Problem: Self-custody for crypto hedge funds

We believe that self-custody for crypto hedge funds trading on multiple exchanges is not a viable institutional solution (see this article on self-custody we wrote earlier). In short, although many custodians claim to have institutional custody, in practice they lose control of the fund’s crypto assets as soon as they are sent to an exchange.

At Nickel Asset Management, we have been seeking to set up a crypto arbitrage fund for some time, but we decided to launch only once a solution to self-custody was available. …

A short note on why on exchange crypto assets are insecure

Cryptocurrency fund custodians

A cryptocurrency custodian is a specialized financial institution responsible for safeguarding a firm’s or individual’s cryptocurrency assets. If a firm is only going to hold and not trade crypto assets then it doesn’t need a very sophisticated custody solution. However hedge funds that plan on trading crypto assets on multiple exchanges, require a different and more sophisticated custody solution.

The current hedge fund custody situation

The current trend amongst crypto hedge funds is to appoint a custodian and self-custody the crypto assets that are sent to exchanges. …


Nickel Digital Asset Management

Europe’s leading digital assets investment manager