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Bitget launched the Open Custody Network (OCN) on November 5. The infrastructure connects external banks and institutional custodians to Bitget’s trading platform, allowing eligible users to trade on the exchange while using a separate provider for asset safekeeping.
Separating Trading From Custody
Historically, major cryptocurrency exchanges combined trading and custody. While convenient, this model concentrates risk; a platform failure can block access to both trading and assets. Bitget intends for the OCN to address this by decoupling the two functions.
Under this model, customers trade through Bitget while assets remain with an independent custodian. This structure reduces the need to keep assets directly on the exchange. By removing unilateral control over deposits, the network seeks to limit exposure to the platform’s technology, operational controls, governance, and financial health.
Operational Challenges and Risk Factors
Separating trading from custody creates complex operational needs. Fast platforms require settlement certainty. Traditional markets use clearing houses and collateralization, whereas many crypto venues simply hold assets in exchange accounts. With external custodians, the system must establish a dependable method for collateral representation and settlement.
Designing this requires balancing collateral efficiency, counterparty exposure, and settlement finality. “Off-exchange custody” does not guarantee absolute security. Structures may still involve settlement obligations, pre-authorized transfers, credit arrangements, or shared providers. Institutions should examine legal title, withdrawal authority, and the impact of a trading venue suspension.
Recent sector incidents show that risk often stems from how components connect. For instance, reporting on Aave restricting new tBTC activity showed how system interconnections create vulnerabilities. A custody network may also be difficult to explain if protections vary by asset or jurisdiction.
Bitget’s announcement describes the network’s launch and intended model. It does not establish that every partner provides identical services, that all users are eligible, or that risk is eliminated. Clients should verify participating custodians, operating jurisdictions, and methods for securing trading obligations. Independent security assessments and clear segregation terms are essential for evaluating actual safeguards.
Frequently Asked Questions
What is the Bitget Open Custody Network?
Launched November 5, the Open Custody Network connects external banks and institutional custodians with Bitget’s trading infrastructure, allowing eligible users to trade while keeping assets with a separate provider.
Does the OCN eliminate all custody risks?
No. The network still involves settlement obligations and counterparty exposures. Institutions must verify legal title, withdrawal controls, and the specific safeguards of each custodian.
