At OKX, our primary commitment is to provide institutional clients with enhanced transparency and greater control over their digital assets. We strive to balance capital efficiency, cost-effectiveness, and robust security. By collaborating closely with clients and industry stakeholders, we continuously expand our custody offerings to meet the evolving needs of institutions.
Our institutional custody roadmap is structured around five key directions, enabling clients to select the solutions that best align with their operational requirements and risk profiles.
Exchange Custody Solutions
Our exchange custody services are built on a foundation of full reserves, secure wallet infrastructure, and capital-efficient trading mechanisms.
Proof of Reserves
Ensuring the proper storage and segregation of assets held on an exchange is paramount. We publish a monthly Proof of Reserves audit, which comprehensively details both the assets held in reserve and the corresponding liabilities credited to our customers. Utilizing a Merkle tree proof-verification technique, clients can independently verify that their assets are held in a 1:1 ratio in wallets under our control. We encourage this verification and have developed an open-source tool to facilitate self-auditing of our solvency. For added assurance, clients may also employ third-party tools or even construct their own verification methods with minimal effort.
Security Framework
A significant majority of our reserves—95%—are stored in cold storage, providing maximum security. This is evident from our public Nansen dashboard, which shows that most reserves have remained stationary since September 2021. Our security architecture employs a strategic combination of cold and hot wallets to safeguard client funds effectively.
Enhancing Capital Efficiency
We are dedicated to ensuring that clients can utilize their working capital as efficiently as possible while it remains on our platform. To achieve this, we have developed several sophisticated tools.
Unified Account System
This system allows users to trade all instruments—including spot, perpetuals, futures, and options—from a single account, streamlining risk management. Several modes are available to cater to diverse trading needs:
- Simple Account Mode: Ideal for traders focusing exclusively on spot and options.
- Single-Currency Margin Mode: Suited for margin and derivatives traders with intermediate experience.
- Multi-Currency Margin Mode: Designed for professional, API, and institutional traders dealing in all instruments with pooled net equity and unrealized P&L.
- Portfolio Margin Mode: Best for advanced traders seeking to manage all instruments grouped by risk unit.
Margin and Lending Services
We offer a suite of services to optimize leverage and liquidity:
- Auto-Borrow Function: Enables immediate borrowing of assets directly into a trading account for seamless margin trading.
- VIP Loan Pool: Allows VIP clients to optimize leverage at stable, predictable interest rates, operating within our established risk engine methodologies.
- Post-Trade Settlement: We are exploring the development of a dedicated post-trade settlement solution for our institutional clientele.
Affiliated Regulated Custody and Wallet Solutions
We are actively developing affiliated regulated custodian and wallet solutions. These initiatives are designed to provide additional secure and compliant options for asset storage. We anticipate providing detailed updates to our clients regarding these developments by the end of the first quarter.
Partnerships with Third-Party Regulated Custodians
Beyond our affiliated solutions, OKX is engaged in discussions to form partnerships with established regulated custodians. Many traditional financial institutions are leveraging well-known legal structures from finance, such as trusts and security interests, to create secure escrow accounts for holding collateral. We aim to share more concrete information on the progress of these partnerships by the end of Q1.
Off-Exchange Settlement Solutions
In traditional finance, specialized intermediaries handle clearing, settlement, and custody to mitigate counterparty risk throughout the trade lifecycle. While such intermediaries are still emerging in the crypto space, their goal remains the same: to reduce market timing and counterparty risks through advanced cryptographic solutions. The most technologically sophisticated settlement solutions enable the mirroring of asset balances from a client's own custody onto a trading account, eliminating the need for pre-funding custodial orders. We look forward to updating the market on these developments shortly. 👉 Explore advanced settlement strategies
Self-Custody Solutions
For clients who prefer to maintain direct control over their assets, we offer the OKX Wallet—a self-custodial, multi-platform (mobile, web, extension), interoperable, and multi-chain wallet. While this solution is popular among individual traders, we are also developing dedicated features for institutions. These will allow clients to:
- Secure assets in a dedicated address, completely segregated from OKX reserves.
- View and track their address balance in real-time directly on the blockchain.
- Manage their institutional address using their own private keys in a self-custodial manner.
Frequently Asked Questions
What is Proof of Reserves and why is it important?
Proof of Reserves is an independent audit that verifies an exchange holds sufficient assets to cover all client balances 1:1. It is crucial for ensuring transparency and verifying that user funds are fully backed and secure, mitigating the risk of fractional reserve practices.
How does OKX ensure the security of assets in its custody?
OKX employs a multi-layered security strategy. The vast majority (95%) of client assets are held in cold storage, disconnected from the internet. The remaining assets in hot wallets are protected by robust security protocols, including multi-signature technology and comprehensive monitoring systems.
What is the Unified Account and who is it for?
The Unified Account allows traders to access multiple products—spot, futures, options, perpetuals—from a single account, simplifying margin management and improving capital efficiency. It is designed for everyone from retail traders to large institutions, with different modes catering to varying levels of experience and complexity.
What are the benefits of off-exchange settlement?
Off-exchange settlement solutions aim to reduce counterparty risk by allowing trades to be settled without requiring assets to be pre-funded on the exchange. This enhances security and can improve capital efficiency for institutional traders.
Is self-custody a viable option for institutional clients?
Yes, self-custody can be a viable option for institutions that have the infrastructure and expertise to manage their own private keys securely. OKX is enhancing its self-custody wallet offerings with features like dedicated institutional addresses to better support these needs.
When will more details on affiliated custodians be available?
We are targeting the end of the first quarter to provide our clients with more concrete updates on the development of our affiliated regulated custodian and wallet solutions.
This content is provided for informational purposes only. It is not intended to provide any investment, tax, or legal advice, nor should it be considered an offer to purchase, sell, or hold digital assets. Digital assets involve a high degree of risk and can fluctuate greatly. You should carefully consider whether trading or holding digital assets is suitable for you in light of your financial condition. Please consult your legal/tax/investment professional for questions about your specific circumstances.