OKX, the world-leading cryptocurrency platform, today announced the launch of its Custody Trading Sub-Account product for customers looking to benefit from trading team strategies and institutional and high-net-worth investors.

Custody Trading Sub-Account involves OKX acting as a trusted third party between the investor and their money manager or trading team. The product mitigates the risks investors face by granting them greater control over their investments and delivering multi-layered risk management. It also provides greater transparency by enabling investors to monitor leverage and margin usage in real-time and access and share OKX-verified trading records.

Haider Rafique, Global Chief Marketing Officer, OKX, said: “The recent conspicuous near-insolvencies have taught us that many investors who entrust their funds to market makers or hedge funds don’t have control, or even visibility, over how their money manager is trading. These firms provide questionable risk management and transparency and, in some cases, this has even allegedly led to investor funds being used to answer margin calls. We are launching OKX Custody Trading Sub-Account to provide much-needed control and transparency and help everyone in the industry.”

When it comes to controlling, investors are able to configure a range of account trading access rights, while third parties and trading teams are not permitted to move investor funds directly. Comprehensive risk management protocols additionally prevent assets from being collateralized twice and enable investors to access features such as warning level, trade-freeze level, and kill switch. Finally, smart contract auditing from OKX means that due diligence is undertaken by a trusted third party.

Lennix Lai, Financial Markets Director, OKX, said: “After lessons were learned during the recent debacle involving some mismanaged firms, we believe it’s fundamentally important that the crypto industry has an independent, trusted third party to play the role of custodian for these types of investments. This custodian would provide both clearing and appropriate risk management. We need to find a way to segregate clients' tokens from managers’ in-house wallets while making sure the managers fulfil their fiduciary duties to both their clients and the relevant communities. We also need to ensure that there is transparency for investors and communities as far as how their funds are being staked, traded, or utilized as collateral.”

OKX Custody Trading Sub-Account allows the money manager or trading team to access a broad range of products in both the CeFi and DeFi spaces in order to fulfil their obligations to investors. During the custody period, the trading team is also equipped to protect their proprietary strategic trading and position information.

With this launch, OKX builds on the risk management record that saw it protect more than 500 million UST in user funds prior to May’s LUNA/UST crash. OKX will continue to incorporate comprehensive risk management strategies to ensure users can invest both safely and responsibly.