By Francis Lew, CEO
Nodeam prides itself on the standards and processes instilled to safeguard clients’ assets from nefarious activities.
We have taken a pioneering step in addressing these challenges by appointing Copper, a Swiss-based digital asset infrastructure provider, to protect clients’ cryptocurrency assets while optimising security, speed, efficiency, and convenience.
Custody secured by MPC technology
When clients deposit their digital assets with Nodeam, the assets are stored in a segregated client vault that lies within Copper’s secure digital asset custody.
Nodeam uses Copper’s Multi-Party Computation (MPC) technology to secure custody.
This technology is used to manage the private keys for all wallets and vault in our setup.
In the creation process, every private key is divided into three individual shards and thereafter safeguarded by three independent parties who jointly control a wallet and vault.
This ensures no single entity, including Nodeam, has access to the complete key.
Even if a part of the system is compromised, the assets in custody remain secure.
This arrangement not only bolsters the security of assets but also shields them from vulnerabilities stemming from single points of failure.
Liquidity providers and insolvency risk exposure
Nodeam understands the operational need for access to liquidity in the markets and the ensuing counterparty risks associated. Such liquidity needs are paramount to our product offerings and operations. To mitigate such risks, Nodeam’s policy is to only interact with providers within a secure custody ecosystem.
Historically, the digital asset market has seen the practice of clients’ assets being held exclusively by exchanges in their own ecosystem which leaves clients funds exposed to all types of risks.
Copper ClearLoop allows Nodeam to interact with centralised exchanges without funds leaving Copper’s secure custody.
This format not only ensures the security of assets but also helps to enhance capital efficiency.
Such an off-venue settlement system reduces the need to move funds on-chain between Nodeam and the counterparties we interface with, thereby reducing on-chain exposure and minimising transactional costs.
To address the insolvency risk of any ClearLoop participant, Copper has established an account structure dedicated to ClearLoop, over which an English Law Trust is created.
Client assets are therefore always protected.
With Copper, Nodeam has put in place an institutional safeguard that forms the foundation of solid practices to ensure clients who have placed their trust in us will never be misplaced.