Cryptocurrency custody firm Knox is joining forces with Tetra Trust Company, a qualified custodian in Canada.
The arrangement is about bringing together Tetra’s regulated status with certain areas of Knox’s crypto custody expertise, such as its insurance cover – and is not an acquisition in the traditional sense, according to Knox CEO Alex Daskalov.
“While Tetra Trust is acquiring the many physical elements of our custodial stack to run under the Tetra Trust roof, this is not an acquisition of Knox itself, which will remain independent and focused on advancing institutional-grade custodial technology and insurance coverage,” Daskalov said via email.
Crypto custody is a hot area with much jostling for position, including strategic partnerships and acquisitions, some very large funding rounds and varying degrees of institutional-friendly regulation and licensing.
Read more: In Rare Deal, Crypto Custodian Wins Insurance on Full Value of Client Assets
Canada is an interesting case, since it’s one of the leading jurisdictions when it comes to physically-settled crypto products, but has lagged in terms of the availability of domestic qualified custody options, Daskalov pointed out.
“Knox got some comprehensive insurance policies that hadn’t been seen elsewhere, but the qualified custody bit eluded us and it’s a fairly gargantuan task to get that,” Daskalov said. “So, from our perspective, it was ‘let’s focus on technology’ rather than acquiring a regulated designation, and so we are now joining forces and setting up an insured qualified custodian.”