Today, Zodiac Guard announced that it was conducting trials with DMG Blockchain Blockseer Petra solution, for routing cryptocurrency transactions to compliant green mining pools. Additionally, there are plans to add risk ratings to the counterparties of crypto transactions.
Based in the UK, Zodia Custody was founded by Standard Chartered in association with Northern Trust.
One of the biggest institutional challenges with cryptocurrency is the ability to know who they are transacting with. Although there may be KYC in most cryptocurrency exchanges, the crypto-asset may go through many parties afterwards. Blockseer Petra isn’t solving this one yet but intends to.
Besides knowing the counterparties, another issue is understanding which organization is mining the blocks for cryptocurrency transactions.
“The crypto asset industry is often associated with high environmental impacts, especially when it comes to energy consumption. Additionally, the concept of unknown participants operating blocks is outside the risk appetite of many institutions,” said Maxime De Guillebon, CEO of Zodia Custody.
“Zodia Custody, an industry first with DMG’s Petra platform, is able to address these concerns and provide our customers with the ability to route transfers to ‘green’ mining pools that are compliant with OFAC. Petra will also reassure our institutional clients that their crypto transfers are being handled by known and sanctioned complainants. This represents a major step towards the institutional adoption of crypto assets.
We asked who classifies mining pools as green and based on what criteria, but did not receive an answer in time for publication.
DMG is a publicly traded Canadian blockchain company that provides hosting facilities for cryptocurrency miners and compliance solutions such as Blockseer.
In July, Zodia received regulatory approval from the UK’s FCA. And last month, he signed a custody agreement with UK-based company Pure Digital, which plans to launch a crypto trading solution targeting banks. In 2020, Standard Chartered invested in Swiss custody technology company Metaco, which also counts Northern Trust, BBVA and DBS Bank among its clients.
Standard Chartered is one of many banks launching digital asset custody solutions. Others include BNY Mellon which has partnered with custody technology company Fireblocks, and Nomura has joint venture Komainu, which today announced a deal with Japanese firm Crypto Garage.