BitMEX Partners with Zodia Custody to Offer Off-Exchange Collateral Solutions
Through a new collaboration with Zodia Custody, BitMEX now offers institutional clients the ability to trade crypto derivatives using collateral stored in segregated custody without exchange deposits.
The cryptocurrency derivatives exchange BitMEX has announced it has secured a strategic custody partnership designed to facilitate asset segregation and enable trading operations using assets held off-exchange.
On Tuesday, the platform revealed its collaboration with Zodia Custody, which will provide traders the opportunity to engage in derivatives trading while maintaining their collateral within segregated custody arrangements. Access to this integration is now available through Interchange, the off-venue settlement platform operated by Zodia Custody.
In a conversation with Cointelegraph, Stephan Lutz, who serves as CEO of BitMEX, explained that this strategic decision stems from critical insights gained from previous industry catastrophes, such as the downfall of FTX and the massive $1.4 billion security breach at Bybit, both of which highlighted significant vulnerabilities associated with commingled or compromised funds held on exchanges.
Cases like the FTX collapse and the Bybit hack are examples of how custody failures or security threats can put client funds at risk.
Stephan Lutz, BitMEX CEO
Trading without prefunding the exchange
Through this new integration, professional and institutional clients of BitMEX gain the capability to execute derivatives trades without the requirement to move their assets directly onto the exchange platform. The collateral instead stays securely within Zodia's segregated vault infrastructure and gets mirrored for the purpose of trade execution.
The arrangement enables market participants to retain direct control over their holdings while simultaneously gaining full access to BitMEX's suite of derivatives products, which encompasses perpetual swaps and futures contracts. The system additionally accommodates cross-collateral functionality across multiple digital assets including Bitcoin (BTC), Ether (ETH), Tether USDt (USDT) and USDC (USDC).
The configuration aims to enhance capital efficiency for market participants by eliminating the requirement to transfer assets back and forth between custody solutions and exchange wallets. Furthermore, it minimizes operational risks associated with pre-funding processes, which represent standard practice in conventional cryptocurrency trading frameworks.
Custody is a core part of traditional finance markets
Zodia Custody, which first entered the market in 2021 with backing from Standard Chartered, operates as an institutional-grade digital asset custody service provider with a global footprint. The company obtained Markets in Crypto-Assets Regulation (MiCA) authorization in Luxembourg during the final months of 2025, providing the foundation for regulated service offerings throughout the European Union.
The CEO of BitMEX emphasized that custody solutions have historically represented a fundamental component of traditional financial infrastructure, and their importance has been magnified in the aftermath of catastrophic events such as the FTX implosion and security compromises like the breach experienced by Bybit.
Custody is a core part of traditional finance markets, and recent cases like FTX and Bybit are clear examples of why it's even more important in crypto. As the industry matures, institutions are trading digital assets like any other asset — and should have access to the same services as they do in traditional markets.
Stephan Lutz, BitMEX CEO