Hong Kong's Amber Group Picks BitGo Trust in Quest for Institutional Investors

Nov 10, 2020 at 2:00 a.m. UTCUpdated Nov 10, 2020 at 8:16 a.m. UTC.Crypto market maker Amber Group will service its clientele of institutional traders with the help of BitGo Trust, the custodial arm of the Palo Alto-based digital asset financial services firm.

BitGo's status as a qualified custodian should draw more high-net-worth investors to Amber from places like Hong Kong, Taiwan and Seoul, the companies said.

The Hong Kong-based market maker, which has an average daily trading volume between $100 million and $200 million, is building on its existing business relationship with BitGo.

BitGo Trust clients include Pantera, Bitstamp, Nexo, CoinJar and others.

Asked for his reasoning on the broadening of the firm's custody partnerships, Amber Group CEO Michael Wu said via email that it came down to the custodian's "Track record, shared insurance scheme and integration with [the BitGo] lending desk."

BitGo's Carmi said the inventory immediately needed for market making and high-frequency trading can be held in hot wallets, or those connected to the internet.

Amber has also been getting a taste of BitGo's wrapped bitcoin, a tokenized version of bitcoin primed for easy usage on Ethereum's various decentralized finance apps.

BitGo's Carmi said WBTC naturally flows into the institutional custody business as savvy investors hunt for yield.

"We are the sole custodians and the only counterparty that can mint WBTC," he said, "And BitGo Trust is the custodian of the BTC that's being held for minting."

Wu could not comment on the volume of WBTC Amber is trading.