as legal clarity. To Komainu, it is a way to further expand market access and service to a broader customer base. The transaction is part of an overall quest by institutional market participants for arrangements that combine security, compliance and trading flexibility. As custody infrastructure matures, additional institutions will be searching for the same types of market integration that allows them to use the market without adding exposure to other counterparties.
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