QCP Capital and SBI Alpha Trading, Non-Clearing Transactions Collateralized by Bitcoin | CoinDesk JAPAN | CoinDesk Japan

Singapore’s QCP Capital and Japan’s SBI Alpha Trading announced today that they have executed over-the-counter (OTC) trading of cryptocurrency options on regulated platforms without going through a clearing house.

According to the release, the so-called “non-cleared trades” were negotiated directly between QCP Capital and SBI Alpha Trading, using Bitcoin (BTC) as collateral and Clear, which operates licensed electronic marketplaces in the US and UK. Executed at Markets.

Collateral custody was handled by London’s Zodia Custody, and risk management partially used the Corda Network developed by R3.

The transaction uses a multi-custodian collateral network to ensure that assets held in custodians are segregated from custodian assets. This ensures that collateral remains safe and protected even if the custodian fails.

It also introduced the ability to augment collateral in real-time with periodic payments through the blockchain, while protecting collateral from loss in the event of a counterparty bankruptcy.

This unique approach to risk management is consistent with the International Swaps and Derivatives Association (ISDA) requirements for non-cleared derivatives in fiat currency swaps.

“This approach to counterparty credit exposure management, derived from traditional financial market practices, eliminates significant risk to counterparties of FTX and other failed crypto companies,” the press release reads.

｜Translation: coindesk JAPAN
｜Editing: Takayuki Masuda
| Image: Pixabay
｜Original: QCP Capital, SBI Alpha Execute First Uncleared Crypto Options Trade on Regulated Platform Using Bitcoin as Collateral